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

On May 29, 2020, the Province of Ontario enacted Ontario Regulation 228/20, Infectious Disease Emergency Leave (the “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, non-union employees with reduced or eliminated work hours due to the COVID-19 pandemic are considered not to be on layoff under the ESA, but instead continue on deemed IDEL.

Deemed IDEL

By way of background, the IDEL Regulation created a new category of unpaid infectious disease emergency leave, which applies where 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, the recently announced IDEL Regulation amendments extended the COVID-19 Period until September 25, 2021. As such, non-union 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 non-union 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 September 25, 2021 (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 September 25, 2021, 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 September 25, 2021, 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 September 25, 2021 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.