Increased Minimum Wage For Employees
As of October 1, 2020, the minimum wage for most Ontario workers was increased by 25 cents from $14.00 per hour to $14.25 per hour. This is the first of what is expected to be annual increases that are scheduled to take place on October 1 of each year.
This increase in the minimum wage applies to all employees except for students, homeworkers, hunting and fishing guides and employees who serve liquor and receive tips. Those employees are all subject to their own separate minimum wage rates.
COVID-19 Screening Requirement for Ontario Employers
On September 26, 2020, the Ontario government amended the regulations related to COVID-19 to require that all businesses comply with any advice, recommendation and instructions issued by the Office of the Chief Medical Officer of Health related to COVID-19 screening.
In conjunction with this amendment the Office of the Chief Medical Officer of Health made the recommendation that workplaces should screen all workers or essential visitors entering the work environment, except patrons and emergency service providers, thereby making such screening mandatory. This screening of workers for COVID-19 is to occur either before, or as soon as, those workers enter the workplace at the beginning of their day or shift.
The Ontario government’s publication outlining the screening questions to ask workers entering the workplace can be found here.
New Ontario Regulation 228/20 creating Infectious Disease Emergency Leave
The COVID-19 pandemic has turned the lives of many people temporarily upside down. It has also caused severe temporary hardship for many Ontario employers, pushing some to the very brink of bankruptcy.
In May, and then again in September and December, the Ontario government responded to these disruptions created by the pandemic by enacting a much-publicized new regulation that temporarily suspends the normal operation of many important aspects of provincial employment law until next year. Although the impact of this regulation on employment law has been significant, that impact has been far less than its media hype suggests. Many employers have mistakenly assumed that the regulation temporarily relieves them of all their legal obligations to honour the terms of their employment contracts with their employees. In fact, as stated below, the effect of the regulation is far more limited than many employers think, and only temporarily relieves them of a relatively small fraction of their key legal obligations. The regulation temporarily relieves them of some of their important statutory duties, but does not have much impact on their far more important contractual and common law duties.
The government’s purpose in enacting this new regulation was twofold. First, it wished to provide some measure of badly needed relief to employers who were hard-hit by the sudden, and dramatic, decline in their business operations during the pandemic, by enabling them to unilaterally reduce hours of work, and payroll costs, without triggering the obligation to pay statutory termination pay or severance pay. Secondly, it wished to enable employees who were required to do so, to take a temporary unpaid leave of absence, so as to remain at home during the pandemic without fear of permanently losing their jobs.
To that end, the government’s regulation did two important things. First, it created a brand-new form of leave of absence under the Employment Standards Act (the “ESA”), namely “Infectious Disease Emergency Leave”, thereby permitting employees who are affected by the pandemic to temporarily take a job-protected, unpaid, leave of absence from work if, for various personal reasons, they needed to remain at home.
Secondly, and perhaps more importantly for employers, the regulation temporarily suspended the normal application of the termination and temporary layoff provisions of the the ESA from March 1, 2020 until July 3, 2021.
As a result of this new regulation, any provincially-regulated employees who have had their hours or wages cut during the pandemic are deemed not to have been constructively dismissed for the purposes of the ESA. The regulation also prohibits employees who have their hours or wages cut from filing a complaint with the Ministry of Labour. It does not in any way limit an employer’s ability to permanently terminate employees if there is a permanent discontinuance of work.
In addition, the new regulation effectively suspends the statutory limits applicable for temporary lay-offs, such that employees who were placed on unpaid temporary layoff during, or shortly before, the pandemic, are not automatically deemed to have been terminated by the failure to recall them within the normal 13-week, and/or 35-week deadlines prescribed in the ESA. Instead, those temporarily laid off employees are temporarily deemed, during the COVID-19 period, to be on a temporary leave of absence, rather than on a temporary layoff.
Following the expiry of the COVID-19 period, employees who are laid off must be reinstated in accordance with the reinstatement obligation for employees on a leave of absence under the ESA.
These new provisions were originally set to end on September 4, 2020, but were first extended until January 2, 2021, before again being extended until July 3, 2021, when it became clear that there would be a ‘second wave’ of COVID-19 during the Fall of 2020 into 2021. As of July 4, 2021, the temporary suspension is lifted, unless the government perhaps chooses to again extend its application, and the ESA’s regular statutory rules concerning constructive dismissal and temporary layoffs resume their normal operation.
On the surface, these provisions appear to be very one-sided in favour of employers, and to give them, until July 2021, a temporary green light to roll back hours of work, and wages, with complete impunity. In fact, that is simply not so, because there is one huge caveat to the regulation, that has largely been ignored by the media.
That important caveat is that the new regulation does not affect, in any way, the contractual and common law obligations that Ontario employers legally owe their employees. Although not frequently mentioned by the media, the regulation only impacts the statutory obligations under the ESA itself. That means that when an employer rolls back the hours of work or wages of its employees, without their prior consent, then – despite the regulation – those employees can still sue the employer for the shortfall between what the employer is now paying them, and what their employment contracts formally required the employer to pay them. And where the rollback has the effect of reducing the employee’s total annual remuneration by 10% or more, the employees – despite the regulation – can instead sue the employer for constructive dismissal damages, namely for the pay in lieu of notice that would normally be owing to them pursuant to their employment contract had they been terminated. In many cases, the quantum of money that the employer will have to pay his employees, for breach of its contractual obligations will far eclipse any payroll savings resulting from the rollback.
Nor does the regulation prevent employees from successfully suing their employer for constructive dismissal in the event that they are placed on unpaid temporary layoff without their consent, and without there being a temporary layoff clause in their employment contracts. Once again, in many if not most cases, the quantum of constructive dismissal damages that the employer will inevitably have to pay its employees for having unilaterally placed them on unpaid temporary layoff, without first securing their reluctant consent, will far exceed the payroll savings resulting from the layoff.
Although largely ignored by Canada’s news media, the Ontario Court of Appeal has made it very clear that without prior consent from the affected employee, any significant reduction in hours of work, wage rollback or temporary layoff, amounts to constructive dismissal regardless of the Ontario government’s newly enacted regulation, this year.
In many cases, such a constructive dismissal lawsuit will cost your organization tens of thousands of dollars (in the case of short serving, and/or relatively junior, employees), if not hundreds of thousands of dollars (in the case of some long-serving and/or senior managerial, employees).
For that reason, if you are an employer, the Ontario government’s new regulation is far from being the temporary panacea to your payroll problems that both the government, and the media, have rather disingenuously cranked it up to be.