The situation regarding COVID-19 is changing rapidly, this post is current as of June 1, 2020.
On May 29, 2020, the Ontario Government passed a new regulation, O. Reg 228/20, that deems non-unionized employees whose hours of work are temporarily reduced or eliminated by the employer for reasons related to COVID-19 to be on infectious disease emergency leave rather than having been constructively terminated. Reductions in hours and wages for reasons related to COVID-19 do not constitute a layoff or constructive dismissal. This brings more certainty to employers that made the difficult decision to reduce employees’ hours or wages in response to COVID-19.
The regulation defines the “COVID-19 Period” as the period beginning on March 1, 2020 and ending on the date that is six weeks after the emergency order declared in respect of COVID-19 is terminated or disallowed. The regulation creates special provisions that modify the Employment Standards Act, 2000 (“ESA”) during the COVID-19 Period.
The ESA was amended in mid-March 2020 to create the infectious disease emergency leave to permit employees to take leaves of absence without pay for certain reasons related to COVID-19. The regulation passed on May 29, 2020 creates a new reason for taking the leave, which is a temporary reduction or elimination of an employee’s hours of work related to COVID-19. The regulation then provides that an employee who is not performing the duties of his or her position for that reason to be deemed to be on infectious disease emergency leave. Unlike other reasons for taking the leave, there is no requirement to give notice.
Certain employees are not deemed to be on leave. This includes employees that were given notice of termination after March 1, 2020 and employees who resigned in response to a constructive dismissal or were treated as having been dismissed as result of a temporary layoff in excess of the statutory maximums before May 29, 2020. However, where an employee was given notice of termination, the employer and employee can agree to withdraw the notice of termination permitting the employer to be on infectious disease emergency leave.
No layoff and no constructive dismissal
An employee whose hours of work are temporarily reduced or eliminated by the employer, or whose wages are temporarily reduced by the employer due to COVID-19 during the COVID-19 Period is exempt from certain provisions of the ESA. In the absence of the exemption, a temporary layoff would be treated as a termination or severance of employment once the statutory maximums of 13 or 35 weeks had been reached or be treated as a constructive dismissal if there was no contractual right to place employees on a temporary layoff. This provision does not apply where an employee was terminated or severed before May 29, 2020 on the basis of a temporary layoff in excess of the statutory maximums.
During the COVID-19 Period, it is not constructive dismissal for an employer to temporarily reduce or eliminate an employee’s hours of work or to temporarily reduce an employee’s wages, both for reasons related to the COVID-19. However, if an employee resigned in response to a constructive dismissal before May 29, 2020, this section of the regulation does not apply.