Layoff Protections for Employers set to Expire September 4th

Written on behalf of Peter McSherry

You may hear soon in the news that Ontario has ended the period of the emergency. This is true, with caveats. The province has now proposed a law that will end the state of emergency retroactively as of July 24. This, however, does not end the impact of the emergency as many of the orders made during the emergency period will continue for another 30 days. It is also possible that this time period will be extended further.

Employment Standards Act Protections

The ESA was amended a few times during the emergency period. One of the more significant revisions afforded workers with job security and protection from termination or other work-related issues because of the COVID-19 virus.

The basic impact of this law, called the Infectious Disease Emergency Leave, gave workers job security by preventing employers from terminating employees who could not work due to various virus-related issues.

The new law will have no impact on these protections. This is the good news.

Confusing Rules on Temporary Lay-off

The ESA has rules allowing employers to temporarily lay-off employees due to a reduction in work, or other business reasons. The basic concept is that a company is allowed to place an employee on lay-off for up to 13 weeks (35 weeks where benefits are continued) and then rehire the employee at the end or before the end of the lay-off period. Where the lay-off is longer, then the employer must pay the statutory severance and termination pay, which can be the equivalent to as much as 34 weeks’ notice.

In late May, the province changed these rules for COVID-19 related lay-offs or salary reductions that could be treated as a lay-off. The new temporary law stated that any such “lay-off” would not be a lay-off at all and would be deemed to be an Infectious Disease Emergency Leave.

Now the period for this temporary change is set to last until September 4. The lay-off time clock for those still not recalled to work will start September 4. After 13 weeks, then the employer must recall or pay the statutory sums.

If you were laid off during the emergency period, you will not be legally treated as having been laid off, but rather as if you were on the emergency medical leave. If you are still not returned to work as of September 4, you can start counting the lay-off period to get to 13 weeks. If you are recalled within that 13 week period, that is by December 4, then you will have no claim to ESA statutory severance and termination pay.

Changes Apply to Statutory Claims Only

These are the rules only for the statutory sums. Common law claims for termination and severance pay are looked at very differently. An employee can claim any reduction in hours or lay-off to be the same as a termination of employment and sue for wrongful dismissal notice. This of course presumes there is no agreement in place which contracts out of the common-law rules.

Confused Yet?

For an issue that has likely arisen on innumerable times since you started reading this post, the law is regrettably mysterious. Keep in mind that a common-law claim requires that the employee does everything in their power to mitigate their losses. If your employer offers you your job back on the same terms and conditions, there are going to be serious legal issues.

Needless to say, this is not the moment to be acting without solid legal advice. There are also practical considerations to weigh before suing, such as whether the company is likely to survive financially. There is no point in suing if not. Keep in mind that the limitation period to start a claim is 2 years and 1 or 2 years for a human rights complaint, depending on whether you sue in a civil court before a human rights tribunal. There is no need to be hasty.

Get Informed, Stay Current

To say today that the law is dynamic is a gross understatement. It is constantly evolving, especially under the current circumstances. We will update the all news as it develops in this space. Contact the offices of Guelph employment lawyer Peter McSherry to review your rights and protect your interests. Contact us online or by phone at 519-821-5465 to schedule a consultation.