Know your rights under Ontario’s amended layoff regulations

COVID-19 /
Ellen Low
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By LegalMatters Staff • The Ontario government’s temporary change to layoff regulations during the coronavirus pandemic puts employees in a “precarious position,” says Toronto employment lawyer Ellen Low.

And the recently announced amendment is somewhat confusing, even for those who practise employment law, making it essential for workers to seek legal advice when confronted with the issue, says Low, principal of Ellen Low Employment Law.

She explains the changes under the Employment Standards Act, 2000 (ESA) mean non-unionized employees who have had their hours or pay reduced or cut due to COVID-19 are preventing from filing a complaint of constructive dismissal to the Ministry of Labour, and removes the deemed termination timeline for employees on lay-off.

‘Extends the period of uncertainty’

“In my view, this is not good because it extends the period of uncertainty,” Low tells LegalMattersCanada.ca. “When we look at what the legislation purports to do, it effectively takes the position that the reduction in hours or wages is not a constructive dismissal.

“That’s problematic for the majority of my employee clients. It puts the worker in a precarious position unless they are prepared to move forward with a constructive dismissal lawsuit,” she adds.

Before the amendment, temporary layoffs were permitted for no more than 13 weeks in any consecutive 20-week period, says Low.

“If there’s no recall within those 13 weeks it would automatically be deemed a termination,” she says, and the worker would be entitled to notice and severance pay.

The amendment was necessary “to help ensure that as the economy gradually and safely reopens workers will have jobs to return to,” according to a government statement.

“As we take the necessary steps to safely and gradually restart the economy, we need to make sure business owners can reopen their doors and workers have jobs to go back to,” says Monte McNaughton, Minister of Labour, Training & Skills Development. “This regulatory change will protect businesses from being forced to permanently lay off their employees due to COVID-19 and suffer a financial loss that could shutter their operations for good.”

Caught off guard

The timing of the change, made public on May 29, caught many off guard, Low says.

“There’s been chatter within the employment bar that something like this might show up eventually, but it was a bit of a surprise,” she says. “It arrived on a Friday. No announcement. Just ‘Here it is.’ I couldn’t locate it in the places you would normally look for new legislation. It took a long time to find it and a long time to read it.”

Low says the legislation is unclear and left many in employment law with questions.

“Let’s be frank, people who are experts in this area are still having internal debates about what a reduction in hours means in terms of practice. It is still a complicated piece of legislation,” she says. “How does this work, who does it apply to, and, the most important question, can I still sue my employer for constructive dismissal?”

Low notes that while workers can no longer make an ESA claim if they have been laid off or their hours or pay have been cut, they still have common law rights which entitle them to file a civil suit for constructive dismissal and a reasonable, common-law, notice period. 

While some may be unsure about pursuing a lawsuit, there are cases where it may be necessary, she says. 

‘Tricky time’

“Quite frankly it’s a tricky time because people are reticent to give up on the possibility of having a position to return to,” Low says. “At the same time, there’s so much uncertainty about what the employee effectively has to agree to without otherwise commencing a civil suit.”

For those unwilling to take their case to court, not having the benefit of the deemed termination provisions in the Employment Standards Act “puts workers in limbo,” she says.

“This amendment effectively places those layoffs on hold which would otherwise become automatic terminations, allowing an employee to seek a dismissal remedy through the Ministry of Labour,” says Low.

She says the legislation is in effect from March 1, 2020, until six weeks after the end of the declared emergency, so it is important to think “in terms of the timeline.” 

“You have to be careful not only about an evaluation of the reduction of wages and work but also the timing to figure out whether the piece of legislation will apply to your case,” Low says.

Adding to the uncertainty, she says, is the fact that most Ontarians have no experience with layoffs.

“It’s not something we have traditionally seen outside the manufacturing sector,” Low says. “I think we will see a lot of questions about what this means and a real uptick in people seeking advice about what they should be doing.”

She says because the amendment can be difficult to understand, especially for a layperson, she is concerned many will misinterpret their rights under the new legislation.

“If there’s any question in your mind or any concerns about how this might affect your statutory or common law entitlement, you need to seek professional advice,” Low says.