On December 17, 2020, the Ontario Government implemented Ontario Regulation 764/20: Terms and Conditions of Employment in Defined Industries – Hospitality, Tourism and Convention and Trade Show Industries under the Employment Standards Act, 2000 (“ESA”) in support of unionized employers in certain industries that have been adversely affected by the COVID-19 pandemic. O. Reg. 764/20 allows unions and employers in the hospitality, tourism, and convention and trade show industries to negotiate for greater flexibility in the application of the default statutory rules governing the election rights of employees on layoff.
Under the ESA, unionized employees who have been laid off for 35 weeks or more in a period of 52 consecutive weeks may elect to continue on layoff and retain the right to be recalled to work, or renounce the right to be recalled in exchange for payment of termination and severance pay (hereafter, “Election Rights”). Where an employee elects to continue on layoff, the employer is required to pay that employee’s termination and severance pay into trust. This amount is to be held in trust until the employee is either recalled within the collective agreement recall period (in which case the amount is returned to the employer), or the employee’s right to be recalled expires or is subsequently renounced by the employee (in which case the amount is paid to the employee).
Under O. Reg. 764/20, unions and employers may lawfully agree that the normal ESA provisions regarding Election Rights do not apply. Rather, if an employee has not yet elected to renounce the right to be recalled, the union may decide on the employee’s behalf that their right to recall will be retained. Such union election decisions are binding and neither the union nor the employee may renounce the right to be recalled before a date agreed to by the employer and the union. These arrangements also suspend the requirement for termination and severance pay amounts to be paid into trust.
The impact of O Reg 764/20 is that unions and employers in the hospitality, tourism, and convention and trade show industries can agree to defer the date unionized employees obtain Election Rights and therefore defer any potential liability for termination and severance payments. Delaying these liabilities may provide some relief to employers in the hospitality, tourism, and convention and trade show industries, which have been hard hit by the COVID-19 pandemic and forced to place their workforces on layoff.
Employers should consider the effect of O. Reg. 764/20 in conjunction with the particular wording of their collective agreement(s), which may impose layoff obligations that exceed and differ from the default statutory rules.
O. Reg. 764/20 is set to expire on December 17, 2021.
It should be noted that O. Reg. 764/20 applies only to unionized employees in the industries specified above. The entitlements of non-unionized employees whose hours of work have temporarily been reduced or eliminated for reasons related to the COVID-19 pandemic are governed by O. Reg. 228/20: Infectious Disease Emergency Leave. For more information, please see our previous post regarding Infectious Disease Emergency Leave, which is accessible here.
For advice specific to your situation, consider contacting your regular lawyer at Rae Christen Jeffries LLP.