Ontario extends COVID-19 layoffs AGAIN, jeopardizing employers and nearing 2-year layoffs for thousands

On Thursday, Sep. 16 the Ontario government decided to once again to extend its unpaid temporary layoff/emergency leave program. Designed to protect employers from constructive dismissal claims for severance during the COVID-19 pandemic, the government’s latest decision may actually force tens of thousands of workers to pursue full severance pay and further complicate companies’ operations during the ongoing pandemic, says employment lawyer Lior Samfiru.

“With this latest extension, the government is forcing employees that have been on drastically reduced or no employment income since March 2020 to pursue terminations, rather than wait another three months without compensation of any kind,” said Samfiru, partner at Samfiru Tumarkin LLP.

Through a regulation in the Employment Standards Act introduced in early 2020, employers have been able to reduce employees’ pay or place them on a temporary layoff in Ontario due to the pandemic, without the change being considered a termination and subject to minimum severance pay. Employees are instead considered to be on a job-protected Infectious Disease Emergency Leave. This protection was set to expire on Sep. 25. Ontario’s announcement extends this protection until Jan. 2, 2022.

Once the layoff provision expires, employers will have the option of placing their employees on an actual temporary layoff, for a period of up to 35 weeks, meaning many workers could ultimately find themselves on a layoff until September 2022.

“Our firm has spoken with hundreds of employees that were willing to wait until September 25 to see if their employer would finally call them back to work. Many of these individuals will not be willing to wait until January, nearly two years since they were originally sent home.”

“The government is actually creating the very problem it was trying to avoid. Businesses will find themselves at risk of paying out more in common law severance packages than they would have under minimum provincial rules.”

Under common law, employees who have seen their pay cut or placed on a layoff can treat their job as being terminated, and pursue a severance package of up to 24 months’ pay with help from an employment lawyer.