Ontario Announces Further Extension of Temporary Relief from ESA Termination and Severance Provisions
Date: June 7, 2021
Effective June 4, 2021, the Ontario government has extended the temporary relief measures from the termination and severance provisions of the Employment Standards Act, 2000 (ESA) until September 25, 2021. The temporary measures are found in Ontario Regulation 228/20, Infectious Disease Emergency Leave (IDEL Regulation), which has been amended to define the “COVID-19 Period” as that period beginning on March 1, 2020 and ending on September 25, 2021.
As a result of this extension, the status quo will remain in effect until at least September 25, 2021 – non-union employees with reduced or eliminated hours of work because of COVID-19 are deemed not to be on layoff under the ESA but continue on deemed IDEL, and certain actions continue to be deemed not to be a constructive dismissal under the ESA.
We provided a detailed review of these measures in our May 31, 2020 FTR Now, Ontario Government Provides Temporary Relief from ESA Termination and Severance Provisions in Response to COVID-19, and will outline the key highlights below.
We remind readers at the outset that these temporary measures only apply to non-unionized employees, and not to employees represented by unions.
The first relief measure in the IDEL Regulation is the creation of 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” COVID-19. The IDEL Regulation then deems an employee to be on this new category of IDEL where they do not perform their duties because their hours of work have been temporarily reduced or eliminated because of COVID-19. The deemed IDEL assists employers whose businesses remain closed or are operating at less than full capacity due to the ongoing effects of the economic downturn caused by the pandemic.
Employees are deemed to be on unpaid IDEL during the “COVID-19 Period”. In the original version of the IDEL Regulation, the COVID-19 Period began on March 1, 2020 and was to continue until 6 weeks after the state of emergency in Ontario was ended. The original COVID-19 Period would have come to an end on July 3, 2021. However, with the recently announced amendments to the IDEL Regulation, the COVID-19 Period will now continue until September 25, 2021. Therefore non-union employees whose hours of work remain temporarily reduced or eliminated due to COVID-19 will continue on deemed IDEL.
Employees Deemed Not to be on Layoff
The second key relief measure in the IDEL Regulation relates to non-union employees whose hours of work have been reduced or eliminated, or whose wages have been reduced, for reasons related to COVID-19 during the COVID-19 Period. For these employees, the IDEL Regulation provides that the ESA’s usual termination and severance rules related to layoffs do not apply, and the employees are effectively deemed not to be on layoff for the purpose of those sections of the statute. These provisions will also continue to apply during the extended COVID-19 Period until September 25, 2021.
Deeming Certain Actions Not to be a Constructive Dismissal
The final relief measure in the IDEL Regulation is that it deems certain actions of an employer made in response to COVID-19 not to be a constructive dismissal if they occur during the COVID-19 Period and are for reasons related to COVID-19:
- a temporary reduction or elimination of an employee’s hours of work, or
- a temporary reduction in an employee’s wages.
These provisions will also continue to apply during the now-extended COVID-19 Period until September 25, 2021.
This FTR Now only focuses on the highlights of the temporary relief measures implemented by the IDEL Regulation that will now continue until September 25, 2021. There are exceptions to these rules, which we reviewed in greater detail in our May 31, 2020 publication. Similarly, there were detailed rules related to benefits continuation and other matters for employees on deemed IDEL. Please refer to that earlier publication for a more complete discussion of the IDEL Regulation.
The IDEL Regulation only amends the ESA rules related to layoffs and constructive dismissal, and the interaction between the IDEL Regulation and the common law is complex. Thus, we continue to encourage employers to seek legal advice before undertaking reductions in hours or wages in relation to your employees.
Once the extended COVID-19 Period comes to an end on September 25, 2021, the usual ESA rules related to layoffs and constructive dismissal will be re-engaged. Employers who are not able to fully resume operations by that time will therefore need to carefully consider how they will address their ongoing employment issues.
Employers should also note that deemed IDEL, as created under the IDEL Regulation and summarized above, is a form of “unpaid” IDEL and is therefore distinct from the recently established “paid” IDEL entitlment. For details of paid IDEL, please refer to our May 6, 2021 FTR Now, Ontario Enacts Legislation to Provide Paid Leave for Reasons Related to COVID-19.
If you have any questions related to the IDEL Regulation and its impact on your organization, please contact your regular Hicks Morley lawyer.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©