Canada: Ontario Government Seeks To Tighten Rules That Apply To Mass Layoffs

On March 13, 2023, Labour Minister Monte McNaughton announced proposed updates to the Employment Standards Act, 2000 (the "ESA"), with the changes aimed to protect remote workers.

Labour Minister Monte McNaughton announced the changes would make ".employees who work solely from home eligible for the same enhanced notice as "in-office" and other employees in mass termination situations." ¹

Typically, terminated employees are entitled to notice of termination and/or severance pay. "Notice of termination" is the amount of notice an employer must give to an employee when their employment is terminated. However, under the ESA, special rules apply when an employee is terminated as part of a mass layoff.

Currently, the ESA rules for mass layoffs apply when 50 or more employees are terminated from an employer's "establishment" within a four-week period. Under the ESA, these employees are entitled to either 8, 12 or 16 weeks' statutory notice depending on the number of employees who are terminated.

The proposed changes, if passed, would broaden the definition of "establishment" under the ESA to include an employee's remote home office. The province has indicated the change will make remote workers eligible to receive the same minimum statutory notice of termination or pay-in-lieu during a mass layoff scenario.

In announcing the changes, the province estimated that approximately 2.2 million people were working remotely in the fourth quarter of 2022, either exclusively or on a hybrid basis.

It is unclear whether, or to what extent, any employers were routinely differentiating between in-house and remote workers in the context of mass terminations. Regardless, if the proposed changes become law, the change will clarify employment standards obligations with respect to remote workers in the context of mass layoffs. Further, employers may see the mass termination provisions under the ESA being triggered more often, with remote workers now counting toward the calculation of 50 or more employees. In some cases, the proposed changes may also work to capture entirely remote workplaces.

Footnote

1 News Release, "Ontario Tightening Rules Around Mass Layoffs" (March 13, 2023).

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