The severity of the Covid-19 pandemic has exerted a huge impact on the Canadian economy, forcing employers to scale down their business and reduce operational costs. Therefore, lots of employees are terminated, laid off or put on a temporary layoff by the employer. In this blog, we attempt to answer some common questions in regard to these issues.

FAQ about Layoff, Temporary Layoff and Termination During

Q: Can my employer lay me off temporarily due to the Covid-19?

You could be temporarily laid off by your employer only if the employment contract has specifically addressed this possibility and you have agreed to this term. Absent such a term, you may have a claim for constructive dismissal on the basis that you are laid off without an agreement to allow your employer to specifically do so.

A constructive dismissal is where an employer makes a substantial change to the terms of an employee’s employment without the employee’s consent or demonstrates an intention to no longer be bound by the terms of the employment contract so that the employee has the option of treating his or her employment as having been terminated.

It is important to note that as of March 21, 2020, employees cannot claim constructive dismissal based on the Employment Standards Act (“ESA”) for temporary cuts to their pay or hours of work because of COVID-19, according to Regulation 228/20 issued by the Ontario government on March 29, 2020. These employees are deemed to be on “emergency leave”. On December 17, 2020, the Ontario Government amended Regulation 228/20 by extending the “COVID-19 Period” to July 3, 2021. In other words, employees who experience a temporary layoff due to COVID-19 will be on a deemed emergency leave until July 3, 2021.

Since the Regulation only deals with constrictive dismissal claims under the Employment Standards Act but not the common law, it may not necessarily bar employees from bringing common law constructive dismissal claims to the court. If you are experiencing constructive dismissal issues in connection to your temporary layoff, it is advisable to seek legal advice from an experienced employment lawyer.

Q: If I agree to have a temporary layoff during the Covid-19, does that mean my employer can lay me off again in the future?

If you agree to a temporary layoff without a contract term allowing the employer to specifically do so, you should make it clear in writing to your employer that you are doing so only in response to this specific situation. You must confirm that you are not agreeing to have a layoff as a term of your employment contract.

In this way, once your employer puts you on a temporary layoff again in future after recalling you back to work from this Covid-19 related layoff, you can refuse to accept this. You can consider the layoff as a constructive dismissal and claim a severance package from your employer.

Q: Can I get any severance pay if I am terminated by my employer during the Covid-19 pandemic?

It depends on your specific fact scenarios.

Termination Without Cause

In Ontario, an employer is entitled to terminate any employee at any time for any reason that is not discriminatory. However, it must provide notice or pay in lieu of notice of termination. This is what we call termination without cause. Examples of termination without cause due to the Covid-19 includes, inter alia, lack of work, reorganization, redundancy of work force.

If you are terminated without case, you are entitled to termination/severance pay determined by either your Employment Standards Act (“ESA”) minimums or common law reasonable notice. In most cases, a terminated employee could receive a much greater severance package under common law than the minimum standards under the ESA. Common law severance pay is available to any employee, as long as they are not terminated for just cause and as long as they are not subject to a valid termination clause that replaces the common law entitlements.

The common law severance package that an employer should pay to a terminated employee depends on a number of factors. Relevant factors include, inter alia, length of service, age, salary, the position the employee held within the company, whether the employee was actively recruited and the general economy. There is no easy calculation to determine the amount of severance that an employee will receive at common law. Therefore, it is advisable to consult an experienced employment lawyer about this.

Termination for Cause

In the case of termination for cause, it means that an employer may not have to provide with an employee with common law severance.

It is a high bar to terminate someone with cause. Generally, there must be some serious misconduct that harms the employment relationship, such as theft, violence, fraud rising to the level of gross misconduct. The reason for the high bar is that in the event of willful misconduct, an employee will not receive any termination or severance pay.

If you are an employee who has been fired for cause, you should absolutely reach out to a lawyer to review the circumstances of your dismissal.  You may have a case for wrongful dismissal.

Q: Can I refuse to return if I am recalled back to work after a temporary layoff?

When you are recalled back to work after a temporary layoff, it is expected that you should return to work unless you have a legitimate ground to refuse so.

For example, if you refuse to return because of your illness or childcare responsibilities arising from school closures, you have the right to do so. Your employer has an obligation to accommodate you. Any failure would amount to a breach of the prohibited grounds under the Ontario Human Rights Code.

Employers also have an obligation to provide a safe work environment free from dangers under the Occupational Health and Safety Act. If you refuse to return to work because of work health and safety concerns such as lack of Personal Protection Equipment (PPE), you are also entitled to say no to your employer.

However, if you simply refuse to return to work without any legitimate reasons, your employer could treat your refusal to return to work as a resignation. In that case, you will not be able to claim any termination or severance pay.

Employment issues in relation to layoff, temporary layoff or termination can be quite complicated. It is advisable to seek professional help from an experienced employment lawyer. If you are experiencing any employment law issues due to the Covid-19, Top Toronto employment lawyer, Stacey ball can help you determine your legal options. Please call us at 416-921-7997, extension 227.

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