You’ve been sitting at home staring at your phone and waiting for them to call and answer your messages. At first, it was a week. Then a month. And now you’re here. You weren’t ghosted by your date. You’ve been ghosted by your employer.
Under s. 6 of the regulation, if an employee’s hours of work or their wages are reduced or eliminated during the Covid-19 period, they will not be considered laid off.
Normally under s. 56 of the Employment Standards Act (ESA), if either of the above were to happen for longer than 13 weeks in a consecutive 20 week period, an employee is deemed to have been automatically terminated.
The extension now means that the Covid-19 period will expire on January 2, 2021 (having retroactively begun on March 1, 2020), after which the standard ESA rules will once again apply.
In the announcement, Monte McNaughton, Minister of Labour, Training and Skills Development, explained, “The cost of termination and severance pay can make it impossible for a business to survive and reopen. That’s why we acted to make sure businesses survive, and workers have jobs to come back to.”
This is a laudable goal. Concerns, however, have been raised about the effect of the regulation and extension on employer action and employee rights.
Termination and severance pay are an entitlement under both the ESA and the common law. The characterization of it as a detriment to businesses and the economy is a worrying statement to come from the Minister. Especially so at a time when so many people are concerned about the safety of their employment.
Termination and severance pay are based on the concept of reasonable notice. An employer only has three choices when terminating an employee without cause.
An employer can provide an employee with written notice that their job is being terminated in advance, and the employment will end on that specified date. The employer cannot make any change to the employee’s rate of pay, benefits, entitlements, or any other term of employment. This is working notice.
Alternatively, an employer can provide an employee with the equivalent of the wages they would have earned during that working notice period. This includes benefits and all the entitlements they would have received if still working, such as pension contributions. This allows an employer to end the relationship on the same day. This is known as pay in lieu of notice.
Finally, an employer can opt to use a combination of the two above options, provided that the sum of both passes the mandatory threshold under the ESA.
The standard amount of notice under the ESA is prescribed in s. 57, based on the length of employment. There are also additional notice amounts for specific scenarios. Most employees are also entitled to notice under the common law, which tends to be much higher as it is much more nuanced to the employee’s situation and reality of losing their job. As such, common law notice is based on numerous factors, such as the length of employment, age of the employee, type of employment, and the availability of other substantially similar employment to an employee. These factors show the underlying purpose is to provide the employee with enough income to sustain them until they can find alternative employment.
The concept of mitigation ties into this, as an employee will have to show they were engaged in an active job search during that period. If they do find employment, the amount of severance can be reduced.
At all times, both an employee and employer have a duty to act in good faith regarding the employment relationship. When an employer has a layoff, those employees are still employed by the employer. A layoff is defined as a reduction in or elimination of hours of work or wages. It is not a suspension or termination of the employment contract. During the process of recalling an employee, or increasing their hours of work, an employer must act in good faith. Examples of violating this duty include the following.
- If an employer has hired a new employee to fulfill the laid-off employee’s duties, even partially, the layoff is no longer due to “reasons related to the designated infectious disease” and was not done in good faith.
- If an employer is discriminating in their process of recalling employees, it is not acting in good faith. Not bringing an employee who is willing and able to work back due to factors such as age, gender, race, disability, or any of the other protected grounds in the Human Rights Code (OHRC) is contrary to an employer’s legal duties.
- An employer cannot decide to delay recalling an employee due to past or current complaints under the OHRC, the ESA, or the Occupational Health and Safety Act. That would be an illegal act of retribution.
It is worth keeping in mind that the suspension of the layoff provisions is only for reasons related to Covid-19. While it may seem that would include almost anything, due to the monumental impact it has had on society, that presumption can be challenged based on many factors.
When a layoff occurs where there is not a valid, signed employment contract which warned an employee of the risk of layoffs at the start of employment, that in itself is a constructive dismissal. While O. Reg 228/20 also contains provisions about constructive dismissal relating to Covid-19 and layoffs, constructive dismissal is much more complicated than the automatic termination clause of s. 56 (c) of the ESA.
If you have concerns about the reduction of your hours or pay due to Covid-19, or how your employer is conducting their recalls of employees, we invite you to contact us at De Bousquet PC if you require assistance in this matter.