Very BAD news for employees: Ontario Government removes statutory rights in new pro-business COVID-19 regulation 228/20. 

A large number of workers in Ontario have temporarily lost the Government’s protection if their pay or hours of work are reduced. On May 29, 2020, the Government made changes to the Ontario Employment Standards Act, 2000 to permit employers to cite COVID-19 as the basis to temporarily reduce wages or hours of work.  Impacted employees will not be entitled to termination and severance pay under the Ontario Employment Standards Act but instead are treated as on an unpaid leave of absence. 

The Government’s amendments were likely intended to address the fact that, under the pre-existing legislation, after a defined period of time (either 13 or 20 weeks) temporary layoffs automatically became terminations.  Therefore, many employees who were laid off since March 2020 and who were not yet recalled to work would soon automatically qualify for termination and severance pay.  The changes to the legislation now deem that these employees are instead on an unpaid leave of absence for the time being. 

Despite the Government’s intentions, the changes to the Ontario Employment Standards Act, 2000, in our view, go much farther than dealing with the issue of temporary layoffs automatically becoming terminations.  Unfortunately, these amendments also provide employers with the right to reduce hours of work or pay for employees who are still working and it removes their ability to claim termination and severance pay in these circumstances. 

The new changes to the Ontario Employment Standards Act, 2000 also do not define the extent to which businesses must actually be impacted by COVID-19 and even a minor impact would potentially qualify. This is concerning as many employers could cite COVID-19 as a basis to change employees’ hours of work or pay, despite other motivations for doing so.

The changes to the Ontario Employment Standards Act, 2000 are bad news for lower-income employees who cannot afford to bring employment cases to court. Previously these claims could be pursued by the Ministry of Labour, which provides a faster and free alternative to court claims, in order to enforce violations of minimum employment standards.

Despite this, it is very important for both employees and employers to understand that the changes to the Ontario Employment Standards Act, 2000 do not impact the rights that employees have in court.  In fact, section 8(1) of the Ontario Employment Standards Act, 2000 states that civil proceedings are not affected.  Therefore, a substantial change to working conditions, such as a temporary layoff or reductions in pay or hours, still amounts to constructive dismissal in the vast majority of cases and these employees can still claim termination-based damages through the courts. 

The bottom line is that instead of filing claims with the Ministry of Labour, workers affected by the new legislation should consider hiring lawyers who can still bring their cases to the courts. This is where the team of lawyers at Whitten & Lublin can help. We are one of Canada’s premier workplace firms and we have the knowledge and expertise to assist employees when their rights are affected.

Ontario Regulation 228/20 Specific Changes Explained:

Subsection (4): instead of a temporary layoff, which would have amounted to a termination of employment after a defined period of time, you are now deemed to be on declared emergency leave, without pay, if your hours are temporarily reduced or eliminated due to COVID-19. You will be entitled to reinstatement unless your position genuinely no longer exists.

Commentary: This section makes little sense unless hours of work are eliminated altogether. Otherwise, an employee whose hours are temporarily reduced but not eliminated is automatically on leave of absence without pay, yet still working reduced hours. 

However, if your hours are eliminated due to COVID – it is no longer a constructive dismissal under the ESA, as below. But at least you are entitled to reinstatement when the emergency order is lifted unless your position truly no longer exists. 

Subsection (5): if you were already terminated prior to May 29, 2020, you are not on declared emergency leave (and thus would not be eligible for reinstatement).

Subsection (6): from March 1, 2020 and until the COVID-19 emergency is over if your hours were or are temporarily reduced or your wages were or are temporarily reduced or eliminated, due to COVID-19, it is not a layoff and does not give rise to termination or severance under the ESA.  Instead you are on a declared emergency leave. 

Commentary: if your hours of work or pay were temporarily reduced or eliminated in response to COVID-19 you cannot claim termination and severance pay under the ESA. Instead, you are considered to be on an indefinite declared emergency leave of absence from work. 

Subsection (7): from March 1, 2020 and until the COVID-19 emergency is over, a temporary reduction or elimination of hours, or a temporary reduction of wages, due to COVID-19, is not a constructive dismissal under the ESA.

Commentary: Employers can reduce or eliminate your hours of work, or reduce your wages, (temporarily) and this is not a constructive dismissal under the ESA and thus you cannot claim termination and severance pay under the ESA. 

Outcome: Employers will reduce hours or wages in the name of COVID-19 and employees can only make claims in court that this is constructive dismissal. This will remove minimum statutory rights for employees and can make it more difficult for many to enforce their rights.

Subsection (8): new employee complaints to the Ministry of Labour about any of the above amounting to a constructive dismissal, shall be deemed to be thrown out.

Outcome: employees cannot complain to the Ministry of Labour about changes to hours or pay due to COVID-19. However, they still have the right to hire a lawyer to take steps to enforce their claims in court. The ESA does not affect civil (court) remedies.  In fact, section 8 of the ESA specifically states that “no civil remedy of an employee against his or her employer is affected by the Act”.  This should provide employees with some comfort that the ordinary rules of workplace law can still be enforced despite the changes to the ESA. 

** unionized employees are exempted from this regulation.

Whitten & Lublin, Employment Lawyers is one of Canada’s Premier Workplace Law Firms. If your hours of work or pay are affected as a result of the changes to Ontario Employment Standards Act, 2000, and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.

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