Work Reduction or Temporary Layoff During “COVID-19 Period” Not Termination
May 30, 2020
On May 29, 2020, the Government of Ontario introduced a regulation under the Employment Standards Act, 2000 (“ESA”) that provides welcome relief to any employer that temporarily laid off a non-union employee or reduced non-union employee wages and/or hours due to COVID-19. The regulation largely exempts any such layoff or reduction from being deemed a termination of employment, so that there is no obligation to provide ESA notice and severance.
In enacting the regulation, the Government of Ontario has acknowledged that the pandemic’s impact on the provincial economy and labour market is likely to last much longer than the 13-week temporary layoff period under the ESA. If this regulation had not been passed, temporary layoffs and wage and hour reductions introduced by Ontario employers as a means of mitigating the financial impact of COVID-19 would have crystallized into terminations of employment, through no fault of the employers or employees.
The reality is, the layoff provisions of the ESA needed to be temporarily amended to reflect the impact of COVID-19 on Ontario’s workplaces and to provide employers the opportunity to maintain the employment relationship throughout this period of uncertainty, without triggering substantial termination and severance payment obligations.
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