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Important changes in Ontario concerning wage cuts and layoffs related to COVID-19
02 Jun 2020
By Arthur Zeilikman
Important changes in Ontario concerning wage cuts and layoffs related to COVID-19

On May 28, 2020, the Ontario government created Ontario Regulation 228/20 (“Regulation”) in the Employment Standards Act, 2000, in an effort to address and alleviate some of the financial hardship suffered by local businesses due to the COVID-19 pandemic. Among other things, the aforementioned Regulation has brought about to two key developments in the ever-shifting landscape of employment law in Ontario.

Firstly, the Regulation sets out that a temporary decrease in work hours or pay for reasons related to COVID-19 is not constructive dismissal. The Regulation contemplates the relevant period in relation to any such decreases to be March 1, 2020, and lasting up to the date that is six weeks after the day the Ontario emergency state ends. 

A second and similar change applies to the law of layoff. Specifically, the Regulation sets out that any temporary layoffs that arose for reasons related to COVID-19 have now been converted to leaves of absence. Much like with reduction in work hours and pay, changes concerning the laws of layoff relate to the period commencing on March 1, 2020, and ending on the date that is six weeks after the day the Ontario emergency state ends.

It is unclear whether these important changes in the law apply to the Employment Standards Act, 2000, only or the employee’s rights at common law also, which are often far more robust and for which an employee may bring a civil action. With the exception of some circumstances such as the filing of the claims before May 29, 2020, or the expiry of the layoff period by the aforementioned date, proceedings filed with the Ministry of Labour in relation to the aforementioned issues are deemed to have not been filed.

We estimate that these serious changes in the law are likely to result in uncertainty on numerous fronts for both employers and employees and it remains to be seen how these changes are going to be interpreted by both the Ministry of Labour and the courts. 

The above article is for general information purposes only, does not constitute legal advice or create a solicitor-client relationship. Because each case is unique and factually driven, if you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.