The Ontario government is amending the Employment Standards Act to make temporary layoffs which occurred after March 1, 2020 part of new emergency leave provisions put in place in the wake of the coronavirus pandemic.
Normally, employees are legally considered terminated after 13 weeks of a temporarily lay off and are therefore entitled to severance pay. With so many employers forced to put workers on some type of furlough arrangement, the concern is that many businesses wouldn’t survive the need to suddenly pay severance to the parts of their workforce they can’t afford to pay during the pandemic.
In effect, the change retroactively makes layoffs and reductions in hours that occurred during the pandemic period part of the recently implemented infectious disease emergency leave, says Richelle Pollard, a partner in employment and labour law at KPMG Law LLP. “Another very important thing it does, as well, is that under the regulation it will declare a reduction in hours or a reduction in wages not to be a constructive dismissal of employment.”
Notably, this doesn’t change anything about previously established relationships with unionized employees that are governed by a collective agreements, she adds.
“Some other provinces just simply extended the temporary layoff period,” she says, noting British Columbia raised its period from 13 to 16 weeks. “And the objective of that at the time was to try to align with the emergency benefit period.”
It’s a bit premature to say how employers will react, says Pollard, or the shifts they’ll make in light of the amendment. “Some employers may have been preparing to have terminations because they were creeping up to the deadline of the temporary layoff period. So now this could have an impact on that.”
She adds that if an employer terminated employees prior to the government’s announcement of the regulation change — May 29 — it won’t be impacted, unless there was an agreement between the employer and employee.