The clock is ticking with Ontario’s Infectious Disease Emergency Leave period set to expire in less than three weeks
The clock is ticking with Ontario’s Infectious Disease Emergency Leave (IDEL) period set to expire in less than three weeks on July 30. Does that mean it’s time for employers to finally pay the piper after nearly two-and-a-half years of avoiding severance payouts? Not necessarily.
Recall, the provincial government enacted IDEL on March 19, 2020, in response to the state of emergency declared two days earlier. Employees could as a result take job-protected leaves if they met specific criteria relating to COVID-19. Myriad employers were forced to lay off workers or slash hours to cope with lockdowns. Most of these layoffs would have inexorably led to automatic terminations under the Ontario Employment Standards Act (ESA). Envision an economic tsunami of imminent severance obligations that would have killed many businesses that were at the time already barely able to tread water.
On the precipice of the looming abyss, Ontario Premier Doug Ford threw employers a life raft. IDEL was amended, on May 29, 2021, to fundamentally alter the treatment of layoffs under the ESA. Non-unionized employees who were laid off (or had their hours/pay reduced) were retroactively deemed to be on a job-protected statutory leave, not a layoff. Employers could stay afloat while the IDEL period was in play. And in play it was — for much longer than most expected.
When the IDEL period was set to expire in early September 2020 (six weeks after the state of emergency was lifted in Ontario), businesses were not yet ready to recall employees. Naturally, IDEL was extended to Jan. 2, 2021. By that time, most employees on a deemed IDEL had not sued for constructive dismissal under the common law because of their optimistic but often mistaken belief of reinstatement. As we have penned in previous columns, despite having a right to sue, their inaction led to legal acquiescence. Deemed to have implicitly accepted the layoff, they could no longer sue. Their only hope was reinstatement or an end to the IDEL period. The Government extended it four more times to July 3, 2021, Sept. 25, 2021, Jan. 1, 2022 and currently July 30, 2022.
Of course, if the IDEL period is extended, it is status quo with everyone floating along in Ford’s ark.
But will IDEL be extended again? Not likely, even with the onset of the seventh wave, as Ontario’s Chief Medical Officer, Dr. Kieren Moore, declared last week. That is because the tides have turned on public opinion, political intervention, COVID variants and the economy. The exhausted populace is yearning for an end to the pandemic. Some believe it is already over or, at least, should be treated as if it was. Provincial and Federal governments have relaxed or eliminated vaccine mandates and masking requirements. Omicron variants aren’t as deleterious as previous ones. Many businesses weathered the storm with the assistance of waning or discontinued government initiatives. Companies have either recalled employees or should be in a fiscal position to deal with the consequences when IDEL ends. All signs now point to IDEL ending on July 30.
Employers have options. The two most obvious are either reinstatement or termination. If terminated, employees will be entitled to at least the minimum statutory entitlements (up to 34 weeks in total). Because most pre-pandemic employment contracts are unenforceable, common-law notice (of up to 24 months) is required. For that reason, employers may consider getting some bang-for-their-buck by recalling employees on working notice to work out their common-law notice period. For those that do, statutory severance must still be paid to some employees without working for it (of one week per year up of 26 weeks). They will also want to consider the harm that working notice may cause to the business and morale.
Since, with the job market red hot, most employees will have found work elsewhere, simple recognizance is recommended. Employers may wish to ask employees if they are prepared to return to work by a certain date. We have seen companies stipulate they will consider the employee to have resigned or abandoned their position if they do not receive a response by a certain deadline. If the employee refuses to return to work, the employer is absolved of all severance obligations — a substantial cost savings when most needed. And how many employees will want to leave their new jobs and industries to return to employers who have laid them off for the last almost two-and-a-half years? If the employer simply terminates, of course, even if they are working, they must pay out at least statutory amounts. So find out whether these employees are working elsewhere before choosing their strategy is what we are advising our clients.
Finally, the “temporary layoff clock” resets on July 31. If none of the above are attractive options, Ontario companies hoping to further delay severance obligations can place employees on a temporary layoff for up to 13 weeks (with no benefits) or 35 weeks (with benefit continuance). Doing so affords employers with over a staggering three years of total breathing room to ride out the pandemic. That said, as we have cautioned previously, with employees newly educated from columns such as ours, we expect to see a second wave of common law constructive dismissal claims in response to post-IDEL period layoffs.