This is the eighth entry into Wong Employment Law’s recurring series of frequently asked questions about COVID-19. Now that Toronto and most of Ontario is entering stage 2 of the province’s reopening plan, many questions have again come up regarding layoffs and recalls to work.
New Layoff Law
On May 29, 2020, Ontario introduced a new regulation to the Employment Standards Act (ESA). For the most part, this regulation provides that employees who have been laid off due to COVID-19 are now deemed to be on a job-protected leave called the Infectious Disease Emergency Leave.
What’s important to know is that employees on this new Leave cannot and will not be deemed to be terminated or constructively dismissed. Previously, employees who were laid off for more than 12 weeks (or 35 weeks if benefits or payments have continued) would be deemed to be terminated. This new Leave means that this does not apply anymore.
While employees laid off due to COVID-19 will not be considered constructively dismissed under the ESA, it is unclear whether they will be considered constructively dismissed under the common law. Pre-COVID-19 cases in Ontario have suggested that layoffs are not allowed under the common law, and that a layoff would be a constructive dismissal triggering a severance package. However, while the ESA expressly permits layoffs, courts (pre-COVID-19) have stated that the common law trumped the ESA layoff rule, still allowing employees to collect a severance package. With the new ESA regulation, only time will tell whether this type of analysis will apply to the new Infectious Disease Emergency Leave.
What we can tell at this point is that this new Leave is beneficial for employers who are uncertain about how their business will recover. Without this new leave, employers would have had to pay substantial severance packages to employees who they could not recall back to work. On the other hand, this new Leave can be seen as detrimental to employees as laid off employees could be left in limbo for quite some time, as they would be unable to collect a severance package in the normal course.
Refusing Recall to Work
Despite the gradual reopening of Ontario, many employers and employees are unsure of their obligations about returning to work. To briefly reiterate a previous FAQ, employers have discretion in determining when and where an employee should work. This includes ordering an employee to return to the office even if the employee wants to work from home. Further, employers do not need to consider the fact an employee wants to collect the Canada Emergency Response Benefit (CERB), or an employee’s obligation to repay back CERB when they return to work.
If an employee refuses to work without a legitimate reason, an employer can treat this refusal as an abandonment or resignation of employment. In an abandonment or resignation, an employee is not entitled to severance.
What constitutes a legitimate reason for refusing work?
Any reason that is protected under the law, including the ESA or the Ontario Human Rights Code. Some examples include:
if an employee is under quarantine.
if an employee is taking care of a family member who is affected by COVID-19.
For some legitimate reasons to refuse work, the employee will be allowed to take an unpaid leave.
For reasons under the Ontario Human Rights Code that require accommodation, an employer may not be allowed to simply have the employee take an unpaid leave. In some situations, an employer may be required to have an employee work from home, or with minimal contact from customers or coworkers.
Jason Wong is a Toronto Employment Lawyer practicing exclusively employment, labour, and human rights law. If you are an employee or employer who has questions about layoffs and recalls during COVID-19, please contact Jason at jason@wongemploymentlaw.com or 647-242-5961.