May 30th, 2020

Deemed COVID-19 Emergency Leave of Absence, Not Constructive Dismissal

March and April 2020 saw massive workforce reductions and layoffs as a result of the catastrophic COVID-19 pandemic throughout Canada, including in Ontario. A heated debate in employment law was whether such reductions and layoffs amounted to the constructive dismissal of employees' employment.

The Ontario government has taken a stance, and said "No".

On March 19, 2020 the Ontario government amended the Ontario Employment Standards Act ("ESA") allowing employees to take a COVID-19 specific emergency leave of absence. On May 29, 2020, the Ontario government filed O.Reg.288/20 - Infectious Disease Emergency Leave, which supplements those amendments.

Together, the amendments deem the employees who have had abrupt wage reductions or eliminations during COVID-19 to be on an infectious disease emergency leave of absence ("ELA"), and not constructively dismissed.

In effect, the Regulation seems to provide employees who are off work due to COVID-19 with increased job-protection. On the flip side, it also provides employers with greater protection against claims of wrongful or constructive dismissal arising from COVID-19 related cutbacks.

Below we discuss these amendments, the protections they provide, and what next?


Employees Deemed to be on Infectious Disease Emergency Leave of Absence:

O. Reg. 288/20 deems an employee to be on an ELA if they do not perform duties of their job because their hours of work are reduced or eliminated during the "COVID-19 period".


COVID-19 Period:

The COVID-19 period is defined as the period spanning from March 1, 2020 to six weeks after the declaration of emergency in Ontario is terminated. For employees who were exposed to, sick with or quarantined because of COVID-10, their entitlement is deemed to have started earlier, on January 25, 2020.


Deemed not Layoff:

An employee whose hours are temporarily reduced or eliminated during the COVID-19 Period are deemed not to be a lay off unless:

  • the employer laid off due to a permanent discontinuance of business; or
  • the layoff exceeded weeks in a 52 consecutive week period. before May 29, 2020.

Deemed not Constructive Dismissal:

Similarly, an employee's whose hours are temporarily reduced or eliminated, or wages temporarily reduced or eliminated, during the COVID-19 Period are deemed not be constructive dismissed unless the employer constructively dismissed the employee and the employee subsequently resigned prior to May 29, 2020.

S. 9 of the Regulation defines a reduction of wages as including anything less than the employee's regular wages.


Entitlements during Leave:

While on an ELA, an employee is entitled to all of the general protections extended to employees on leave under the ESA. This includes the right to be re-instated to their previous position at the end of the ELA, the right to have the period included in calculating length of employment, and the provisions regarding calculating vacation.

Unlike other leaves, however, the employee is not entitled to have their benefit plan coverage continued during the ELA, unless their employer had continued coverage until May 29, 2020.

Employees may keep any benefits or payments that were already provided by the employer prior to May 29, 2020.


Exception - Termination between March 1, 2020 and May 29, 2020:

To prevent misuse of these regulations, an employee is not deemed to be on an ELA in two circumstances.

If, on or after March 1, 2020,

  • the employer directly terminates the employee's employment;
  • the employer laying the employee off because of a permanent discontinuance of all of the employer's business at an establishment; or
  • the employer giving notice of termination and employee subsequently resigning during the notice period;

the employee is not deemed to be on an ELA.

If before May 29, 2020,

  • the employer directly terminates the employee's employment;
  • the employer constructively dismissing the employee and the employee subsequently resigning within a reasonable period; or
  • the employer laying off the employee for period longer than temporary lay-off or more than 32 weeks in 52 consecutive weeks;

the employee is not deemed to be on an ELA.

However, if an employee was provided with notice of termination, the employer and employee can instead consent to the withdrawal of the notice of termination. In that case, the employee would be deemed to be on an ELA.


Complaints to the Ministry:

All complaints to the Ministry regarding temporary reductions in work hours or wages due to COVID-19 will be deemed to have not been filed. This is subject to exceptions. If an employee has legitimately been terminated from employment, their complaint will not be automatically dismissed.


Key Takeaways:

The Regulation seems to provide both employers and employees greater protection during this catastrophic pandemic. Employees who are off work due to COVID-19 have increased job-protection. Employers who genuinely had to cut back their workforce due to COVID-19 are similarly afforded with greater protection against claims of wrongful or constructive dismissal arising from COVID-19 related cutbacks. Is that going to be true?


Next Questions:

The amendments open up many new questions and unknowns, including:

- Will employees be guaranteed job reinstatement following the end of the COVID-19 Period?

- What if employers can't rebound? Can employees who have been on an ELA still be placed on a layoff or be terminated without cause?


The employment standards amendments significantly rock Ontario employment law, both for the COVID-19 Period and thereafter. It is important that employers and employees alike take the time to familiarize themselves with the new Regulation, and carefully consider the ripple effects to employment rights and obligations. If you have any questions with respect to the new O.Reg 288/02, and its impact, Lee Workplace Law would be happy to help.


**Written with the assistance of Hannah Goranson