CLIENT UPDATE March 31, 2020 Legal Implications on the Employer/Employee Relationship

We are contacting you today to highlight the potential impact on aspects of the employer/employee relationship as a result of the COVID-19 pandemic.
There are a number of considerations to be made in relation to other matters of the employer/employee relationship in light of COVID-19 related business decisions.
We are seeing Group Benefit providers making adjustments to employee benefit programs to address the changing environment of the COVID-19 pandemic. Employers are encouraged to contact their benefits provider, or benefits consultant to learn more about these changes and how they directly impact their plan and their employees.
Employers are reminded that provision of employee benefits is a key element to consider during any plans for temporary layoffs, as well as is the process for obtaining any employee contributions in the absence of any payroll deductions. Many of these factors intersect with current employment law such as the Ontario Employment Standards Act, 2000, and should be considered.
Additionally, employers are reminded that employees who are unable to report to work due to illness including COVID-19 are eligible to apply for any existing short-term disability benefits, as per the terms of your plans. Employers are also encouraged to consider the impact of COVID-19, and COVID-19 work interruptions on employees currently off on short term disability or long term disability whose return to work dates may be impacted.
On March 17, 2020 the provincial government invoked s 7.0.1 (1) of the Emergency Management and Civil Protection Actand declared a State of Emergency.  With this, came the ordered closures or operating restrictions for many businesses.  As a result of this, the province also passed an amendment to the Employment Standards Act, 2000, the Infectious Disease Emergency Act, 2020 on March 19, 2020.  Key elements of the Act, include:

  • Provision of Job Protected Leaves to those affected by COVID-19
  • Elimination of the requirement to provide medical certification for COVID-19 related absences although other documentation may be required
  • Providing these measures retroactive to January 25, 2020 and until further notice.

Details are provided here: Changes to ESA – March 2020
Employers should note that a job protected leave is not new to Employment Standards.  We currently have this requirement for many kinds of leaves of absence including pregnancy, parental, and caregiver etc. It is important to note that despite the job protection, there is no requirement for the leave to be a paid leave.
The forced closures and/or operating restrictions on many businesses have resulted in massive layoffs or reductions in hours across the province, and the country.  While the Ontario Employment Standards Act, 2000 provides for both temporary and permanent layoffs, these do bring other legal implications related to the employer/employee relationship, known as the employment contract. 
In brief, the key element is whether the employment contract permits the employer to unilaterally lay off the employee. In unionized environments there is generally specific language in the collective agreement that deals with the right to lay off employees. In contrast, most non-union environments would not have these provisions in an employment contract.  According to current employment law and common law this would expose the employer to potential for what is known as constructive dismissal, and the potential to be sued for this by the laid off employee(s). 
Experts in the field of employment law are currently debating whether the magnitude of the COVID-19 crisis will be factored into how the legal system would look at these actions, or whether the legal system even has the capacity to deal with these in the short term.
One of the challenges in the current situation is that the state of emergency happened so quickly and many employers saw a sudden closure to all or part of their business, or a sudden drastic drop in business and therefore business revenue.  Each of these resulted in almost immediate decisions to layoff their workers, without necessarily being aware there could be a negative legal impact, or having adequate time to consider the long-term impact.  
To further complicate this situation, there are other legal factors at play such as the legal construct of frustration of contract (unforeseen circumstances that prevent an employment contract from continuing) that could reduce or eliminate employer liability.
What can an Employer Do to Reduce Liability?
While that debates continues, employers can take some steps to reduce their liability in this area:
First it is important to understand which actions that can be considered constructive dismissal.  These include, but are not limited to:

  • unilateral decisions to lay off employees where no express agreement to do so exists
  • unilaterally reducing hours of work (and therefore earnings) of employees
  • unilaterally reducing wages or salary of employees
  • making unilateral changes to employee terms and conditions of employment including negative changes to benefits plans or co-pay arrangements

In light of these, the employer can take many steps to avoid, or reduce these actions, including but not limited to:

  • Encourage employees to use accrued vacation or banked overtime to cover any interruption in work availability.  This will keep them on payroll for the short term and avoid layoffs.
  • Consider options such as Work Share programs that are employer and employee approved.  These provide for reduction in hours and earnings for employees while providing entitlement to EI benefits, as well as maintaining employee group benefits. The recent reduction of the waiting period for approval from 30 to 10 days would provide access to these programs much sooner than was the previous norm.  Details are provided here: Work Share Program
  •  Ask for volunteers for any temporary layoffs where possible, and obtain agreement in writing.
  • Ensure that if a temporary layoff (up to 13 weeks) is necessary that as much notice of the layoff is provided as possible.  This will reduce any pay in lieu of notice that could be required should the layoff become permanent.
  • Ensure that in a temporary layoff that the employees’ benefits are being maintained.
  • Consider the options for returning laid off staff using the recently announced wage Subsidy program, to reduce the length of a layoff.
  • Consider the options for using the Wage Subsidy program to avoid further layoffs. Details of the program are provided here: Wage Subsidy

In addition to Employment Standards Act, 2000 considerations, employers will also want to ensure they are acting in accordance with other employment related legislation during these challenging times.
Avoid discriminatory practices in COVID-19 related decision making
Ensure any decisions for reduced hours, layoffs and recalls, or terminations as a result of COVID-19 are not based on any protected grounds under Ontario human rights legislations (such as age, family status, etc.) Please see here for full list: Protected Grounds under Human Rights
The Ontario Human Rights Commission has prepared a Q&A document related to Human Rights and COVID-19.  Please see here: Human Rights and COVID-19
Providing a Safe Workplace
Under the Ontario Health & Safety Act, employers are required to provide a safe workplace for employees, and to take all necessary precautions to ensure their continued health and safety. Employers are encouraged to communicate to their employees, the steps they are taking to meet these obligations. The OHSA response to COVID-19 is provided here: OHSA and COVID-19
Managing a Work Refusal Related to COVID-19
Ensure appropriate investigations are conducted if employees come forward with concerns about the safety of their work environment or their tasks during COVID-19.  Involvement of the Joint Health and Safety Representative(s), and if necessary, a Ministry of Labour Health and Safety Inspector may be required to resolve the matter. 
The employee(s) initiating the refusal are permitted to remain in a safe place while the work refusal is being investigated. This location will vary depending on the nature of the business, and the location of the employee.  It does not mean that the employee can be forced to return to the work area; and nor can the employee demand to remain at home. Once a work refusal has been ruled on, it will be important to ensure there are no reprisals to any employee who brought forward the health & safety concern.
Dealing with Workplace Harassment Related to COVID-19
Tensions can run high among employees or with the general public amid fears or concerns related to COVID-19.  Ensure appropriate investigations are conducted if employees come forward with concerns about workplace harassment resulting from COVID-19 related issues.
Managing Privacy and Confidentiality  
Public Health has requirements for notification/disclosure of any person infected with COVID-19. Employers should ensure they comply with those requirements, yet also ensure they maintain the privacy and confidentiality of employee information even amidst a crisis such as this. 
We recognize that there are a multitude of factors to be considered when making business and employee related decisions during these challenging times.  We have been fortunate to be able to assist many of you individually over the past few weeks and appreciate the opportunity to do so.
We are happy to connect with you to discuss your specific business circumstances. 
Stay well,
Tracey Starrett, M.Ed, CHRL
Director, HR Solutions
Phone: 613 392-2592  or 613 438- 5289
Wilkinson & Company LLP Human Resources Solutions
Should you have any questions on the information provided in this communication please contact Tracey Starrett at