'By forcibly deeming laid-off workers onto emergency leave, and delaying their right to termination and severance pay, the new rules increase the economic precarity of workers'
Ontario’s changes to the rules around temporary layoffs amid the COVID-19 pandemic is “an attack” on the most vulnerable workers, according to the Ontario Federation of Labour (OFL).
On May 29, the government altered the province’s Employment Standards Act (ESA) so that non-unionized employees temporarily laid-off due to COVID-19 would be deemed to be on Infectious Disease Emergency Leave. This change is being applied retroactive to March 1, 2020 and has no clear end date as the new rules will stay in effect until six weeks after the provincial state of emergency ends.
But this amendment removes workers’ access to severance and termination pay, instead of increasing their protection as they struggle through the pandemic, says the OFL.
“The government has turned a leave benefit meant to protect workers into a tool that employers can use to avoid their financial obligations to their employees under the Employment Standards Act, and that’s just not right,” says Patty Coates, OFL president. “By forcibly deeming laid-off workers onto emergency leave, and indeterminately delaying their right to termination and severance pay, the new rules increase the economic precarity of workers at a time when they are the most vulnerable.”
Under the ESA, after 13 weeks, workers on a temporary layoff are considered terminated. This entitles them to termination pay and, in some cases, additional severance pay. However, with the new rules, workers who have been laid-off for COVID-19-related reasons can be kept on the emergency leave indefinitely, delaying any obligation on employers to pay termination or severance, says the union.
“Instead, there is a risk that they will be stuck in emergency leave/lay off limbo for an unknown time with limited or no financial assistance.”
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The new rules also eliminate the constructive dismissal claims option for workers whose hours and wages have been reduced, says the OFL. Under the ESA, workers faced with dramatic changes to the terms and conditions of their employment could claim constructive dismissal – that they had been effectively fired by their employers. A worker can then seek of termination and severance pay from their employers by bringing a complaint to the Ministry of Labour.
However, under the new rules, workers who see their pay or hours cut due to COVID-19 after May 29 can no longer claim to be constructively dismissed to the ministry, says the union. Any complaints that are made on this basis will be automatically dismissed, leaving workers with the option to either accept the loss of hours or wages or sue their employers in court.
“These rules effectively allow employers to cut hours and wages with relative impunity, causing serious financial hardship to working people,” says Coates.
However, it is unclear what impact this change may have on the common law’s consideration of these issues, says a release from Hicks Morley.
“While the [new rules] and the fact of an employee being deemed to be on an ESA leave will undoubtedly be raised by employers in defence of any common law claims for constructive dismissal, employers should not automatically assume that the [changes] would justify a temporary layoff or wage reduction in the absence of express contractual provisions.”
Overall, the new regulations “will provide welcome relief” to employers of non-unionized employees who have had to completely shut down their operations, curtail hours of work or reduce employee wages in response to the pandemic, says Hicks Morley.
In May, Unifor called for the federal government to allow workers receiving the Canada Emergency Response Benefit (CERB) to receive the Supplemental Unemployment Benefits (SUB) they would be entitled to under normal layoff circumstances outside of the pandemic.