Under the Ontario Employment Standards Act, 2002 (the "Act"), an employer may temporarily lay off an employee for a period of not more than 13 weeks out of 20 consecutive weeks. According to the Act, a "week of lay-off" is a week in which the employee earns less than half of what they would ordinarily earn in a week. The Act also provides for temporary lay-offs of more than 13 weeks, provided the employer meets certain requirements set out in the Act.
Any temporary lay-off must be permitted by the collective agreement or the employment contract. If the ability to lay off an employee is not provided for in the union agreement or employment contract, then the temporary lay-off may be treated as a constructive dismissal by the employee, who may then be entitled to damages for wrongful dismissal and the employer vulnerable to a potential lawsuit.
Employers wishing to place an employee(s) on temporary lay-off should consider having their employee(s) sign a letter acknowledging and consenting to the lay-off if it is not already permitted by their employment contract(s). Overall, employers would be well-advised to contact legal counsel when considering their options.
The Canadian Payroll Association has prepared an excellent guide with information for employers regarding COVID-19 related employment questions. The guide is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
