COVID-19 Update: Do Reduced Hours of Work or a Temporary Lay Off Constitute a Termination or a Constructive Dismissal? The legal waters just got murkier

by | Jun 2, 2020 | For Employers

The Ontario government has just amended the Employment Standards Act (the “ESA”) to address reduced hours of work and layoffs caused by COVID-19. A copy of the new law is found here.

Essentially, the definition of temporary layoff and constructive dismissal under the ESA has been amended from March 1, 2020 until six weeks after the state of emergency has ended. Employees are deemed to be on unpaid leave under the ESA in these scenarios with some exceptions. The Ontario government is expected to extend that state of emergency until the end of June later today.

This new law will be of particular interest to employers who (i) laid off employees about 13 weeks ago and did not continue their employee benefits, or (ii) laid off more than 50 employees about 13 weeks ago. 

Since a significant reduction in an employee’s hours of work or a temporary lay off is generally considered a termination (or constructive dismissal) at common law, the main issue of interest to most employers is whether this change in the ESA changes the common law. In other words, does a temporary layoff or a reduced workweek still constitute a termination at common law that requires an employer to provide the employee with termination pay? This new law does not explicitly address this issue.

If you want to know your organization’s potential legal exposure in relation to reduced working hours or for laid off employees, please contact me at 416 317-9894 or at [email protected]



The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.



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