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    • Tag: Employment termination

    Temporary Layoffs During COVID-19 – “COVID-19 period” extended until January 2, 2021

    On May 29, 2020, Ontario passed Regulation 228/20 under the Employment Standards Act (“ESA”).  As a result of this new regulation, non-unionized workers who had their hours reduced or eliminated due to COVID-19 are deemed retroactively to be on Infectious Disease Emergency Leave, which is an unpaid, job-protected leave under the ESA.  The regulation applies retroactively from March 1, 2020, and initially was set to expire on September 4, 2020, six (6) weeks after the state of emergency ended.   This period of time is referred to in the Regulation as the “COVID-19 period”.  Our initial blog, which explains the impact of the Regulation on employer and employee rights, can be found here.

    On September 3, 2020, the government of Ontario announced that the COVID-19 period would be extended until January 2, 2021.

     Impact of the Regulation and the Extension of the COVID-19 Period

    As a result of the Regulation and the government’s latest announcement, non-unionized employees who have been temporarily laid off between March 1, 2020, and January 2, 2021, for reasons related to COVID-19 would be deemed to be on Infectious Disease Emergency Leave.

    Under the ESA, an employee who has been laid off for more than 13 weeks in any period of 20 consecutive weeks (or for at least 35 weeks in any period of 52 weeks, if certain other conditions are met) will be deemed to have been dismissed from their employment.  This constructive dismissal would then entitle the employee to statutory termination pay, as well as severance pay (if certain other criteria are met).

    The extension of the COVID-19 period to January 2, 2021, means that there will be no deemed terminations arising from temporary layoffs until after January 2, 2021, provided that the reason for the layoff was related to COVID-19.  As noted by the government of Ontario, the Regulation can relieve employers from substantial payments to their employees, which can make a difference in times where the business is already struggling to survive the economic effects of the pandemic.

    Does the Regulation Alter the Common Law related to Temporary Layoffs and Constructive Dismissal?

    As set out above, an employer has a right to temporarily lay off employees under the ESA.  However, it is well-established law that an employer does not have a common law right to temporarily lay off an employee, even if the employer complies with the provisions of the ESA.  This would result in a constructive dismissal at common law.

    The common-law prohibition of temporary layoffs in Ontario can be altered if there is an express term in an employment contract that permits an employer to temporarily layoff employees in accordance with the ESA.

    In order for the common law to be altered by a statute, there would need to be express language in the statute to that effect, which is not the case here.  In fact, the ESA expressly states that “no civil remedy of an employee against his or her employer is affected by this Act” and the Regulation does not contain any language which would modify this section of the ESA.

    In the event that the common law provides a greater right or benefit to an employee than their ESA entitlements, the common law will prevail.  However, an employer can limit an employee’s entitlements by contract, as long as the contract ensures that the employee will not receive less than their minimum ESA entitlements.

    COVID-19 has resulted in unique and unprecedented circumstances for both employers and employees and how the courts will interpret and apply Regulation 228/20 (and the most recent amendment to the COVID-19 period) remains to be seen.  The courts may still find that employees have been constructively dismissed at common law, but may award less generous severance package to employees.  The specific facts which resulted in the temporary layoff or reduction in hours or wages will also be relevant.

    If the common law remains unaltered, many temporary layoffs due to COVID-19 would be unlawful and may result in the employee’s entitlement to a common law notice period and significant severance payouts for employers.

    Key Takeaway for Employees:

    Employees who have been temporarily laid off during the COVID-19 period and were waiting until after September 4, 2020, to claim statutory termination pay and severance pay from their employer arising from a deemed termination of their employment will now have to wait until after January 2, 2021.  However, assuming that there was no lay-off provision in their employment contract, employees in this situation should consider taking the position that the lay-off was in contravention of the common law, their employment was constructively dismissed, and that they are therefore entitled to a common law notice period.

    Key Takeaway for Employers:

    Employers will not be obligated to pay out hefty sums for severance pay and termination pay under the ESA until after January 2, 2021, with respect to employees who have been temporarily laid off due to COVID-19, and may therefore wish to consider extending temporary layoffs until January 2, 2021.  However, the Regulation does not bar employees from pursuing an action in common law and it is unclear at this stage how courts will interpret and apply this Regulation.

    If you have more questions about how this new Regulation will affect you as either an employer or employee, contact employment lawyer Marty Rabinovitch at 416-446-5826 or at marty.rabinovitch@devrylaw.ca to discuss your rights and options.

     

    “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.”

    By Fauzan SiddiquiBlog, COVID-19, Employment Law

    Can Employers Terminate Employees While They are on Leave?

    This blog post was written by employment lawyer, Carrie Kennedy in response to the question: “Can employers terminate the employment of an employee while that employee is on pregnancy leave, parental leave, or any other type of leave?” Of course they can. However, doing so may be a costly decision.

    The Employment Standards Act, 2000 (the “ESA”), similar to the Canada Labour Code, provides that “upon the conclusion of an employee’s leave under this Part, the employer shall reinstate the employee to the position the employee most recently held with the employer, if it still exists, or to a comparable position, if it does not”. Despite this obligation on an employer to reinstate an employee when a period of leave ends, an employer may terminate that employee’s employment for a number of reasons including: a) the position no longer exists and there are no comparable positions to offer to the employee; b) the employer terminates the employment in compliance with the termination and severance requirements in the applicable legislation; or c) the employer has grounds to dismiss the employee that are completely unrelated to the fact that the employee is on leave.

    Both the Canada Labour Code and the ESA both have case law decided under them that clearly state that, while the legislation is designed to protect employees on leave, they are not designed to provide greater rights to employees who go on leave than to other employees. Although an employer may terminate the employment of an employee on leave, employers must be sure not to treat employees who are on leave more poorly than those employees who are not on leave. Often, an employee on leave will believe their rights or protections have been violated if dismissed while on leave and they will seek further compensation from the employer. The termination, therefore, even if part of a corporate reorganization, might come at quite a cost to the employer.

    In the recent case of Moday v. Bell Mobility Inc. 2013 CarswellNat 393, Moday, an 11 year employee of Bell Mobility, received a termination letter from Bell Mobility while she was on maternity leave. Bell Mobility argued that, due to downsizing, it had eliminated Moday’s job and all comparable jobs, so there were no comparable positions to which she could return. In this case, Bell Mobility had eliminated about 220 jobs in its reorganization. Although Bell Mobility offered Moday a severance and termination package that exceeded the requirements of the Canada Labour Code, she brought an action against Bell Mobility for wrongful dismissal. The arbitrator dismissed Moday’s complaint. It found that an employer may dismiss someone on leave when the employee’s job is eliminated and there are no comparable jobs to be offered, the right to be reinstated does not trump an employer’s right to reorganize, and being on leave does not put an employee in a superior position to other employees who also lose their jobs during a corporate reorganization.


    The downside to an employee who is terminated while on leave is obvious: the employee loses his or her job. The downside to an employer who terminates the employment of an employee while he or she is on leave is that it might be a very costly decision. The employer will be required to pay, at a minimum, the amounts set out in the termination and severance provisions of the applicable legislation. It will also likely have to pay legal fees if that employee brings a civil action against it for wrongful termination or makes a complaint against it before the Human Rights Tribunal. It is likely that an employer will either have to voluntarily pay an employee an amount that exceeds the minimum legislated standards in order to avoid litigation or it will be ordered to do so if unsuccessful in litigation. What this means for an employer is that, while it may technically act within the bounds of the law in terminating the employment of an employee on leave in certain circumstances, it may cost much more to terminate that employment compared to terminating the employment of an employee who is not on leave.

    For more information on Canada Labour Code, Employment Standards Act and Notice and Termination of Employees for Employers or if you need an employment lawyer, contact Carrie Kennedy or one of the employment law lawyers of Devry Smith Frank LLP, listed on our website by clicking on their name.

    By Fauzan SiddiquiBlog, Employment Law