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Ontario Government Extends Layoff Timelines for Employers
08 Sep 2020
By Jennifer Zeilikman
Ontario Government Extends Layoff Timelines for Employers

When the Ontario government had declared a state of emergency due to COVID-19 back in March 2020, regulations in the Employment Standards Act, 2000 (“ESA”) were subsequently added to prevent layoffs, wage reductions or pay cuts and reduced working hours that were due to the coronavirus to be subject to constructive dismissal claims by employees under statute.  These employees were considered to be on a job-protected leave in the non-unionized context. 

These changes in the law were confusing to employment lawyers because, among other things, we were unsure as to whether or not these changes also applied to the common law.  If these changes did not apply to the common law then employees would have still had the ability to sue civilly in order to claim constructive dismissal.  The common law could allow employees to bypass the ESA regulation with the help of an employment lawyer.  The consensus seemed to be (at least amongst plaintiff-side counsel) that these statutory developments did not apply to the common law.  This issue is unresolved as to what the state of the law in that regard is until it is resolved through the courts. 

In spite of this uncertainty, the Ontario government was slated to lift the above-mentioned temporary developments. Specifically, it was planned by the Ontario government that following September 4, 2020, and pursuant to the Reopening Ontario (A Flexible Response to COVID-19) Act, the normal rules concerning layoffs would apply under the ESA for the purposes of the statute. Employers were told to ensure to recall their employees and reinstate their employees to their pre-pandemic status quo in order to prevent a claim for constructive dismissal under statute. The return to work of such employees or the triggering of statutory constructive dismissal claims was imminent.   

However, the Ontario government in an effort to protect jobs and businesses, suddenly extended the suspension of the normal rules concerning constructive dismissal in the above-mentioned context until January 2, 2021. This means that an employee still does not have a recourse under the ESA to claim constructive dismissal if he or she has experienced suspension in work, wage reductions or pay cuts and / or  reduced working hours if those things were put in place by their employer due to the coronavirus. At this point, this specific statutory right remains to be on hold until January 2021 instead of September 2020.  To repeat, an employee may still have a right to seek redress through the courts and both employers and employees ought to remain aware of that. 

The government seems to be strongly suggesting by their policies that the financial burden of COVID-19 should be on the backs of employees.  For instance, an employee could now be subject to a significant wage reduction or layoff for a period of nearly a year if they are to wait until January 2021 for a recourse under the ESA. However, this also means that an employer will have an obligation to reinstate employees to their pre-COVID-19 terms of employment.   

Over the course of the last few months we have been inundated with requests for consultations with respect to the above issues. If the above state of affairs relates to you somehow and you need to make a decision regarding your future employment, or the future employment of your employees, you should seek legal advice. Any such legal advice does not have to be with our firm but you should make sure to obtain it to better protect your rights whether you are an employer or an employee. You should ensure that when seeking to obtain legal advice not to wait until the last minute. Furthermore, any such advice should come from a qualified and experienced Ontario employment lawyer who remains abreast of these and other important developments in workplace law in Ontario.

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.