Ontario makes temporary change to layoff regulations in attempt to help business

Ontario is making temporary changes to the province’s employment and labour laws in an attempt to help businesses avoid paying severance when laying off workers due to the COVID-19 pandemic.

Regulation 228/20 has been added to the Employment Standards Act to give employers the ability to put an employee on a temporary layoff without having to provide severance pay if that layoff becomes permanent, or the employee claims constructive dismissal. Businesses can also avoid paying severance if they cut an employee’s pay or hours, which can also trigger a constructive dismissal in Ontario (**Continue reading this blog to discover why employees are still entitled to FULL severance pay in these cases).

“The changes will create conflict between employers and their employees,” Partner Jon Pinkus, employment lawyer at Samfiru Tumarkin LLP, told the Canadian Press. “Instead of giving them the chance to work it out within the province’s existing labour laws, this will move cases to civil courts.”

“This regulation is extremely one sided,” he said. “The only thing that it does for employees is guarantees them basically the right to reinstatement from these layoffs after the infectious disease leave.”

Ontario employees can still get severance pay

To clarify Pinkus’ point, the new regulation temporarily removes an employee’s ability to obtain MINIMUM severance pay during COVID-19 if their temporary layoff becomes permanent, or their hours or pay are cut by their employer.

However, employees in Ontario are still entitled to FULL SEVERANCE PAY (up to 2 years’ pay) under common law!

Regulation 228/20 does NOT affect their civil rights to severance. Samfiru Tumarkin LLP has been contacted by many employers who believe that they are no longer exposed to potential constructive dismissal claims if they make notable changes to their workers’ terms of employment. The reality is that employees can still pursue a severance package with assistance from one of our experienced and respected severance pay lawyers.

Find out more about Ontario’s misleading regulation and employee rights.

Learn more about your rights during the coronavirus pandemic through our Coronavirus (COVID-19) Knowledge Centre, where you can find resources about your employment rights during COVID-19.