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Ontario Regulation 228/20 – Constructive Dismissal for Layoffs Due to Covid-19

On May 29, 2020, the Ontario Government enacted Ontario Regulation 228/20 (the “Regulation”) under the Employment Standards Act, 2000 (“ESA”), which provides temporary relief from the ESA’s deemed termination provisions for employers whose business has been affected by COVID-19.

There are three main effects of the Regulation:

Employees who have been laid off due to COVID-19 are deemed to instead be on a an “Infectious Disease Emergency Leave”.

  • Any temporary reductions of hours or wages are deemed to not to be constructive dismissals under the ESA if for reasons related to COVID-19.
  • Any claims filed with the Ministry of Labour during the COVID-19 period[1] alleging constructive dismissal due to the temporary reduction or elimination of an employee’s hours of work, or temporary reduction in an employee’s wages, is deemed not to have been filed. In other words, employees can no longer assert that they have been constructively dismissed due to these circumstances.

Impact on Employees

Non-unionized employees should be aware that they can no longer submit a Ministry of Labour complaint alleging constructive dismissal surrounding COVID-19 lay-offs or reductions. If employees have been laid off, or experienced a reduction in wages or hours, they will have to look to the common law (filing a claim in court) for a constructive dismissal remedy.

Impact on Employers

The Regulation provides some relief for employers who may otherwise have been subjected to complaints to the Ministry of Labour, as their employees are now deemed to be on an Infectious Disease Emergency Leave and Ministry of Labour complaints are now barred.

However, note that employees still maintain their common law right to claim constructive dismissal, as Section 8 of the ESA explicitly states “no civil remedy of an employee against his or her employer is affected by this Act.”

Employers should keep in mind that a judge may decide that such layoffs constitute constructive dismissal under the common law, notwithstanding the legislative changes to the ESA.  Until courts have re-opened and regular court operations resume, we are unsure of how such cases will be decided.  

If you have questions about your employment,  please contact a member of our Employment Law department at McKenzie Lake Lawyers LLP.

This blog post was written by Lawyers John McNair, Victoria Yang and Summer Student Jonathan Gross.

[1] “COVID-19 period” means the period beginning on March 1, 2020 and ending on the date that is six weeks after the day that the State of Emergency is terminated or disallowed.