Ontario expands emergency benefit to prevent 'costly' layoffs

'Without this important change, many businesses would have been forced to pay significant termination sums'

Ontario expands emergency benefit to prevent 'costly' layoffs

The Ontario government is expanding its social safety net for Canadians who have been forced to work fewer hours or have been laid off temporarily as a result of COVID-19

The province amended its Employment Standards Act (ESA) and extended leave benefits to non-unionised workers. In the new regulation, workers whose hours have been cut or whose roles have been eliminated temporarily during the pandemic will be placed on Infectious Disease Emergency Leave.

Ontarians will retain their status as employees and continue to enjoy legal protections. They may also qualify for emergency income support from the federal government.

READ MORE: Ontario introduces legislation to safeguard jobs amid COVID-19

This expansion of benefits aims to save businesses from having to terminate workers permanently should their furlough period exceed the permitted length.

Furloughs and work-hour reductions have been among the most widely implemented cost-containment strategies for businesses that were hit hard by the COVID-19 economic downturn.

In April, for example, about 379,000 workers in Ontario were laid off temporarily, data from Statistics Canada showed.

Jeopardising economic recovery
The amendment appears to offer a win-win solution for employers and employees alike, government and business leaders suggest.

Under the existing ESA, companies that must let go of staff after their temporary layoff expires are often forced to make “costly payouts,” the Ministry of Labour, Training and Skills Development said. “For many businesses, [this] could be the difference between survival and closure.”

The emergency leave benefit was developed to prevent companies from heading towards potential closure by ensuring affected workers have a financial support system to fall back on.

READ MORE: Ontario makes temporary change to layoff regulations

“As we take the necessary steps to safely and gradually restart the economy, we need to make sure business owners can reopen their doors and workers have jobs to go back to,” Labour Minister Monte McNaughton said.

Leaders in Ontario’s business community agree.

“In addition to the lost livelihoods of business owners and workers, the closures and job losses we would endure without any changes would have a further devastating impact on Ontario’s economy,” said Rocco Rossi, president and CEO of the Ontario Chamber of Commerce.

Ontario’s current employment law placed businesses “in an extremely vulnerable position,” said Julie Kwiecinski of the Canadian Federation of Independent Business.

“Without this important change, many businesses would have been forced to pay significant termination sums when they are financially strapped due to forced shutdowns, jeopardising their ability to make it to the other side of COVID-19,” Kwiecinski said.

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