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As part of its efforts to address the COVID-19 pandemic, the Ontario government changed the rules on temporary employment layoffs as well as temporary reductions of hours and salary. The rule changes were to stay in effect only for the duration of the COVID-19 period, defined as the duration of Ontario’s pandemic-related state of emergency, plus six weeks. The state of emergency ended on July 24, 2020 and so the COVID-19 period will end on September 4, 2020 along with some of the employment law changes that came with it.

During the COVID-19 period, an employee on a temporary layoff due to the pandemic was deemed to be on an unpaid infectious disease emergency leave. This allowed employers to impose temporary layoffs without the restriction of the ordinary 13 week limitation in the Employment Standards Act, 2000. It also allowed the employer to impose a temporary layoff without having to have that right enshrined in an employment contract. Without that change, a temporary layoff not allowed by the employment contract, or one that went beyond the statutory time limits, would effectively be the same as an outright dismissal. The same rule change also provided that a temporary reduction in an employee’s hours or salary did not constitute constructive dismissal as long as the reduction was due to the pandemic. So, a business operating under reduced hours due to the pandemic could reduce its staff’s hours and pay accordingly.

On September 4, 2020, those rule changes are expiring. After that date, an employer that wishes to lay an employee off temporarily or reduce their hours or salary will be subject to the same rules that existed pre-COVID-19. If there is an employment contract allowing for a temporary layoff, the employer may still impose a layoff, but it will be subject to the same 13 week limitation as previously existed (subject to exceptions discussed in our previous posts on the subject). We recommend seeking legal advice with respect to new or continuing layoffs and new or continuing changes to employee hours or salary. It is critical to get advice before putting such a plan into action, as the consequences to the employer can be expensive especially (but not only) for longer service and higher-level employees.

Please do not hesitate to contact me for more information on topics covered in this post.

Josephine A. McCready

Associate – Civil Litigation, Employment and Construction Law Groups

Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.

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