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Ontario Government Announces Change to Work Reduction/Temporary Layoff during COVID-19

On May 29th, 2020, the Ontario Government introduced a new regulation under the Employment Standards Act. The layoff provisions of the ESA have been temporarily amended to provide much needed relief to any employer who has had to temporarily layoff non-union employee(s) or reduce their hours or wages as a result of COVID-19. Under the new regulation, any layoff or reduction in hours or wages that extends beyond the layoff period is exempt from being deemed a termination of employment, therefore removing the obligation to provide ESA notice and severance.

Under the Employment Standards Act an employer can temporarily layoff an employee, as long as the layoff does not last more than 13 weeks in any consecutive 20 week period or 35 weeks in any consecutive 52 weeks period (depending on a number of factors).  If an employee is laid off for a period longer than a temporary layoff, the employer is considered to have terminated the employee’s employment and the employee will then be entitled to termination pay. The pandemic has taken a bigger toll on the economy and lasted much longer than anticipated. The amendment to the layoff provisions ensures that temporary layoffs that were introduced to provide financial help for employers will not result in terminations.

The following apply during the COVID-19 period from March 1, 2020 until six weeks after the declared emergency in Ontario is terminated or disallowed.

Reduction in hours and wages does not constitute a constructive dismissal

If an employee is laid off or their hours and/or wages temporarily reduced as a result of COVID-19 during the “COVID-19 Period”, this will not constitute a constructive dismissal. This does not apply to an employee who resigned within a reasonable period in response to a constructive dismissal prior to May 29, 2020.

Reduction in hours and/or wages does not constitute a temporary layoff

Under the normal ESA provisions a temporary layoff (no more than 13 weeks in any consecutive 20 week period or 35 weeks in any consecutive 52 weeks period) can crystalize into a termination entitling the employee to ESA notice and severance entitlement. Under the new regulation, during the COVID-19 period an employee who has been laid off or had their hours and wages reduced as a result of COVID-19, is not considered laid off.

Employee absence is now a leave of absence

Employees whose hours have been temporarily reduced or eliminated as a result of COVID-19 during the COVID-19 period are deemed to be on Emergency leave. Employees on Deemed Emergency Leave are exempt from the requirement to advise their employer of the leave. Employees who stopped participating in (or contributing to) a benefit plan as of May 29, 2020, are exempt from benefit continuation requirements during the COVID-19 Period. Employees who were participating in (or contributing to) their employer’s benefit plan past May 29, 2020 are entitled to continue to do so while on leave of absence.


Complaints filed with the Ministry of Labour after May 29, 2020 that temporary reduction or elimination of an employee’s hours of work or a temporary reduction in an employee’s wages constitutes a constructive dismissal or temporary layoff are deemed not to have been filed if the change occurred during the COVID-19 period for reasons related to COVID-19.


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