How employers can manage the fallout of the end of IDEL

Ontario’s deemed Infectious Disease Emergency Leave (“Deemed IDEL“) period ended on July 30^th, 2022. This does not affect employees’ entitlement and employers are being held accountable and successfully sued for constructive dismissal for their employees.

Employers who relied on IDEL to put employees on leave are at immediate risk of substantial cost, as employees who are not returned to work can sue for constructive dismissal. And as a result of the Waksdale decision most contracts written before June 6 2020 are invalid. In practical terms, most employees with long term records of employment may be due up to 2 years, or, on average, 1 month per year of service under common law.

Leaving employees on indefinite leave has costly consequences when constructive dismissal is alleged.  It is important to seek advice from experienced counsel to craft a strategy to mitigate, if not eliminate, these liabilities.

Deemed IDEL came into being during the pandemic to provide relief to both employees and employers. For employers, Deemed IDEL was intended as a relief measure. Under certain circumstances, IDEL allowed for temporary reduction or elimination of employee hours and wages, without triggering a deemed termination, but with an obligation for the employer to return the employee to work after the end of the IDEL period. With the Deemed IDEL period ended, employers can no longer place their employees on leave indefinitely, even if the pandemic still impacts their business. that the Deemed IDEL period has ended, employers may still rely on temporary layoff provisions in Ontario’s Employment Standards Act (“ESA”) to continue to place employees on leave. However, there are significant restrictions on the length of temporary layoffs. A breach of these restrictions might be deemed as constructive dismissals under the ESA, and employees might be entitled to termination pay and other provisions if they claim constructive dismissal.

What should you do if your employees were on IDEL past July 30^th?

Employers who currently have employees on IDEL will need to decide whether to call these employees back to work, rely on ESA temporary layoff provisions to extend the time before calling them back to work, or terminate them to avoid a breach of the ESA. (Depending on whether employees’ benefits are continued or not during the layoff, there are two-time limits under the ESA for temporary layoffs.

What employers should know about temporary layoffs moving forward

The ESA does not create a right for the employer to temporarily lay off its employees, but sets the conditions for and duration of layoffs. However, unless an employer has the contractual right to do so, employees put on temporary layoff can claim constructive dismissal, notwithstanding the ESA temporary layoff provisions. Employers are warned to closely comply with the conditions for temporary layoffs to avoid potential costly claims.