On May 29, 2020, the Ontario government announced critical changes to the Employment Standards Act, 2000 (“ESA“). The amendments allow an employer to unilaterally reduce an employee’s wages or hours of work without necessarily invoking the ESA’s notice and severance pay requirements.
Before, employees who were laid off for a period of more than 13 weeks during period of 20 consecutive weeks were eligible to severance pay from their employer. In fact, the calculation of the weeks that an employee was laid off for included any week in which the employee earned less than one half of the amount that they would have earned at their regular rate, in a regular work week. This means that even if the employee was only dropped down to part-time hours, they may have become eligible for severance pay.
However, in light of the COVID-19 crisis, the Ontario government has taken drastic steps to help employers avoid making termination payments that could end up putting them out of business. These changes are retroactive to the beginning of the “COVID-19 period”, which is defined as March 1, 2020, and will remain in place until 6 weeks after Ontario’s State of Emergency has expired.
It is important to note that these amendments do not apply to individuals employed under a collective agreement.
What You Need to Know
The main benefit to employers in the amendments to the ESA is that a reduction in wages or hours worked is not considered a layoff. Instead, the changes allow the employer to place the worker on a temporary leave and preserve their employment when the business returns. Therefore, the employee does not become eligible for severance payments without their employment being terminated.
Additionally, reducing an employee’s wages or even eliminating their hours of work will not result in a constructive dismissal if it occurs during the COVID-19 period and is related to the COVID-19 pandemic. Demonstrating that the reduction was related to the pandemic will likely be a relatively easy threshold for employers to meet if complaints of constructive dismissal are brought to the court.
However, it should be noted that the amendments to the ESA do not impact the civil remedies employees may seek. For instance, a unilateral change in an employee’s working conditions, which may include a reduction in hours or wages, may still constitute a constructive dismissal. In effect, instead of the usual recourse employees have by filing claims with the Ministry of Labour to investigate a complaint of unjust dismissal, employees would now be forced to bring civil proceedings in front of the courts in order to claim a remedy for unjust dismissal.
Protections are also Afforded to Employees
It is not only employers who will experience the changes noted in the ESA, as employees are being given greater deference regarding time away from the office. An employer is no longer allowed to request a doctor’s note if an employee believes they should be in self-isolation or quarantine. Further, the ESA now provides that an employee can take an unpaid leave in order to isolate themselves or provide care for others, such as children, who are now forced to be at home.
To ensure that you are properly abiding by the requirements, Vice & Hunter LLP is eager to provide you with the right advice to help you navigate this unprecedented time. If you have questions regarding your duties as an employer or what you may be entitled to as an employee, please contact J.F. Lalonde, a lawyer with over 15 years’ experience representing both employers and employees.