New Regulation will protect employees from permanent layoffs and businesses from potential closures
TORONTO – The Ontario government is taking steps to help ensure that as the economy gradually and safely reopens workers will have jobs to return to and businesses will be protected from incurring unsustainable termination costs. Today, the government announced that it has enacted a new regulatory amendment that will put non-unionized employees on Infectious Disease Emergency Leave during the COVID-19 outbreak any time their hours of work are temporarily reduced by their employer due to COVID-19. This will ensure businesses aren’t forced to terminate employees after their ESA temporary layoff periods have expired.
Terminations triggered when temporary layoffs exceed the permitted length under the Employment Standards Act can result in costly payouts which, for many businesses, could be the difference between survival and closure. Under the new regulatory change to the Employment Standards Act, non-unionized employees who have had their hours reduced or eliminated because of the pandemic will be deemed to be on Infectious Disease Emergency Leave. Workers will remain employed with legal protections and be eligible for federal emergency income support programs.
“As we take the necessary steps to safely and gradually restart the economy, we need to make sure business owners can reopen their doors and workers have jobs to go back to,” said Monte McNaughton, Minister of Labour, Training & Skills Development. “This regulatory change will protect businesses from being forced to permanently lay off their employees due to COVID-19 and suffer a financial loss that could shutter their operations for good.”
Many businesses had to close or reduce operations to comply with emergency orders necessary to stop the spread of COVID-19. According to Statistics Canada, 379,000 Ontario workers were temporarily laid off in April 2020, an increase of 2,496 per cent compared with one year earlier.
The regulatory amendment applies retroactively to March 1, 2020 and will expire six weeks after the declared emergency ends. The regulatory amendments do not include employees represented by a trade union.
The government is also supporting people and businesses by providing billions of dollars in deferrals and relief. That includes deferring $1.9 billion in Workplace Safety and Insurance Board premium payments until August 31, 2020, $10 billion in interest and penalty relief, and other deferrals to improve cash flow, protect jobs and help household budgets. In addition, the province is partnering with the federal government to provide commercial rent relief for commercial tenants and landlords through the Canada Emergency Commercial Rent Assistance (CECRA) program.
- The Financial Accountability Office of Ontario estimates that about 2.2 million Ontario employees were directly affected by pandemic-related shutdowns, through either job losses (1.1 million), temporary layoffs or sharply reduced hours (1.1 million) in 2020.
- Termination and severance obligations create a significant financial burden for businesses. For example, a restaurant with 30 staff could be liable for termination payments as high as $100,000.
- O. Reg. 228/20 under the Employment Standards Act, 2000
- Learn About how the Government is Supporting People, Businesses and Families during COVID-19
- Ontario Helping Businesses Overcome the Unique Challenges Created by COVID-19
- Ontario’s Action Plan: Responding to COVID 19
- Resources to Prevent COVID-19 in the Workplace
“Ontario’s small to medium manufacturers need this change to pre-empt unnecessary and significant business costs that will inevitably lead to numerous bankruptcies.”
“In addition to the lost livelihoods of business owners and workers, the closures and job losses we would endure without any changes would have a further devastating impact on Ontario’s economy. We appreciate the actions the government has taken today to preserve jobs and keep businesses alive.”
“We thank Minister McNaughton for recognizing that the COVID-19 pandemic has placed employers in an extremely vulnerable position under current employment law. Without this important change, many businesses would have been forced to pay significant termination sums when they are financially strapped due to forced shutdowns, jeopardizing their ability to make it to the other side of COVID-19.”