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Canada | 出版物 | June 5, 2020 - 5 PM ET
The Regulation prescribes a new reason for which employees will be deemed on unpaid, job-protected infectious diseases emergency leave under sub-clause 50.1(1.1)(b)(vii) of the ESA. Specifically, the Regulation provides, among other things, that non-unionized employees are now deemed to be on infectious diseases emergency leave if they will not be performing the duties of their position because their hours of work are temporarily reduced or eliminated for reasons related to COVID-19 during the COVID-19 period.
Qualifying conditions
The following summarizes qualifying conditions an employee must meet to be considered on deemed emergency leave (COVID-19 infectious disease emergency). In order for this leave to apply:
Other requirements
All requirements and prohibitions under the ESA that apply to ESA-protected leaves also apply here, subject to the following exceptions:
Exceptions
The Regulation provides that should one of the following exceptions apply, employees will not be considered to be on infectious disease emergency leave (COVID-19 infectious disease emergency) because the employer has temporarily reduced or eliminated their hours of work:
Further, the Regulation states that, during the COVID-19 period, a qualifying employee who has been given written individual (and, if applicable, mass) notice of termination in accordance with the ESA will not or will no longer be on infectious disease emergency leave unless the employer and employee agree to withdraw the notice of termination.
Normally in Ontario, temporary layoffs are permissible for up to 13 weeks in any consecutive 20-week period, or up to 35 weeks in any consecutive 52-week period, if certain conditions are met. In the normal course of things, where a layoff exceeds the legally permissible duration, the employer’s employees are deemed to be terminated, without cause.
Should this occur, the ESA requires that employers provide their employees with their termination entitlements. Under the ESA, this may include notice of termination (or pay in lieu thereof), statutory severance, and benefit continuation during the notice period. Depending on the language of the employment contract, if an employee’s termination is governed by the common law, he or she may be entitled to a more generous notice period, which may far exceed the minimum notice requirements under the ESA. Moreover, an employer may be subject to mass termination requirements, including specific notice obligations (distinct from those surrounding individual notices of termination), if the employment of 50 or more employees is terminated at its establishment1 within a four-week period.
Under the Regulation, employees whose hours of work are reduced or eliminated, or whose wages are reduced, are no longer considered to be on a temporary layoff under sections 56 (what constitutes termination) and 63 (what constitutes severance) of the ESA. This means that some affected employees may no longer have the option to be on a temporary layoff during the COVID-19 period. Practically speaking, for employees with a reduced or eliminated number of hours, the Regulation will instead provide for the protection of these employees’ employment by deeming them to be on emergency leave (COVID-19 infectious disease emergency) for any period of time during the COVID-19 period where they met the leave’s qualifying criteria. Employees with a reduction in wages, but with no reduction or elimination of hours, are not, under the Regulation, deemed to be on COVID-19 infectious disease emergency. On the ground, employees with reduced wages may therefore continue working, or, where possible, consider other options that may be available to them.
Under the ESA, where an employee is constructively dismissed and, in response, resigns from his or her employment within a reasonable period, the employee’s employment may be deemed terminated and severed, without cause. As a result, employers in such a situation may be held liable to provide the employee with his or her termination entitlements.
Moreover, unresolved constructive dismissal cases could lead to a complaint filed with the Ministry of Labour or to judicial proceedings commenced in Superior Court. As many employers know too well, both termination payouts and litigation can be costly exercises. For this reason, employers forced to consider eliminating or reducing employees’ hours of work, or reducing their wages, have done so with extreme caution, despite the pandemic’s largely negative impact on business and industry.
Normally, significantly reducing or eliminating hours of work, or reducing wages could be considered a constructive dismissal for ESA purposes, even if the employer’s measures in this regard are temporary. Generally speaking, the guiding principle in Ontario therefore limits employers’ ability to reduce an employee’s wages by more than 10%, or to significantly reduce or altogether eliminate an employee’s hours of work.
In light of COVID-19, employers weathering the pandemic have been forced to consider how these principles apply today. The Regulations now provide employers with some clarity in this regard. Specifically, under the Regulations, an employer’s decision (i) to temporarily reduce or eliminate an employee’s hours of work for reasons related to COVID-19, or (ii) to temporarily reduce an employee’s wages for reasons related to COVID-19, will not be considered a constructive dismissal under the ESA if the employee’s employment is terminated and severed on or after May 29, 2020. It should be noted that, although not specified in the Regulation, the Ministry of Labour has indicated that the Regulation is not intended to affect or apply to common law claims of constructive (or wrongful) dismissal filed in Superior Court.
As noted above, the Regulations define the circumstances in which both hours and wages are “reduced.”
In addition, all complaints filed with the Ministry of Labour alleging an employer’s decision to temporarily reduce or eliminate an employee’s hours of work, or to temporarily reduce an employee’s wages, constitutes a termination and severance of employment on the basis that he or she has been constructively dismissed will be deemed not to have been filed if certain conditions are met. Regarding eliminating or reducing of hours of work, these conditions are:
Terminations and severances of employment resulting from a constructive dismissal as understood under the ESA that occur prior to May 29, 2020, remain subject to the ESA’s otherwise normal rules surrounding termination and severance entitlements in cases of constructive dismissals. In other words, employees who claim they have been constructively dismissed before May 29, 2020, on the basis of reduced or eliminated hours of work, or reduced wages, and, in response, resign from their employment within a reasonable period, may be owed termination and severance entitlements as they normally would under the ESA. Likewise, employees who claim they have been constructively dismissed for a reason other than a COVID-19-related temporary reduction or elimination in work hours, or a temporary reduction in wages, may be owed termination and severance entitlements regardless of the termination date.
For many employers, the Regulation’s coming into force is welcome news. In particular, employers forced to temporarily eliminate or reduce their employees’ hours of work may now be able to retain much of their workforces on payroll using job-protected leave during the COVID-19 period. Likewise, employees who are facing job losses because of a temporary elimination or reduction of hours of work due to COVID-19, may now be able to retain their employment under the ESA’s emergency leave (COVID-19 infectious disease emergency leave).
Although the Regulation is a sign of relief for a great number of employers across the province, moving forward, there are some key issues employers may want or need to keep on their radar. In particular, consideration should be given to the following:
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Sponsors and project developers across the renewables and energy transition space are currently facing a challenging macroeconomic environment.
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