Ontario Again Extends Temporary Relief from the ESA’s Termination and Severance Provisions

As we previously highlighted, on May 29, 2020, the Province of Ontario enacted Ontario Regulation 228/20, Infectious Disease Emergency Leave (IDEL Regulation), under the Employment Standards Act, 2000 (ESA). The IDEL Regulation retroactively reclassified any temporary layoff that occurred during the COVID-19 Period as an infectious disease emergency leave (IDEL). On June 4, 2021, the Ontario government amended the IDEL Regulation to define the “COVID-19 Period” as the period between March 1, 2020, and September 25, 2021. As a result of this extension, nonunion employees with reduced or eliminated work hours due to the COVID-19 pandemic were considered not to be on layoff under the ESA, but instead continue on deemed IDEL.

Now, as the COVID-19 pandemic lingers and continues to affect employers and employees, especially in light of the delta variant, on September 16, 2021, the Ontario government extended the temporary relief measures from the termination and severance provisions of the ESA until January 1, 2022. As such, the temporary measures found in the IDEL Regulation have been amended to define the “COVID-19 Period” as the period beginning on March 1, 2020 and ending on January 1, 2022.

We summarized the Ontario temporary relief measures in our prior blog post and have highlighted and updated our analysis here.

Deemed IDEL

The IDEL Regulation created a new category of unpaid infectious disease emergency leave that applies when an “employee’s hours of work are temporarily reduced or eliminated by the employer for reasons related to” the COVID-19 pandemic. The IDEL Regulation provides that employees are on this new category of IDEL if they do not perform their duties because their work hours have been temporarily reduced or eliminated due to the COVID-19 pandemic.

Employees may be on unpaid IDEL during the COVID-19 Period. Initially, the IDEL Regulation stated that the COVID-19 Period began on March 1, 2020, and was expected to continue for six weeks after the Ontario state of emergency ended. Although the COVID-19 Period was anticipated to end on July 3, 2021, and was later extended until September 25, 2021, the recently announced IDEL Regulation amendments now extend the COVID-19 Period until January 1, 2022. As such, nonunion employees whose work hours remain temporarily reduced or eliminated due to the COVID-19 pandemic will continue on deemed IDEL.

Employees Not Considered to Be on Layoff

The IDEL Regulation provides relief to nonunion employees whose work hours have been reduced or eliminated or whose wages have been reduced for reasons related to the COVID-19 pandemic during the COVID-19 Period. For such employees, the IDEL Regulation provides that the ESA’s typical termination and severance rules regarding layoffs do not apply, and employees are considered not to be on layoff for the purpose of those sections of the statute. Put differently, employees who have been laid off due to the COVID-19 pandemic are deemed not to have been laid off, but instead are considered to be on a leave of absence. These provisions also will continue to apply until January 1, 2022, (i.e., throughout the duration of the extended COVID-19 Period).

Certain Employers’ Actions Not Considered a Constructive Dismissal

Finally, the IDEL Regulation provides that if employers (i) temporarily reduce or eliminate employees’ work hours or (ii) temporarily reduce employees’ wages during the COVID-19 Period in response to the COVID-19 pandemic, then such actions are not a constructive dismissal. These provisions will continue to apply during the newly extended COVID-19 Period, until January 1, 2022, as well.

Takeaways

Because the IDEL Regulation only amends ESA rules regarding layoffs and constructive dismissal and the interaction between the IDEL Regulation and the common law is complex, employers should seek legal counsel prior to reducing employees’ hours or wages. In addition, when the extended COVID-19 Period ends on January 1, 2022, the ESA’s standard rules concerning layoffs and constructive dismissal again will apply. As such, employers that may not be resuming their operations in full by January 1, 2022, must consider how they will address employment issues moving forward.

We continue to monitor how the COVID-19 pandemic affects employers and employees in jurisdictions outside the United States.