Ontario Passes Regulation 228/20: Infectious Disease Emergency Leave

On May 29, 2020, the Legislative Assembly of Ontario passed O. Reg. 228/20: Infectious Disease Emergency Leave (the “Regulation”). The Assembly also revoked the previous regulation with the same name, O. Reg 66/20: Infectious Disease Emergency Leave, which was passed into force on March 19, 2020.

The Regulation makes significant changes to the application of the Employment Standards Act (“ESA”) for non-unionized employees that have seen reductions in hours or wages as a result of the COVID-19 pandemic. Most significantly, non-unionized employees who have seen their hours reduced or eliminated or their wages reduced by their employers because of COVID-19 are deemed under the Regulation to not be on a temporary layoff for the purposes of the ESA, and the reduction or elimination of hours or wages is deemed to not constitute a constructive dismissal for the purposes of the ESA. 

The COVID-19 Period

The Regulation defines the time when its rules are in force as the “COVID-19 Period”, which is from March 1, 2020 to six weeks after the end of Ontario’s declared state of emergency under Order in Council 518/2020 (Ontario Regulation 50/20). At time of writing, the declared state of emergency is due to expire on June 19, 2020. Unless the declared state of emergency is extended again, the COVID-19 Period under the Regulation will end on July 31, 2020. Absent the passage of any additional regulations or legislative amendments, the application of the regular provisions of the ESA rules will return to normal at the end of the COVID-19 Period. 

Deemed Infectious Disease Emergency Leave

As we stated in our previous post, the amendments to the ESA on March 19, 2020 created a new leave of absence called “Infectious Disease Emergency Leave”. Pursuant to those amendments, all employees, whether unionized or non-unionized, are entitled to an unpaid job-protected leave of absence when absent from work for various reasons related to the COVID-19 pandemic. This entitlement exists retroactively to January 25, 2020. 

The Regulation expands the application of this leave. It provides that non-unionized employees whose hours of work have been temporarily reduced or eliminated for COVID-19 related reasons during the COVID-19 Period are now deemed to be on an Infectious Disease Emergency Leave. 

Employees on deemed Infectious Disease Emergency Leave are entitled to all protections that apply generally to leaves of absence under the ESA (e.g., the right to be reinstated when the leave ends), with one exception. The rules regarding benefit plans during the period of leave are unique. Normally, employees on a leave of absence under the ESA are entitled to continue to participate in benefit plans (and employers are similarly obligated to continue paying contributions to such plans for employees that are on leave). Under the Regulation, employees on deemed Infectious Disease Emergency Leaves do not have benefit continuation rights if their benefits ceased on or before May 29, 2020. In other words, employers who provided benefits to their employees during periods of reduced or eliminated hours after May 29, 2020 will be required by law to continue those benefits for all remaining periods of reduced or eliminated hours, whereas employers who ceased benefits on or before May 29, 2020 will not.

Deemed Infectious Disease Emergency Leave – Exceptions

The following persons will not be deemed to be on an Infectious Disease Emergency Leave:

• Employees whose employment has been terminated by their employer during the COVID-19 Period;
• Employees who have been laid off during the COVID-19 Period because of a permanent discontinuance of all of the employer’s business at an establishment;
• Employees who, before May 29, 2020, were constructively dismissed by their employer and who resigned within a reasonable period of time;
• Employees who, before May 29, 2020, were deemed to have been terminated or severed from their employment because they were on a layoff that was longer than permitted under the ESA.

Certain Employees Deemed to not be on Layoff

The Regulation states that an employee whose hours of work are temporarily reduced or eliminated or whose wages are temporarily reduced during the COVID-19 Period for reasons related to COVID-19 is deemed to not be on a temporary layoff under the ESA. For the duration of the COVID-19 Period, employers are therefore free to continue their employees’ periods of reduced or eliminated hours of work or reduced wages without fear of triggering the deemed termination provisions under the ESA’s normal layoff provisions. However, once the COVID-19 Period ends, employees that continue to experience reduced hours or wages will begin a period of temporary layoff under the ESA’s normal layoff provisions (assuming such reduction meets the statutory threshold to be considered a temporary layoff). 

This rule does not apply to employees who, before May 29, 2020, were deemed terminated or severed because they were on a layoff that was longer than permitted under the ESA. It also does not apply to employees that are laid off during the COVID-19 Period because of a permanent discontinuance of all of the employer’s business at an establishment.

Certain Actions deemed not to be a Constructive Dismissal

The Regulation states that the temporary reduction or elimination of an employee’s hours of work, or the temporary reduction in an employee’s wages does not constitute a constructive dismissal. To fall under this exception, these actions must be related to COVID-19 and must occur  during the COVID-19 Period.

This rule does not apply to employees who were constructively dismissed and resigned within a reasonable time if such resignation occurred before May 29, 2020. 

While this deeming provision is welcome news to employers that have scaled back operations because of the COVID-19 pandemic, its impact on constructive dismissal claims under the common law is not yet known.

Certain Complaints to the Ministry of Labour deemed not to have been filed

The Regulation states that certain complaints made to the Ministry of Labour are deemed to have not been filed. This provision of the Regulation is fairly complicated, but generally speaking the complaints that are deemed not to have been filed are those that will be impacted by the provisions of the Regulation, described above, that deem certain employees to not be on layoff or not to have been constructively dismissed. 

The Changes apply only to Non-Unionized Employees

The operative sections of the Regulation do not apply to employees who are represented by trade unions. Therefore, the ordinary layoff rules continue to apply in unionized workplaces. Furthermore, unionized employees on layoff because of the COVID-19 pandemic will not be deemed to be on an Infectious Disease Emergency Leave. 

We will continue to monitor developments related to the impact of the COVID-19 pandemic on the workplace and will post further updates as information becomes available.