See these other posts for more COVID-19 Employment Law information:
»» Webinar & Slide presentation: COVID-19 Ontario Workplace Issues: March 16
»» EI Sickness Benefits and Work Sharing: March 17
»» New Emergency Care Benefits and Supports: March 18
»» Amendment to Ontario Employment Standards: March 21
»» Supplementary Unemployment Benefit Plan (SUB Plan): March 21
»» Mobilizing Canadian Industry to Fight COVID-19: March 23
»» List of Ontario essential workplaces: March 24
»» COVID-19 Emergency Response Act March 26
»» Canada Emergency Wage Subsidy March 30
As COVID-19 continues to have an impact on all of our lives, I know that you are concerned about your business and also about the wellbeing of your employees in the face of unprecedented circumstances.
Temporary layoffs of employees is one of the options you may be considering for your company to help cope with uncertain circumstances.
In the notes below I have outlined the key legal considerations when dealing with temporary layoffs.
You may also have heard of changes to the Employment Insurance Sickness Benefits and the federal Work-Sharing program. I will be sending you information about these programs in another email later today. In the meantime, you may find it helpful to visit the Employment Canada COVID-19 information on this page: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
I hope you find this guidance and information helpful and as always, I am available to answer any questions you may have about Temporary Layoffs or any other employment matter.
What is a Temporary Layoff?
Generally, a layoff is a period when an employer temporarily ceases to provide work and (in most cases) compensation to an employee.
Parties treat the employment relationship as ongoing, with the understanding that work and compensation may resume in the future.
In Ontario, a layoff week is a week where the employee earns less than one half of the amount that they would earn at their regular rate in a regular week or their average earnings for the period of 12 consecutive weeks prior to the layoff period.
Length of a Temporary Layoff
Temporary layoffs are just that – temporary, and indications at this time are that layoffs necessitated by COVID-19 will fit into this criteria. If they do exceed the statutory limit, then an employer will generally be deemed to have terminated an employee’s employment unless an exception applies.
Key statutory time limits are as follows:
- Temporary layoffs cannot exceed (a) 13 weeks in any period of 20 consecutive weeks, or (b) more than 13 weeks in any period of 20 consecutive weeks but less than 35 weeks in any period of 52 weeks where:
- the employee continues to receive substantial payments from the employer, or
- the employer continues to make payments for benefits or a legitimate retirement or pension plan, or
- the employee receives supplementary unemployment benefits, or
- the employee would be entitled to supplementary unemployment benefits but isn’t receiving them because they are employed elsewhere, or
- the employer recalls the employee within a time frame approved by the Director of Employment Standards or as set out in an agreement with an employee not represented by a trade union, or where the employee is represented, as set out in an agreement with the trade union.
NOTE: You may be exploring the options of reduced business hours that do not meet these legal requirements for a Temporary Layoff. If you are considering options such as this, I encourage you to contact me to ensure that legal requirements and obligations will be met.
Advance Notice Requirements
There are no advance statutory notice requirements before an employee can be placed on a temporary layoff.
Payment of Employees while on Temporary Layoff
- Subject to an employment agreement, policy or collective agreement that says otherwise, layoff periods are generally unpaid.
- Employees may also, on a voluntary basis, use their vacation time during a period of a temporary layoff to continue to receive pay.
- Employees on temporary layoff are eligible for Employment Insurance.
Click here for a downloadable template that you can adapt for use when notifying employees of a temporary layoff.
As mentioned earlier, if you are considering the use of vacation time or other options that fall outside the definition of Temporary Layoffs, I encourage you to contact me to ensure that legal requirements and obligations will be met and that you are not open to any future liability.
Are Employers Required to Continue Benefit or Pension Contributions?
In most cases, absent contractual terms to the contrary, employers are not required by statute to continue benefits or pension plan contributions during temporary layoffs.
This may vary depending on the terms of employment, including applicable employment contracts, collective agreements, employer policies and third-party plans. Please contact me if you have questions about your specific circumstances.
Although it is not required that benefits be continued, I generally recommend that employers consider continuing benefits for the period of the temporary layoff and do so as long as the employee makes his/her co-payment if there is one.
If the employer makes benefits and pension contributions to the laid-off employees, the allotted time for a temporary layoff may be extended. However, the employee must agree to these payments in lieu of a firm limit on the length of the layoff. Again, please contact me if you require further information about the specifics of your circumstances
Where an employment agreement, workplace policy or collective agreement provides for a greater right to benefit or pension continuance, those contractual terms will prevail.
Do Obligations Change Depending on Number of Employees Temporarily Laid Off?
In Ontario there are no mass or group termination considerations for temporary layoffs, however, should the layoffs extend beyond the allotted time mass termination entitlements may apply.
What Else Should Employers Know?
A Record of Employment must be issued for each of the employees that are on a temporary layoff to enable the employee to receive Employment Insurance benefits.
Click here for a downloadable template that you can adapt for use when notifying employees of a temporary layoff.
Employers are encouraged to provide timely, transparent and ongoing communications to their employees in respect of any temporary layoffs, including with respect to any anticipated recall dates or extensions to the layoff period.
Employers will want to ensure that they have up to date contact information for each affected employee so that communications are effective.
Where temporary layoffs are not otherwise expressly permitted by contract or collective agreement, a layoff may result in the risk of constructive dismissal claims or grievances, even if intended to be temporary.
As you are well aware, many things are changing rapidly in every aspect of our business and personal lives. I will keep you informed of all changes related to Employment and Labour Law and am available to answer any questions that you may have.
I remind and encourage you to observe the recommendations outlined by our public health authorities and hope that you, your employees, families and loved ones stay safe and healthy.
You may find these online resources helpful in keeping up to date with the COVID-19 situations in Toronto, Ontario and Canada:
Toronto: https://www.toronto.ca/home/covid-19/
Ontario: https://www.ontario.ca/page/2019-novel-coronavirus
Canada: https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection.html