By: Jordon Bond
The COVID-19 pandemic has had a substantial impact on the well-being of countless businesses. As a result, many employers have found themselves in a position where they are forced to layoff their employees. Laws surrounding layoffs in Ontario are governed by both the province of Ontario, known as the statutory regime, and the courts, known as the common law regime.
Layoffs in Ontario Pre-Pandemic
Under the statutory regime, the Employment Standards Act (ESA) provides that a layoff will be considered termination of employment if an employer lays off an employee for more than 13 weeks in any period of 20 consecutive weeks.[1]
Typically, the common law will treat a layoff as termination of employment or constructive dismissal[2]. Even were an employer finds itself in a position where it is required to reduce the number of workers it employs due to economic hardship or lack of work, they are not relieved of their obligation to provide reasonable notice.[3]
As a result, a layoff may trigger certain remedies for employees, including statutory termination and severance payments. For more information on these remedies, refer to our blog “Severance Pay, Common Law Notice, & Reasonable Notice”.
Layoffs in Ontario Post-Pandemic: Regulation 228/20
On May 29, 2020 the Ontario government issued a new regulation in response to the COVID-19 pandemic, Regulation 228/20 (the “Regulation”). The Regulation is in force until July 3, 2021 and deems non-unionized employees who have had their hours temporarily reduced or eliminated for reasons related to COVID-19 to be on infectious disease emergency leave.[4]
Effectively, the Regulation provides that a reduction or elimination of hours will not be considered a layoff under the ESA and as a result, will not trigger an employer’s statutory termination and severance payment obligations.
However, employers must note that some employees may have additional entitlements depending on the terms of their employment agreement or collective bargaining agreements.
Additionally, the Regulation does not state whether employees laid off due to COVID-19 will be considered constructively dismissed under the common law.
Takeaways for Employers
The Regulation provides some relief for employers experiencing hardship during the COVID-19 pandemic as it suspends the ESA rules relating to layoffs. However, it is unclear whether the Regulation will affect the common law regime relating to layoffs. As a result, employers who are able should consult with an employment lawyer to minimize their risk.
Further, the Regulation is only in force until July 3, 2021, after this date the rules pertaining to layoffs under the ESA will resume. Employers should stay up to date on the Regulation to see if the Ontario government will extend its period of enforcement.
Disclaimer: The information provided in this response is for general informational purposes only and is not intended to be legal advice. The content provided does not create a legal client relationship, and nothing in this response should be considered as a substitute for professional legal advice. The information is based on general principles of law and may not reflect the most current legal developments or interpretations in your jurisdiction. Laws and regulations vary by jurisdiction, and the application and impact of laws can vary widely based on the specific facts and circumstances involved. You should consult with a qualified legal professional for advice regarding your specific situation.
[1] Employment Standards Act, 2000, S.O., C. 41 Section 56(5).
[2] CED Employment Law III.5.(d) (Ontario).
[3] Ibid.
[4] ‘Temporary Layoffs’, Ontario.ca, 2021 <https://www.ontario.ca/page/covid-19-coronavirus-and-your-employment-standards-protections#section-3>.