COVID-19 – Update – Temporary Lay-offs And Constructive Dismissal

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.