On December 17, 2020, the provincial government enacted legislation extending the “covid-19 period” set out in O. Reg. 228/20: Infectious Disease Emergency Leave (the “IDEL Regulation”) to July 3, 2021. The covid-19 period was initially set to end in September but was later extended to January 2, 2021. With this latest extension of the covid-19 period to July 3, 2021, provincially regulated employers[1] can continue to unilaterally place their employees on unpaid leave (or reduce their hours of work or pay), so long as it is for reasons related to covid-19, without having to provide them with their minimum termination and severance entitlements pursuant to the Employment Standards Act, 2000 (the “ESA”) until at least July 4, 2021.
Back in May of this year, the provincial government enacted the IDEL Regulation mainly in an attempt to shield businesses from the potential legal ramifications of temporarily reducing or, in some cases, eliminating an employee’s hours of work and/or pay, or of placing employees on temporary layoffs for longer periods than permitted by the ESA, for reasons related to covid-19.
Before the IDEL Regulation was enacted, a temporary layoff that extended beyond the allowable timeframes set out in the ESA (up to 13 weeks or, in some circumstances, up to 35 weeks in a specified period) was deemed to be a termination of employment. As such, employers who were unable to recall employees back to work before the expiry of the ESA temporary layoff period would ordinarily have to provide those employees with their ESA notice and severance entitlements at that time.[2]
However, per the IDEL Regulation, employees who are temporarily laid off or whose hours of work or pay are temporarily reduced or eliminated during the “covid-19 period” for reasons related to covid-19 are instead deemed to be on Infectious Disease Emergency Leave and not on a temporary layoff for ESA purposes. Moreover, while unilateral reductions to an employee’s hours of work and/or pay could, under ordinary circumstances, amount to constructive dismissal, per the IDEL Regulation, such changes will not be considered constructive dismissal (at least for ESA purposes) if made during the “covid-19 period” for reasons related to covid-19.
Once the covid-19 period ends, which is now set to occur on July 3, 2021, we expect that the ordinary ESA rules with respect to temporary layoffs and termination of employment will apply to employees, absent further legislative changes.
Finally, although the IDEL Regulation has temporarily suspended employers’ obligations to provide employees with their ESA termination and severance entitlements in the circumstances set out above, unilaterally placing employees on an unpaid leave or reducing their hours of work and/or pay still has other potential legal implications for both employers and employees, as such conduct may amount to a breach of contract and/or a constructive dismissal at common law. For this reason, we encourage any employers considering implementing such changes and any employees who are impacted by any such changes to seek legal advice with respect to their situation.
Disclaimer: As always, this post does not constitute legal advice and we would encourage you to seek professional legal advice from one of our knowledgeable lawyers before making any decisions with respect to your own situation.
[1] Employers and employees in federally regulated industries (e.g. banks, airlines, telecommunications, radio and television broadcasting, etc.) are governed by different legislation, such as the Canada Labour Code.
[2] Different rules apply to unionized employees.