Not so fast Ontario employers: Ford government extends the COVID-19 period to the 2021 new year

The Government of Ontario announced on September 3 that the COVID-19 period is extended to January 2, 2021.¹ Under Bill 195, the COVID-19 period was previously set to expire on September 4, 2020. Notably, the extension of the COVID-19 period affects the infectious disease emergency leave, temporary layoffs and constructive dismissal claims made under the Ontario Employment Standards Act, 2000 (ESA).

Extension of the COVID-19 period

In response to the COVID-19 pandemic, Ontario issued Ontario Regulation 228/20 Infectious Disease Emergency Leave (Regulation) on May 29, 2020, which designated COVID-19 an infectious disease under the ESA and amended certain rules under the ESA during the “COVID-19 period,” as highlighted in our June 5 legal update. The Regulation has been amended (although not yet publicly released), extending the COVID-19 period to January 2, 2021.  

In sum, during the COVID-19 period (March 1, 2020, to January 2, 2021):

• A non-unionized employee whose employer has temporarily reduced or eliminated his or her hours of work for reasons related to COVID-19 is deemed to be on a job-protected infectious disease emergency leave.
• A non-unionized employee is not considered to be laid off if his or her employer temporarily reduces or eliminates his or her hours of work or wages for reasons related to COVID-19.
• A non-unionized employee is not considered to be constructively dismissed under the ESA if his or her employer temporarily reduces or eliminates his or her hours of work or wages for reasons related to COVID-19.

After January 2, 2021:

• Employees will no longer be deemed to be on infectious disease emergency leave. 
• The ESA’s regular rules around constructive dismissal are expected to resume. This means that a significant reduction or elimination of an employee’s hours of work or wages may constitute a constructive dismissal under the ESA, even if it was done for reasons related to COVID-19.
• The ESA's regular rules around temporary layoff are also expected to resume. For practical purposes, an employee’s temporary layoff clock re-sets on January 3, 2021.

Take-aways

Ontario announced that the extension of the COVID-19 period to January 2, 2021, is intended to protect jobs by helping businesses avoid costly payouts and closures. Notably, during this extended COVID-19 period, an employer is prohibited from terminating the employment of or engaging in reprisal against an employee who takes or plans to take infectious disease emergency leave under the ESA (although an employee’s employment may still be terminated for reasons unrelated to the leave). 

Furthermore, during the extended COVID-19 period, a temporary reduction or elimination in hours or wages of a non-unionized employee will not constitute a layoff or a constructive dismissal under the ESA. Complaints filed with the Ministry of Labour during the extended COVID-19 period alleging that an employer’s temporary reduction or elimination of an employee’s hours of work, or an employer’s temporary reduction of an employee’s wages, constitutes termination or severance of employment would be deemed not to have been filed if certain conditions are met. Note the Regulation may not necessarily affect how courts apply the doctrine of constructive dismissal at common law, which is distinct from constructive dismissal under the ESA. 

Ontario’s announcement extending the COVID-19 period is welcome news for employers that need more time to re-open and return to full operations. For employers that have already issued layoff notices to employees based on the former September 4, 2020, COVID-19 period expiry date may want to carefully consider their communications to employees in light of this recent development.