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Options During The COVID-19 Pandemic | Employment Law

As the COVID-19 pandemic forces some businesses to close down temporarily, some are permanently closing doors due to financial hardship, and others have been lucky enough to move their company to work remotely – allowing their businesses to continue “as usual” with employees working from home. Businesses that need to curtail some of the financial strains caused by the pandemic are looking for ways to adjust and stay afloat, often leading to tough decisions concerning their workforce. They want to know what their options are during the COVID-19 pandemic.

This article outlines some of the options employers potentially have when making changes to their workforce to maintain operations during financial hardships.

Termination Options During The Covid-19 Pandemic?

Employers have a right to terminate their employees. But the employers have to make sure that the termination is in accordance with the appropriate notice of termination and/or termination pay.

When it comes to it, employer options during the COVID-19 pandemic may include terminating their employees without cause dismissal stating the reason of financial hardship. The employers should consider that the termination is not perceived to be due to any Human Rights issue, e.g. when the employee has asked for accommodation needs, or the employee has complained regarding harassment at work, etc. 

What Are Layoff Options During The COVID-19 Pandemic?

Another option during the COVID-19 pandemic is temporary lay-offs. During pandemic-related slowdowns, businesses may be pressured to reduce their staffing to conserve funds. Employers can temporarily lay off the employees due to COVID-19 work shortages to mitigate seasonal business loss and/or economic hardship. 

Employment Standards Act, 2000 for provincially regulated employees, and the Canada Labour Code for federally regulated employees have provisions about how to lay off the employees. If the employers lay off beyond the permittable time period under the statute, it will be considered as dismissal, and the employees will be entitled to termination pay. You refer to our article, “Layoff Considerations During COVID-19 Pandemic,” for more information. 

Can Employers Decline Vacation Time?

Employers are asking the employees to stop taking their vacation days; this is a prohibited practice as employers cannot stop the employees from taking their entitled vacation for the year. The employers can advise the employees about the travel restrictions. To clarify, denying vacation time is not among employer options during the COVID-19 pandemic.

Can Employers Reduce Work Hours and Wages?

Another employer option during the COVID-19 pandemic includes reducing hours and wages. New regulation to Ontario’s Employment Standards Act (ESA) was introduced on May 29, 2020. The regulation states that reducing hours and wages will not be considered as layoff and/or constructive dismissal. 

Earlier, if the employer changed the terms of the employees’ contract by reducing the hours or the wage, the employee could ask for constructive dismissal. But due to COVID-19, the employers have to save their business from financial losses and rather than choosing to terminate or lay off an employee they are reducing their wage and hours of work. 

The regulation states that employees who experience a COVID-19 hours reduction are deemed on an Infectious Disease Emergency Leave until they are returned to work or six weeks after the declared emergency ends. The regulation does have a few exceptions. If you fall under the same category, you should consult a counsel about your recourse. 

Can Employers Demote an Employee?

One of the employer options during the COVID-19 pandemic does not include demotions. Due to COVID-19, the employers may recall the employees and offer them a lower position than previously employed, but this is a prohibited practice. Employers cannot demote the employees as their actions will be treated as constructive dismissal. In this case, employees will be entitled to take compensation from the employers. 

If there is a business emergency and the employers have to change the employee’s position temporarily, the employee can agree by signing a contract. If the employers fail to return the employee to the previous position, it will be deemed constructive dismissal. 

What are the Risks of Changing Employment Locations?

Risky, options during the COVID-19 pandemic may include relocating the place of work. Some employers may decide to relocate during the pandemic to cut costs and minimize the risk of illness. Shifting operations to a new location can create a chance of a constructive dismissal claim if employees are required to commute to the new location. Employers consider the reasonableness of any transfer, such as the distance from the original location. You can refer to our article on “Constructive Dismissals and COVID-19 Considerations” for more information. 


As you can see, there are quite a few by which employers can reduce their payroll liability. The employer should not make unilateral changes to the employees’ employment agreements but take other measures that will save their business during a pandemic and accommodate their employees. It is advised that you consult legal counsel about mitigating your loss and the steps you can take to address the workplace issues.  

Contact Us 

If you are an employer or employee requiring assistance with employee compensation, or an employee who believes you have been constructively dismissed our team of experienced employment and human rights lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with a same-day response, visit our CLO Program page for our strategic solutions.

Disclaimer: This blog is not intended to serve as or should be construed as legal advice and is only to provide general information. It is in no way particular to your case and should not be relied on in any way. No portion or use of this blog will establish a lawyer-client relationship with the author or any related party. Should you require legal advice for your particular situation, fill out the contact form, call (800) 771-7882 or email [email protected].