Termination Of Employment During COVID-19 PART 1

It is undeniable that Ontario’s economy has been impacted by the COVID-19 pandemic. As a result, many employers are in the unfortunate position of having to reduce their workforce. As such, both employers and employees have approached our team of employment lawyers at SV Law to find out how COVID-19 has affected the laws that govern employee dismissals. 

While many employment standards have remained unchanged during the COVID-19 crisis, employers and employees need to be aware of their rights and obligations when it comes to the workplace and/or ending employment in today’s current circumstances. 

In this article, we provide a brief overview of what Ontario employers and employees (non-unionized) should know about terminations during the COVID-19 era. 

COVID-19 Job Protected Leave Is Still In Effect 

In March 2020, the Ontario government passed the Employment Standards Amendment Act (Infectious Disease Emergencies), which provides job-protected leave called “infectious disease emergency leave” (IDEL) to employees who need to be away from work for various reasons related to COVID-19, including: 

• The employee is under medical investigation, supervision, or treatment for COVID-19
• The employee is acting in accordance with an order under the Health Protection and Promotion Act
• The employee is in quarantine, isolation (voluntary or involuntary), or is subject to a control measure, in accordance with public health information or direction
• The employee is under a direction given by their employer in response to the employer’s concern that the employee might expose other individuals in the workplace
• The employee needs to provide care to a family member for a reason related to COVID-19, such as illness or a school or day-care closure
• The employee is prevented from returning to Ontario because of travel restrictions

The new legislation means that Ontario employers are not permitted to terminate employees who are unable to work due to any of the above reasons. However, employers are not obligated to pay employees during their time away from work unless required by the employment contract or employment policies (i.e. paid sick day policy, if any).

It is important to note that, although the Employment Standards Act, 2000, was amended on March 19, 2020, the leave entitlements are retroactive to January 25, 2020. This means that if an employee was terminated on or after January 25, 2020, because the employee was absent from work for one of the reasons covered under the job-protected IDEL, the employer is required to reinstate the employee.

Further information about the provincial employment legislation amendments can be found on the Ontario Ministry of Labour website here. 

Termination of Employment During Layoff 

On May 28, 2020, the government expanded the IDEL to include employees whose employer had temporarily reduced or eliminated their hours of work because of COVID-19 (see Ontario Regulation 228/20, here). As such, employees who were placed on a temporary layoff on or after March 1, 2020 are automatically deemed to be on an IDEL, rather than a layoff.

However, there is an important distinction between employees who are on IDEL due to one of the reasons listed above and those laid off due to a reduction or elimination of working hours. Employees who had their layoff converted to IDEL can still have their employment terminated by the employer as they are not afforded the “job-protected” rights associated with the IDEL like those who have taken an IDEL due to the specific enumerated reasons listed in s. 50.1 of the Employment Standards Act, 2000 (and summarized in the list above). This is set out in s. 5 of the regulation, which can be found here. 

Employers may find that they are unable to recall some or all of their employees from a COVID-19 related layoff. Provided that the employee is not on a job-protected leave of absence, the employer may initiate termination of a laid-off employee. The employer will be required to pay the employee the proper amount of termination pay in order to avoid a wrongful dismissal claim (discussed in more detail below). 

Employers should be aware that they are required to issue a new record of employment reflecting the change in employment status from layoff to dismissal. This is important for employees who intend to apply for regular employment insurance benefits once they experience an interruption in earnings. 

Termination Pay During COVID-19

Generally, when an employee is dismissed without cause the employer is required to provide the dismissed employee with advance notice of the pending dismissal (called “working notice”) or, more commonly, pay the employee in lieu of advance notice. The amount of pay in lieu of notice (called “termination pay”) will be determined by three sources:

1. The Employment Standards Act, 2000; 
2. The common law; and/or,
3. The employee’s written employment agreement. 

A review of the difference and application of each of these frameworks for notice is outlined in part 2 of this article, linked here.

For legal advice about your specific situation, the team at SV Law can help. 

Please reach out to us here and a member of our Employment Law team will be happy to help.