Protecting jobs by helping businesses avoid costly payouts and closures
TORONTO – The Ontario government is helping protect jobs and businesses by extending protection to prevent temporary layoffs from automatically becoming permanent job losses. Although Ontario is now in Phase 3 of reopening, this extension will give businesses more time to reopen and return to full operations. This extension will last until January 2, 2021.
Under Ontario labour laws, termination of an employee after 13 weeks of being temporarily laid off triggers costly payouts which, for many businesses, could be the difference between survival and closure. This regulatory amendment delays these terminations and severance liabilities.
“As our government continues to take the necessary steps to safely reopen the economy, we need to protect the businesses and employees impacted by COVID-19.,” said Monte McNaughton, Minister of Labour, Training and Skills Development. “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.”
- Termination and severance obligations can create a significant financial burden for business. For example, a restaurant with 30 employees could be liable for termination payments as high as $100,000.
- This measure does not apply to employees represented by a trade union. The government encourages parties in collective bargaining relationships to work together to resolve workplace issues.
- Ontario’s unemployment rate in July was 11.3%.
- Employees at businesses that have fully reopened continue to have job protection through the Infectious Disease Emergency Leave if they need to stay home to isolate or quarantine or take care of a loved one due to COVID-19. This includes parents who decide not to send their children back to school due to concerns about COVID-19.
- Learn about O. Reg. 228/20 under the Employment Standards Act, 2000 to extend protection from temporary layoffs.
- Learn 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