Leave and Layoff Rules Extended to January 2021 and Other COVID-19 Updates

Brian, September 10, 2020

September 2020 will be a crucial month in Ontario’s struggle with the coronavirus pandemic. As schools re-open, wage subsidy and CERB programs wind down, and COVID-19 regulations get a last-minute extension, here are some key changes that employers need to know:

Temporary Layoffs Will Extend to January 2, 2021

In a previous blog post, we highlighted changes to the temporary layoff rules under the Employment Standards Act (ESA) in response to COVID-19. Retroactive to March 1, 2020, employees whose work hours were reduced or eliminated due to COVID-19 were considered to be on a leave of absence, not a temporary layoff. In practice, this meant that the maximum time periods for temporary layoffs – 13 weeks, or 35 weeks if benefits are continued – did not apply to COVID-19 layoffs. These layoffs could continue indefinitely.

This measure was scheduled to end on September 4, 2020, but the Ontario government has now extended it until January 2, 2021. At that point, the regular temporary layoff “clock” will start ticking. This means that COVID-19 layoffs can continue another 13 weeks after that date (until April 3, 2021), or 35 weeks if benefits are continued (until September 4, 2021).

Employers should beware, however, that even though the ESA will allow longer temporary layoffs, the common law may not. The longer a layoff extends, the greater the risk that the common law will consider it a constructive dismissal.

Employees’ Jobs are Protected Until January 2, 2021

Employees on temporary layoffs or whose hours or pay were reduced due to COVID-19 were deemed to be on job-protected leaves of absence. Those leaves have also been extended from September 4, 2020 until January 2, 2021. Just like employees on other job-protected leaves (e.g., parental leave), these employees cannot be terminated. As of January 2021, they will be entitled to return to their previous job if it still exists, or to a similar job if the previous one no longer exists.

This does not mean that laid-off employees are completely immune from termination. Terminations are still allowed for reasons that are completely unrelated to the leave and that are supported by strong business justifications. Indeed, if an employer knows for certain that a laid-off employee will never be recalled, it can be kinder to notify them earlier instead of waiting until January 2, so that they can start looking for new jobs.

However, terminating an employee on a job-protected leave – which includes any employee who was laid off or whose hours were reduced due to COVID-19 – still carries large legal risks. We strongly recommend seeking legal advice if you are considering terminating a laid-off employee before January 2.

Schools are Opening

Ontario’s school re-opening plan has faced controversy. Four teachers’ unions recently announced they would bring a complaint to the Ontario Labour Relations Board that the government is failing to adequately protect teachers’ occupational health and safety. Whichever side prevails, the Board’s decision will have important implications for employers’ COVID-19 safety obligations, and we will update you when it is released.

Meanwhile, many employers and employees are looking forward to school re-openings, not only for the important education and social benefits for children, but also as a crucial childcare measure allowing parents to return to full-time work. Yet employers must tread carefully when employees request childcare accommodations. Generally, employees can be expected to send their children to school despite some COVID-19 misgivings, rather than requesting childcare accommodation from the employer. However, a parent may be entitled to accommodation if they genuinely need to keep a child home to avoid exposing a household member who is immunocompromised (or otherwise high-risk) to the virus. Similarly, employees may be entitled to adjusted work hours to pick children up from school if they cannot access after-school childcare.

CEWS and CERB are Winding Down

The federal government is slowly phasing out its wage subsidy program (CEWS), with subsidies falling from 75% of wages from April to June, to 20% by December. Various other changes have also been made to the CEWS program; you can read the details here.

Meanwhile, the Canada Emergency Response Benefit (CERB) has been extended for 4 additional weeks, until September 26, 2020. After that, employees can transition to expanded Employment Insurance benefits or one of the government’s other CERB replacement programs. Additional details can be found here.

As always, the COVID-19 situation is changing rapidly, and we will continue to update you as new developments arise.

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