Temporary ESA rules no longer in effect

In response to the COVID-19 pandemic, the Ontario government made a regulation that changed certain Employment Standards Act (ESA) rules during the COVID-19 period. The temporary rules ended on July 30, 2022. We are in the process of updating this chapter with more detailed information. Please continue to check this guide for more information in the coming days.

Overview

On May 29, 2020, the government made a regulation under the Employment Standards Act, 2000 (ESA) in response to COVID‑19. The rules in the regulation apply during the COVID‑19 period which is from March 1, 2020 to July 30, 2022.

During the COVID‑19 period, a non-unionized employee is “deemed” (or considered to be) on a job-protected unpaid infectious disease emergency leave if their employer has temporarily reduced or eliminated their hours of work because of COVID‑19.

During the COVID-19 period, March 1, 2020 to July 30, 2022:

  • A non-unionized employee whose employer has temporarily reduced or temporarily eliminated their hours of work for reasons related to COVID-19 is deemed to be on a job-protected unpaid infectious disease emergency leave.
  • A non-unionized employee is not considered to be laid off if their employer temporarily reduces or temporarily eliminates their hours of work or wages for reasons related to COVID-19.
  • A non-unionized employee is not considered to be constructively dismissed under the ESA if their employer temporarily reduces or temporarily eliminates their hours of work or wages for reasons related to COVID‑19.

Beginning on July 31, 2022:

  • Employees will no longer be deemed to be on unpaid infectious disease emergency leave
  • The ESAs regular rules around constructive dismissal will resume. This means a significant reduction or elimination of an employee’s hours of work or wages may be considered  a constructive dismissal under the ESA, even if it was done for reasons related to COVID‑19.
  • The ESAs regular rules around temporary layoff will also resume. For practical purposes, an employee’s temporary layoff clock re-sets on July 31, 2022.

Even though the COVID‑19 period ends on July 30, 2022 and non-unionized employees will no longer be deemed to be on unpaid infectious disease emergency leave, when the conditions are met, unionized and non-unionized employees may continue to be eligible for unpaid and, where applicable, paid infectious disease emergency leave leave if they are not performing the duties of their position for certain reasons related to COVID-19. Note that paid infectious disease emergency leave is available until March 31, 2023.

Learn about the differences between an employee taking infectious disease emergency leave and an employee being deemed to be on unpaid infectious disease emergency leave.

The regulation also affects the ESA rules around:

In addition, the regulation establishes that certain employment standards claims that are filed with the Ministry of Labour, Immigration, Training and Skills Development in relation to these rules are deemed not to have been filed.

Deemed unpaid infectious disease emergency leave

During the COVID‑19 period (March 1, 2020 – July 30, 2022), non-unionized employees are deemed to be on unpaid infectious disease emergency leave when they are not performing the duties of their position because their employer temporarily reduced or temporarily eliminated their hours of work for reasons related in whole, or in part, to COVID‑19.

An employee is only deemed to be on this leave for the work hours that were temporarily reduced or eliminated by the employer. In other words, employees do not have a right to this leave and to not attend work during hours the employer does schedule them to work, solely because the employer has otherwise temporarily reduced the employee’s hours.

Most of the rules that apply to an employee on unpaid infectious disease emergency leave also apply to employees on this deemed leave. However, there are some differences, which are described below.

Even though an employee is deemed to be on unpaid infectious disease emergency leave under this regulation, they may qualify for, and take, unpaid infectious disease emergency leave under one of the other conditions set out in the ESA that qualify an employee for the leave (see infectious disease emergency leave for information). Similarly, the employee in this situation may take any other leave under the ESA.

An employee who is deemed to be on unpaid infectious disease emergency leave is exempt from the notice of leave requirements in the ESA. Since it is the employer’s action (reducing or eliminating the employee’s hours of work) that brings about the deemed leave, the employee does not need to notify their employer of the leave.

Exceptions

The following employees are not deemed to be on an unpaid infectious disease emergency leave, even if they meet the qualifying criteria.

Employees are not deemed to be on an unpaid infectious disease emergency leave if:

  • they received written notice of termination in accordance with the ESA. In this situation they are not deemed to be on an unpaid infectious disease emergency leave during the notice period. If, however, the employer and employee agree to withdraw the notice of termination, the employee may be deemed to be on unpaid infectious disease emergency leave starting from the date the notice of termination was withdrawn (if the qualifying criteria for being deemed to be on leave after the date of the withdrawal are met)
  • they were let go or dismissed from their employment for reasons unrelated to a constructive dismissal or a layoff longer than the period of temporary layoff
  • their employment was terminated or severed as the result of a temporary layoff longer than the period of temporary layoff, or as the result of a constructive dismissal, where the termination occurred prior to May 29, 2020

Rights during a deemed unpaid infectious disease emergency leave

The rights that apply to an unpaid infectious disease emergency leave also generally apply to a deemed leave. This includes the right to:  

  • reinstatement
  • be free from penalty
  • earn credits for length of employment, length of service and seniority

Benefit plans

The rights relating to participation in benefits plans are different in the context of a deemed leave. Employees deemed to be on unpaid infectious disease emergency leave are exempt from the ESA entitlement to continue participating in certain benefit plans in specific circumstances.

If an employee stopped participating in a benefit plan (including pension, life insurance, accidental death, extended health and dental plans) as of May 29, 2020, they do not have a right under the ESA to continue to participate in that particular benefit plan while on the deemed leave.

Similarly, if an employer  had discontinued its contributions to a particular benefit plan before May 29, 2020, the employer is exempt from the ESA requirement to continue making its employer contributions to that particular benefit plan while the employee is on a deemed leave.

Any payments or benefits an employee received from an employer between March 1, 2020 and May 29, 2020 are unaffected by the deemed leave.

Temporary layoff

During the COVID‑19 period (March 1, 2020 – July 30, 2022), non-unionized employees are not considered to be laid off under the ESA if they are not performing the duties of their position because their wages or hours of work have been temporarily reduced or temporarily eliminated by their employer for reasons related in whole or in part to COVID‑19.

Where these conditions are met, the layoff clock for the employee is “frozen” during that time. This prevents a termination or severance of employment from happening by way of a layoff exceeding the length of a temporary layoff under the ESA.

For information on each of the conditions that must be met for this temporary layoff “freeze” to apply, please see Conditions for O. Reg. 228/20 temporary layoff and constructive dismissal rules to apply.

Note that where these conditions are met with respect to the non-unionized employee’s hours of work, the employee is also deemed to be on a job-protected unpaid infectious disease emergency leave during the time the employee is not performing their duties because of the reduction or elimination in hours.

The regulation has no impact on a termination or a severance that occurred prior to May 29, 2020 (the date the regulation was filed) resulting from the employee being laid off for a period longer than a temporary layoff.

All other ESA rules, such as minimum wage requirements, continue to apply as usual.

Constructive dismissal

Learn more about constructive dismissal.

Ontario Regulation 228/20 establishes that there is no constructive dismissal under the ESA where a non-unionized employee’s wages or hours of work are temporarily reduced or temporarily eliminated by their employer for reasons related to COVID‑19 from March 1, 2020 to July 30, 2022. This rule does not apply where the termination or severance resulted from a constructive dismissal that occurred before May 29, 2020. For a termination or severance resulting from a constructive dismissal to have occurred before May 29, 2020, it means the employee must have been constructively dismissed and quit their employment within a reasonable timeframe, all prior to May 29, 2020.

For a discussion of each of the conditions that must be met in order for this rule to apply, please see Conditions for O. Reg. 228/20 temporary layoff and constructive dismissal rules to apply.

These rules affect only what constitutes a constructive dismissal under the ESA. These rules do not address what constitutes a constructive dismissal at common law.

Note that where these conditions are met with respect to the non-unionized employee’s hours of work, the employee is deemed to be on a job-protected unpaid infectious disease emergency leave during the time the employee is not performing their duties because of the reduction or elimination in hours.

All other ESA rules, such as minimum wage requirements, continue to apply as usual.

Conditions for O. Reg. 228/20 deemed leave, temporary layoff and constructive dismissal rules to apply

For an employee to be deemed to be on unpaid infectious disease emergency leave and/or for the rules that modify temporary layoff and constructive dismissal under the ESA to apply, the following five conditions must all be met:

1. The employee is not represented by a trade union

The deemed leave and rules on temporary layoff and constructive dismissal that result from O. Reg. 228/20 do not apply to employees who are unionized, regardless of whether the employees are covered by a collective agreement. (Note that unpaid (and, where applicable, paid) infectious disease emergency leave itself does apply to employees who are unionized.)

2. The employee is subject to a temporary reduction or elimination in hours of work and/or wages

The employee must be subject to one or more of the following in order to be deemed to be on unpaid infectious disease emergency leave:

  • a temporary reduction in hours of work
  • a temporary elimination of hours of work

The employee must be subject to one or more of the following for the rules that modify temporary layoff and constructive dismissal under the ESA to apply:

  • a temporary reduction in hours of work
  • a temporary reduction in wages
  • a temporary elimination of hours of work
  • a temporary elimination of wages

The regulation sets out formulas to be used in determining whether the employee’s hours of work and/or wages have been reduced for the purposes of the regulation. Learn more about reduction in hours of work and/or wages.

This condition is only met where the reduction or elimination is temporary. The condition is not met if the reduction or elimination is a permanent change.

3. It must be the employer that temporarily reduces or eliminates the employee’s hours of work and/or wages

The temporary reduction or elimination of the employee’s hours of work must be initiated by the employer. In other words, the reduction or elimination in hours of work and/or wages cannot be caused by the employee. For example, if the employee is away from work because the employee elected to take a leave of absence, such as sick leave, family responsibility leave etc. or requested personal time away from work -- this condition is not met.

4. The temporary reduction or elimination of the employee’s hours of work and/or wages must have occurred for reasons related to COVID-19

This condition is met where the employer’s decision to temporarily reduce or temporarily eliminate an employee’s hours of work and/or wages is made for reasons related to COVID-19.

In some cases, there will be more than one reason an employer temporarily reduces or temporarily eliminates an employee’s hours and/or wages. As long as one of the reasons is related to COVID-19, this condition is met. The reason for the reduction or elimination can be directly or indirectly related to COVID-19.

Examples of reasons related to COVID-19 include:

  • an employer’s business or part of a business was ordered to suspend operations by an emergency order under the Emergency Management and Civil Protection Act or an order under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020
  • a brewer reduced its employees’ hours because the demand for beer decreased since restaurants and pubs had been ordered to close temporarily pursuant to an emergency order
  • a private children’s bus service eliminated all of its employees’ hours because schools are closed as a result of COVID-19

5. The above four conditions must occur during the defined COVID-19 period

The COVID-19 period runs from March 1, 2020 to to July 30, 2022. The deemed leave and the modified rules in respect of temporary layoff and constructive dismissal that apply as a result of O. Reg. 228/20 apply only when the four conditions above all occur during the defined COVID-19 period.

For example, Felix’s hours of work were temporarily reduced by his employer for reasons related to COVID-19 beginning on February 23, 2020 and ending on June 1, 2020.

The deemed unpaid infectious disease emergency leave applies only to the period of time from March 1, 2020 (the beginning of the COVID-19 period) to June 1, 2020 (the last day of the work week in which Felix experienced a reduction in hours of work). The deemed leave does not apply to the reduction in hours of work that occurred before March 1, 2020 (that is, from February 23, 2020 to February 29, 2020).

Reduction in hours of work or wages

The deemed unpaid infectious disease emergency leave rules in the regulation apply only when a non-unionized employee’s hours of work are temporarily reduced or temporarily eliminated by the employer for reasons related, in whole or in part, to COVID-19 between March 1, 2020 and to July 30, 2022.

The special rules in the regulation regarding temporary layoff and constructive dismissal apply when a non-unionized employee’s wages or hours of work are temporarily reduced or temporarily eliminated by their employer for reasons related, in whole or in part, to COVID-19 between March 1, 2020 and to July 30, 2022.

This section describes how to determine whether an employee’s hours of work and/or wages have been reduced for the purposes of the regulation.

As a first step, it must be determined which of the following three categories the employee falls into:

  • the employee has a regular work week
  • the employee does not have a regular work week
  • the employee was not employed during the entire work week that came directly before March 1, 2020 (regardless of whether the employee has a regular work week or not)

The formulas that apply to employees in each of these categories are set out below.

1. The employee has a regular work week:

  • The employee’s hours of work are considered to be reduced if the employee works fewer hours in the work week than they worked in the last regular work week before March 1, 2020.
  • The employee’s wages are considered to be reduced if the employee earns less regular wages in the work week than they did in the last regular work week before March 1, 2020.

This work week cannot be used for the formula if for any part of it, the employee was:

  • on vacation
  • not able to work
  • not available for work
  • subject to a disciplinary suspension
  • not provided with work because of a strike or lock-out at their place of employment or elsewhere

If any one of the above situations apply during any part of the last work week before March 1, 2020, it is necessary to continue to look back work week by work week to find the first work week in which none of the above situations apply. That work week becomes the comparator week.

Applying this formula

In order to determine what is the last regular work week before March 1, 2020, it is necessary to first establish the employee’s work week that includes March 1, 2020. From there, look back one full work week. This will be the last full work week prior to March 1, 2020.

Note that work week is defined in the ESA to mean: a recurring period of seven consecutive days selected by the employer for the purpose of scheduling work, or if the employer has not selected such a period, a recurring period of seven consecutive days beginning on Sunday and ending on Saturday.

If none of the scenarios set out above (for example, on vacation, not able to work, etc.) apply for any part of the work week, then this is the work week used in the comparison. However, if, during that work week, any of the scenarios set out apply for any period of time, then it is necessary to continue to look back work week by work week to find the first work week in which none of the scenarios are present. That week will become the comparator week.

Compare the hours worked or regular wages earned during the work week in question (i.e. the work week during the defined COVID‑19 period – March 1, 2020 to July 30, 2022) to the hours worked or regular wages earned during the comparator week If there is a reduction in hours and/or wages during the work week in question as compared to the comparator week, the employee is considered to have a reduction in their hours of work or wages for the purposes of the regulation.

When applying the formula with respect to a reduction in wages, note that regular wages does not include any overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, infectious disease emergency leave pay, termination pay, severance pay or termination of assignment pay payable to an employee.

For example, Claire is wondering if the modified rules with respect to temporary layoff apply to her during her work week from June 1, 2020 to June 7, 2020 and so she is seeking to determine if her hours of work were reduced for the purposes of the regulation.

Claire worked 28 hours during her last regular work week before March 1, 2020. However, during that week she was away sick for one day. Since Claire was not available for work for one day during that week, that work week cannot be used as her comparator week.

During the work week prior to that one, Claire worked for 35 hours. During that week, she was not on vacation, not unable to work, not unavailable for work, not subject to a disciplinary suspension nor was she not provided with work because of a strike or lockout. As such, this work week is to be used as her comparator week.

During her comparator work week, Claire worked 35 hours. During the June 1, 2020 to June 7, 2020 work week, Claire worked 15 hours. Since 15 hours is a reduction in hours as compared to her comparator week, Claire has had a reduction in her hours of work for the purposes of the regulation.

2. The employee does not have a regular work week:

  • The employee’s hours of work are considered to be reduced if the employee works fewer hours in the work week than the average number of hours they worked per work week in the 12 consecutive work weeks directly before March 1, 2020.
  • The employee’s wages are considered to be reduced if the employee earns less regular wages than the average amount of regular wages they earned per work week in the 12 consecutive work weeks directly before March 1, 2020.

Any work week in the 12-week period is excluded from the calculation if for any part of that work week the employee was:

  • on vacation
  • not able to work
  • not available for work
  • subject to a disciplinary suspension
  • not provided with work because of a strike or lock-out at their place of employment or elsewhere

Applying this formula

In order to find the period of 12 consecutive work weeks that preceded March 1, 2020, it is necessary to first establish the work week that includes March 1, 2020. From there, look back 12 full work weeks. Note that the work week is based on the employer’s work week and is not necessarily a calendar week.

Note that work week is defined in the ESA to mean: a recurring period of seven consecutive days selected by the employer for the purpose of scheduling work, or if the employer has not selected such a period, a recurring period of seven consecutive days beginning on Sunday and ending on Saturday.

Next, determine if during any of those 12 work weeks, any of the scenarios set out above (that is, not employed, on vacation, not able to work, etc.) applied for any period of time. If any of the scenarios applied during a work week, that work week is excluded from the averaging calculation; this means that the average is calculated over a period shorter than 12 weeks. For example, if the only scenarios that applied during the 12-week timeframe was that the employee was on vacation for one week, the average of the remaining 11 weeks would be calculated.

Compare the hours worked or regular wages earned during the work week in question (i.e. the work week during the defined COVID‑19 period – March 1, 2020 to July 30, 2022) to the average hours worked or average regular wages earned determined by applying the formula above. If there is a reduction in hours and/or wages during the work week in question as compared to the averaged amount, the employee is considered to have a reduction in their hours of work or wages for the purposes of the regulation.

When applying the formula with respect to a reduction in wages, note that regular wages does not include any overtime pay, vacation pay, public holiday pay, premium pay, domestic or sexual violence leave pay, infectious disease emergency leave pay, termination pay, severance pay or termination of assignment pay payable to an employee.

For example, Zala is wondering if the modified rules with respect to temporary layoff apply to her during her work week from June 1, 2020 to June 7, 2020. She wants to determine whether her hours of work have been reduced for the purposes of the regulation.

Zala looks at a calendar to find her first regular work week before March 1, 2020. She then notes on the calendar the 12 full work weeks that precede that work week. Zala then looks at each of those 12 work weeks individually to determine if any of the scenarios apply to exclude any of those 12 weeks from her averaging calculation.

It turns out that during that 12-week period, she was on vacation for two weeks and she was away sick (in other words, unavailable for work) for a couple of days during another work week. Zala therefore excludes these three work weeks from the averaging calculation. None of the criteria apply to the remaining 9 weeks and so those 9 weeks will be the weeks she averages .

Zala adds the number of hours she worked in each of these 9 weeks together and divides the answer by 9. She determines that, on average during this period, she worked 32 hours per week. During the June 1, 2020 to June 7, 2020 work week, Zala worked 10 hours.

Since Zala worked fewer hours during the June 1, 2020 to June 7, 2020 work week as compared to the average number of hours she worked in the relevant timeframe, Zala has had a reduction in her hours of work for the purposes of the regulation.

3. The employee was not employed during the entire work week that immediately preceded March 1, 2020:

  • The employee’s hours of work are considered to be reduced if the employee works fewer hours in the work week than they worked in the work week in which they worked the greatest number of hours.
  • The employee’s wages are considered to be reduced if the employee earns less regular wages than they did in the work week in which they earned the most regular wages.

Applying this formula

This formula provides for a comparison between the work week in which the employee worked the greatest number of hours or earned the most regular wages - regardless of when that occurred during the employment relationship - and the number of hours the employee worked or the regular wages the employee earned during the work week in question during the COVID‑19 period (March 1, 2020 to July 30, 2022).

If the employee worked more hours or earned more regular wages during any previous work week than the work week in question, the employee is considered to have a reduction in their hours of work or wages for the purposes of the regulation.

For example, Bianca is wondering if the modified rules with respect to temporary layoff apply to her employee Sam during his work week from June 1, 2020 to June 7, 2020. She wants to determine whether Sam’s hours of work have been reduced for the purposes of the regulation.

Sam was hired on May 1, 2020. Bianca looks at each of the work weeks Sam has worked since his date of hire and notes the number of hours he has worked in each work week. She then finds the work week with the greatest number of hours of work.

The greatest number of hours Sam worked in a single work week was 40 hours. During the work week from June 1, 2020 to June 7, 2020, Sam worked 15 hours. Since Sam worked fewer hours during the June 1, 2020 to June 7, 2020 work week as compared to the work week in which he worked the greatest number of hours, Sam has had a reduction in his hours of work for the purposes of the regulation.

Claims deemed not to have been filed

Subject to two exceptions set out below, where an employee files a claim with the Ministry of Labour, Immigration, Training and Skills Development for termination or severance of employment on the basis that the employee’s wages or hours of work were temporarily reduced or temporarily eliminated by the employer for reasons related in whole or in part to COVID‑19 during the defined COVID‑19 period (March 1, 2020 and July 30, 2022), that part of the claim is deemed not to have been filed. Other parts of the claim will be investigated as usual.

Employees whose claims are deemed not to have been filed may choose to sue their employer for wrongful dismissal in court.

There are two exceptions to this rule. In these situations, a termination and/or severance claim can be filed with the ministry and will be investigated if :

  • an employee was constructively dismissed and resigned in response to the reduction or elimination in hours of work or wages prior to May 29, 2020
  • a layoff was longer than the length of a temporary layoff and resulted in a termination and/or severance before May 29, 2020

End of the COVID-19 period

The modified rules described above apply only during the defined COVID‑19 period (March 1, 2020 – July 30, 2022). These rules will no longer be in effect when the COVID‑19 period ends.

As such, beginning on July 31, 2022:

  • employees will no longer be deemed to be on unpaid infectious disease emergency leave
  • the ESAs regular rules around constructive dismissal resume. This means that a significant reduction or elimination of an employee’s hours of work or wages may constitute a constructive dismissal under the ESA, even if the reduction or elimination was done for reasons related to COVID‑19. (The employee would need to resign within a reasonable period in response to the constructive dismissal in order for the employee to be considered to be terminated or severed)
  • the ESAs regular rules around temporary layoff resume. This means that the “temporary layoff clock” will once again start ticking. For practical purposes, an employee’s temporary layoff clock re-sets on on July 31, 2022
  • employees will be able to file termination and severance claims with the Ministry of Labour, Immigration, Training and Skills Development based on their employer temporarily reducing or temporarily eliminating their wages and/or hours of work after July 30, 2022, even if the reduction or elimination is for reasons related to COVID‑19

Note that unpaid and, where applicable, paid infectious disease emergency leave remain available to employees. Paid infectious disease emergency leave is available until March 31, 2023.

An employee’s ability to take unpaid (or, where applicable, paid) infectious disease emergency leave is not connected to the definition of the COVID-19 period. This means that at the end of the COVID-19 period, even though employees will no longer be deemed to be on unpaid infectious disease emergency leave, employees continue to have the right to take unpaid (and, where applicable), paid infectious disease emergency leave if they are not performing the duties of their position for certain reasons related to COVID-19. (Note that paid infectious disease emergency leave is available until March 31, 2023.) Learn more about eligibility for infectious disease emergency leave.

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