During the Covid-19 pandemic, many employers put employees on a temporary layoff, however, this had to be done carefully and within the parameters of the law.
The law regarding employment in Ontario is as follows;
The Employment Standards Act, RSO 2000 (ESA) does not address an employer’s right to impose temporary layoffs. As a result, an employer cannot impose a temporary layoff unless there is an express or implied term in the employment contract that provides for it. This is one reasons for making sure that employment contracts are up-to-date and in line with the law.
The ESA does however outline limits and restrictions on the length of time for temporary layoffs. Section 56(2) of the ESA provides that a temporary layoff is not more than 13 weeks in a 20-week period unless the employer continues to make significant payments to, or on behalf of, the employee. If “significant payments” are being made, a temporary layoff can last up to 35 weeks in a 52-week period. If a temporary layoff lasts longer than the above limits, then it is deemed to be a termination wherein the employee is entitled to pay in lieu of notice as per s. 56(1) of the ESA. The employee’s employment is deemed to have been terminated on the first day of the lay off as per s. 56(5) of the ESA.
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On May 29, 2020, the Ontario government released a new regulation, O. Reg. 228/20, under the ESA pertaining to “Infectious Disease Emergency Leave” (“IDEL”), which suspended time limits for temporary layoffs. This was unprecedented as it allowed employers to put employees on temporary layoff for an unspecified and unlimited amount of time.
The government declared that the IDEL period ended on July 30, 2022 and therefore employees must either be recalled back to work or their employment must be terminated. This includes an employee’s right to reinstatement on or before July 31, 2022 (after the conclusion of the COVID-19 period) to the position that the employee most recently held with the employer, if it still exists, or to a comparable position if it does not.
Many employers find themselves in a position where they had put employees on temporary layoff due to the COVID-19 pandemic and economic downturn, and now are required to either call the employees back to work or terminate the employment contracts whereby they must be given notice or payment in lieu of notice. The length of notice depends on a variety of factors such as whether or not the employment contract limits the employee’s rights to the ESA, the employee’s position, age, and length of service. Another factor that courts are increasingly paying more attention to are the current economic conditions, and the time it will take the employee to find employment.
The environment that currently surrounds temporary lay offs can be difficult for both employers and employees to understand and can lead to a wrongful dismissal. If you are an employer or an employee and want to know more about your rights surrounding wrongful dismissal, contact the lawyers at Malicki Sanchez Law who will be able to assist you.
Phone: 905-274-1650 Fax: 905-274-1652
