Ontario extends suspension of COVID-19 layoff clock and constructive dismissal rules come in time for the provincewide shutdown

With the announcement of another provincewide shutdown, businesses have access to some relief. The Ontario government has once again extended protections as many employers are forced to reduce hours of work temporarily. The goal is to prevent temporary layoffs of non-unionized employees from automatically becoming permanent job losses or constructive dismissals during the COVID-19 outbreak. The current protections are now in place until July 3, 2021.

Under Ontario’s Employment Standards Act, 2000 (ESA), temporary layoffs become terminations when they exceed the permitted period. Previously set to expire on January 2, 2021, the extension of this amendment ensures that workers remain employed while helping businesses avoid costly termination and severance pay and, ultimately, potential closures.

This extension period also applies to employees who need to claim Infectious Disease Emergency Leave as a result of not being able to perform their job duties because of specified reasons related to COVID-19.

Industry-specific COVID-19 protections

Moreover, the Ontario government created a special rule relating to the hospitality, tourism, and convention and trade show industries in the ESA that governs the connection between recall rights, termination pay, and severance pay. It allows employers to negotiate alternative arrangements with unions for putting termination and severance pay into trust for laid-off employees.  Normally, employers with laid-off unionized workers need to put all potential termination and severance payments in a trust after 35 weeks while employees wait to be recalled to their jobs. The new regulation provides employers and unions the option to use those funds to help keep business doors open. However, the provision is only available if unions and employers both agree to create alternative arrangements.

Many employers in the hospitality, tourism, and trade show industries are facing unique challenges during this COVID-19 pandemic.  This new regulation may help these businesses avoid full closure and allow both employers and employees to slowly recover and plan for long-term sustainability.

Small Business COVID-19 protections

The government is also introducing a new, one time Ontario Small Business Support Grant to help small businesses with fewer than 100 employees that are required to close or restrict services under the provincewide shutdown. Similar to the previous small business relief programs, to be eligible, a business will need to have experienced at least a 20% decline in revenue in comparison to the eligibility period.

These amendments affect rights and obligations of employers and employees under the ESA.  Employees and employers may also have common law rights or obligations that exceed those under the ESA.

With the frequent changes related to COVID-19, both employers and employees need to understand their rights. If you are unsure how the changes affect you, contact Hum Law Today.

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