According to Statistics Canada, two in five employers in Canada have reduced hours or laid off one or more employees since the beginning of the COVID-19 crisis. One of the risks associated with those difficult decisions is a constructive dismissal claim that would trigger statutory notice and severance requirements under provincial employment standard legislation and under the common law. Ontario’s government has now taken a major step to prevent claims under its Employment Standards Act, 2000 (ESA) resulting from COVID-19.
On April 30, 2020, the Ontario government, in collaboration with provincial health and safety associations, released the Health and Safety Association Guidance Documents for Workplaces During the COVID-19 Outbreak.
In Canada, if an employer wishes to terminate an employee without cause, it must provide notice or pay in lieu thereof. In other words, unlike in the United States, Canada does not have employment at-will. American businesses operating in Canada may find that Canadian employees whose employment has been terminated without cause will be entitled to no less than one month per year of service if a judge is left to decide an employee’s severance package. For this reason, employment contracts—and, specifically, the termination clauses in those contracts—are essential to controlling severance costs in Canada.
Several changes in labour and employment law have recently been implemented in several Canadian provinces.
On December 6, 2018, the government of Ontario unveiled Bill 66, Restoring Ontario’s Competitiveness Act, 2018. The bill is designed to reduce the regulatory and financial burden of operating a business in a number of areas, including employment and labour relations. This bill marks yet another proposed adjustment to Ontario’s labour and employment laws, and introduces