The Ontario Government has continued to implement measures to attempt to slow the spread of the Novel Coronavirus (COVID-19). On March 17, 2020, the Ontario Government took its first major step in combatting COVID-19 by declaring an emergency under Section 7.0.1(1) of the Emergency Management and Civil Protection Act. Section 7.0.2 of this rarely used but powerful piece of legislation allows the Ontario Government to make various orders including but not limited to:

1. Regulating or prohibiting travel or movement to, from or within any specified area; and
2. Closing any place, whether public or private, including any business, office, school, hospital or other establishment or institution.

As part of the declaration of an emergency, the Ontario Government prohibited all organized public events of over 50 people, and required the following facilities to close immediately:

• All facilities providing indoor recreational programs;
• All public libraries;
• All private schools as defined in the Education Act;
• All licensed child care centres;
• All bars and restaurants, except to the extent that such facilities provide takeout food and delivery;
• All theatres including those offering live performances of music, dance, and other art forms, as well as cinemas that show movies; and
• Concert venues.

The Order of March 17, 2020 was set to remain in place until March 31, 2020, at which point it was to be reassessed and considered for an extension.

However, on March 23, 2020, the Ontario Government made a further Order by announcing the mandatory shutdown of all non-essential workplaces. This most recent Order took effect at 11:59PM on Tuesday, March 24, 2020. The mandatory closure of all non-essential workplaces is expected to remain in place for 14 days, as permitted by the Emergency Management and Civil Protection Act, and will be reevaluated at that time unless it is terminated earlier.

Which Workplaces are Considered to be Essential?

The list of essential workplaces that has been released by the Ontario Government is broad. It permits a wide range of businesses to continue their operations and includes nineteen different categories of businesses that can remain open during the mandatory shutdown. The full list of essential workplaces can be found here. In the event that you have any questions with respect to whether your workplace constitutes an “essential workplace” we ask that you contact the author or your Miller Canfield lawyer.

For all non-essential workplaces, it is mandatory that they shut down their physical workplaces while the most recent Order remains in place. This means that the earliest expected time that all non-essential workplaces may resume their operations at their physical workplaces is April 9, 2020.

Can Businesses Continue to Operate Remotely?

The Ontario Government has clarified in its List of Essential Workplaces communications that non-essential workplaces can continue their operations remotely. Specifically, non-essential workplaces:

1. Are not precluded from continuing engage in the provision of work and services online, by telephone or by mail/delivery; and
2. Are permitted at all times to continue teleworking and to continue online commerce.

What are the Consequences for Remaining Open during the Mandatory Shutdown?

The purpose of the Ontario Government’s mandatory shutdown of all non-essential workplaces is to promote the public good by protecting the health, safety and welfare of the people of Ontario from the threat that COVID-19 poses. As such, defying the Order carries severe consequences.

Pursuant to Section 7.0.11(1) of the Emergency Management and Civil Protection Act, every person who fails to comply with an Order or interferes with any person in the exercise of a power or the performance of a duty required by the Order faces the following possible penalties:

(a) in the case of an individual, subject to clause (b), to a fine of not more than $100,000 and for a term of imprisonment of not more than one year;

(b) in the case of an individual who is a director or officer of a corporation, to a fine of not more than $500,000 and for a term of imprisonment of not more than one year; and

(c) in the case of a corporation, to a fine of not more than $10,000,000.

In addition, there are possible fines and penalties that could be levied against a non-essential employer who continues to operate during the mandatory shutdown pursuant to the Provincial Offences Act. The serious risks (both financially and otherwise) that could result from defying the Order indicate the severity with which the Ontario Government treats this and similar situations.

Can Employees Access the New Emergency Leave?

The Ontario Government moved quickly to pass Bill 186, the Employment Standards Amendment Act (Infection Disease Emergencies) which received Royal Assent on March 19, 2020. The Bill eliminated the existing Declared Emergency Leave and replaced it with a new “Emergency Leave: Declared Emergencies and Infectious Disease Emergencies”.

The new Emergency Leave specifically provides that employees are entitled to a leave of absence without pay if the employee will not be performing the duties of their position because of an emergency declared under section 7.0.1 of the Emergency Management and Civil Protection Act and,

(i) because of an order that applies to him or her made under section 7.0.2 of the Emergency Management and Civil Protection Act;

As a result, most full-time and part-time Ontario employees (including students, temporary help agency assignment employees, and casual workers) who are directly impacted by the Ontario Government’s shutdown of all non-essential workplaces may be able to access the new Emergency Leave. Accessing the new Emergency Leave requires employers to ensure that:

• The employee is not subject to a reprisal for accessing the leave;
• The employee continues to receive benefit continuation provided that the employee continues to pay their portion of the premiums; and
• The employee is entitled to reinstatement to their position at the end of the leave, if it still exists, or to a comparable position, if it does not.

Can Non-Essential Workplaces Lay-off Employees?

If you are a non-essential workplace that has been forced to close as a result of the most recent Order from the Ontario Government, you may be in the process of considering layoffs. Prior to laying off an employee, you may wish to consider whether the employee(s) should be accessing the new Emergency Leave (discussed previously) or if employees should be required to use their vacation, sick time, or other personal days that are available to them before implementing a temporary layoff.

In the event that you are laying off employees, you should carefully review the applicable contractual provisions in your employee’s employment agreement. However, in the normal course, temporary layoffs are expressly permitted by the Employment Standards Act, 2000 (the “ESA”).

Under the ESA, a “temporary layoff” is considered to be a lay-off of not more than 13 weeks in any period of 20 consecutive weeks. In addition, employers may be able to take advantage of the longer “temporary layoff” period which is also available pursuant to the ESA. In order to trigger the longer “temporary layoff” period, which is defined as a period of less than 35 weeks in any period of 52 consecutive weeks, one of the following must occur:

• The employee receives substantial payments from the employer;
• The employer continues to make payments for benefits or a legitimate retirement or pension plan;
• The employee receives supplementary unemployment benefits;
• The employee is employed elsewhere during the lay-off and would be entitled to receive a Supplementary Unemployment Benefit Plan if they were not so employed;
• The employer recalls the employee within the time approved by the director; or
• In the case of an employee who is not represented by a trade union, the employer recalls the employee within the time set out in an agreement between the employer and the employee.

Please note that there are special rules that apply to unionized employees which vary depending on the particular Collective Agreement that is in place. In the event that you require more specific information related to these provisions, we ask that you please contact the authors or your Miller Canfield lawyer.

Can Layoffs be considered a Constructive Dismissal?

A constructive dismissal occurs when one party to the contract refuses to abide by its original terms. One of the key terms of an employment contract between an employer and employee is the continuation of employment. It is possible, therefore, that a constructive dismissal claim could be brought as a result of a temporary layoff and this has caused a great deal of concern amongst employers during this difficult time.

However, there are a number of practical and legal considerations that factor into whether or not a lay-off is considered to be a constructive dismissal. For example, when examining whether a constructive dismissal has occurred the Courts consider whether the employer has demonstrated “an intention to no longer be bound by [the employment contract]” (Farber c. Royal Trust Co. (1996), 1997 CanLII 387 (SCC)). During an unprecedented and mandatory shutdown of workplaces, there is a reasonable basis to assert that there was no intention on the part of the employer to no longer be bound by the employment contract.  In addition, the law recognizes additional defences to such claims including impossibility and frustration.

Therefore, while there is no absolute way to prevent an employee from filing a constructive dismissal claim, there are ways to mitigate against the risks of such claims. For specific advice with respect to your particular situation in this regard, we encourage you to contact the author or your Miller Canfield lawyer.

How to Prepare the Record of Employment due to COVID-19?

It is mandatory that employers file a Record of Employment (“ROE”) when there is an interruption in the employee’s earnings. An “interruption in earnings” is considered to occur when an employee has or is anticipated to have seven (7) consecutive calendar days with no work and no insurance earnings from the employer.

The ROE is used by Service Canada to process an employee’s entitlement to Employment Insurance (“EI”) benefits. There are a number of Codes that can be used by the employer when processing the ROE and it is essential that the most accurate/correct Code be used when preparing the ROE, as improperly prepared ROEs may lead to delays in the employee receiving their EI benefits. A guide has been prepared by Service Canada which may be of assistance and can be found here.

With respect to layoffs that are occurring specifically as a result of COVID-19, employers should consider using “Code A – Shortage of Work”, unless there is another more applicable reason for the layoff. As there is no specific Code for the COVID-19 situation, employers may be tempted to use “Code K – Other” so that they can provide additional information and explain the rationale for the layoff. To the extent possible, this should be avoided because it will likely result in the ROE being reviewed manually by an Agent which may delay the employee receiving EI benefits.

Conclusions

All employers should continue to assess how they can continue their operations in the face of prolonged shutdowns of non-essential workplaces, including in particular identifying which positions can work remotely.

We also encourage employers to continue preparing for the eventual return of their employees to the workplace. It is expected that all workplaces will continue to be required to take serious steps towards reducing the likelihood of infection in the workplace by means of improved cleaning procedures, social distancing protocols, and using personal protective equipment where appropriate. In addition, employers should review their existing policies and procedures for compliance with existing legislation, such as the Occupational Health and Safety Act and the Ontario Human Rights Code. Employers can and should continue to take steps in this regard during the shutdown.

This is part of a series of our COVID-19 alerts providing clients with practical advice on measures they can take to navigate through these troubled times. Please contact the authors or your Miller Canfield lawyer with further questions.

Contact

Jeffrey Patterson
+1.519.946.2161
patterson@millercanfield.com 

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