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Taking Care of Business Law

Aug 13, 2020

Declared Emergency in Ontario to Cease September 4th: Implications for Employees and Employers

On July 24, 2020, the Re-opening Ontario (A Flexible Response to COVID-19) Act, 2020 (the “Re-opening Act”) came into force which officially ended the Covid-19 declared emergency in Ontario. The end of the declared emergency triggers a number of transition provisions in various acts which will result in a number of Covid-related emergency measures ceasing in the near future.

For both employers and employees, there are a number of implications of the Re-opening Act coming into force, which stem from measures previously introduced under the Employment Standards Act (the “ESA”) which we have written about previously . To recap, among other measures, the Ontario government had introduced 2 new types of leave, being: (a) Declared Emergency Leave; and (b) Infectious Disease Emergency Leave, and proclaimed OReg 228/20 under the ESA introducing changes which allowed employers to indefinitely reduce pay and/or reduce or eliminate hours of work during the “Covid-19 Period” without triggering a temporary layoff (which would otherwise be time-limited) or constructive dismissal.

As a result of the termination of the declared emergency by the Re-opening Act, these measures will cease to apply as of September 4, 2020 which means that employers and employees must be aware of the following:

 

  1. unless the employer has a specific right to layoff the employee under the employment agreement, a reduction or elimination in wages and/or hours that is currently in place and which continues after September 4, 2020, or that is implemented anew after that time, may form the basis of a constructive dismissal for the purposes of the ESA;

     

  2. if an employee has had his or her wages and/or hours reduced or eliminated prior to September 4, 2020 and it continues after that time, or if such measures are implemented anew after that time, then the normal temporary layoff rules and timeframes will apply. An employer will only be entitled to layoff the employee for a period of up to 13 weeks in a 20-week period, or 35 weeks in a 52-week period. The time periods will start accumulating from September 4th (but will not include any time during the “Covid-19 Period”) and the employee must be recalled before the end of the period to avoid triggering termination or severance obligations; and

     

  3. employees who were on Declared Emergency Leave will no longer be eligible for that particular leave. Declared Emergency Leave applied to employees who could not perform his or her duties because of the declared emergency and, among other things, he or she had to provide care or assistance to certain individuals including a spouse, a child, or a parent. That being said, many employees may remain eligible for Infectious Disease Emergency Leave under the ESA which will remain in place and has qualification criteria similar to Declared Emergency Leave.

 

As a result of the changes triggered by the Re-opening Act, employers should consult with legal counsel prior to reducing or eliminating an employee’s hours of work or pay in order to understand their potential exposure for termination and severance pay, whether under the ESA or at common law. Likewise, where such measures are currently in place and the employee does not qualify for any leave under the ESA, employers will need to consider whether to recall employees whose hours have been reduced or entering into a mutual agreement with the employee to permit the layoff if it is not otherwise permitted in the employment agreement. Conversely, if an employee has his or her hours of work and/or pay reduced, he or she should consult with legal counsel to understand their potential entitlements under the ESA and at common law.

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