What’s remote got to do with it?

To date it has been unclear for employers as to how to fit remote workers into the mass termination regime in light of the location-based definition of “establishment” under the ESA. This is because the term “establishment” under the ESA is defined as “a location at which the employer carries on business”. Photo credit: Pexels/Andrea Piacquadio

 

On March 13, 2023 it was announced that the Ontario government will introduce amendments to the mass termination rules under the Ontario Employment Standards Act, 2000 (the ESA) to ensure remote employees are entitled to the same enhanced notice period as their in-office counterparts. The same I would have thought was obvious as the ESA applies to all employees in Ontario whether full-time, part-time, casual, in office, or remote unless prescribed exclusions are stipulated in the regulations to the ESA.  

What are the mass termination regime “enhanced” notice entitlements?

The ESA, as it is currently worded, provides that employees are entitled to enhanced notice of termination if the employment of 50 or more employees are terminated at an employer’s “establishment” within a rolling four-week period. 

As you may recall, individual employees with tenure of three months to eight years or longer are entitled to notice of termination ranging from one to eight weeks.  

However, under the mass termination regime, regardless of the individual employee’s actual length of service, they will be entitled to the following “enhanced” notice of termination entitlements if their employment is terminated in accordance with one of the following prescribed mass termination scenarios (i.e., within a four-week period):

Eight weeks of notice if the employment of 50 to 199 employees is to be terminated; 

12 weeks’ notice, if the employment of 200 to 499 employees is to be terminated; and

16 weeks’ notice, if the employment of 500 or more employees is to be terminated.

Why the need for the change?

To date it has been unclear for employers as to how to fit remote workers into the mass termination regime in light of the location-based definition of “establishment” under the ESA.

This is because the term “establishment” under the ESA is defined as “a location at which the employer carries on business”. In addition, the ESA provides that if the employer carries on business at more than one location, separate locations can constitute one establishment if: (a) the separate locations are located within the same municipality (which they may or may not be for remote workers – and certainly don’t need to be); or (b) one or more employees at a location have seniority rights that extend to the other location under a written employment contract, whereby the employee or employees may displace another employee of the same employer (i.e., have bumping rights under a collective agreement). 

Where an employee works remotely in their home (or elsewhere) such location technically does not fall within the current definition of “establishment” under the ESA as it is doubtful that employers ensure that all of their workers work from home within a single municipality.  

As such, remote employees’ home offices are not clearly considered or included under the current definition of “establishment”.  This lack of consideration of the impact of remote working is not surprising as it is only recently that remote working arrangements have become common employment options for employees in Ontario. According to Made in CA’s “Work From Home Statistics for Canadians”:

90 per cent of teleworkers report consistent or higher productivity rates working remotely, as compared with in-office work;

41 per cent of teleworkers would prefer to work half their weekly hours remotely;

39 per cent of teleworkers would rather work remotely for most, if not all, of their time; and

37-48 per cent of all paid jobs in advanced economies, such as Canada or the United States, can be performed remotely.

The proposed changes to the ESA, if passed, will broaden the definition of “establishment” to explicitly incorporate employees’ remote home offices. 

What are the proposed changes to the ESA?  

While the draft legislation has not yet been published, it is apparent that the Ontario government intends to introduce some clarity for employers as to how to treat remote workers in a mass-termination situation. 

What is known is that remote employees under the to-be-seen proposed changes would now be counted for the purposes of determining whether the rolling 50-employee mass termination threshold in a four-week period has been met – regardless of other considerations (e.g., the municipality in which they work). Such changes would entitle employees who solely work remotely to be eligible to receive mass termination notice. 

The government is also proposing “regulatory changes that would require employers to provide new hires with information in writing about their job, such as pay, work location, and hours of work, and the date by which that information needs to be provided (e.g. before their first shift).” 

This proposed change has received less attention and may or may not be important as most employers have template offer letters or employment agreements that standardly contain such provisions along with template language that allows them to change such terms and conditions of employment without the same constituting a constructive dismissal.  

What would be noteworthy is if such proposed amendments included language that curtailed the rights of employers to include such “no impact of changes to terms and conditions” clauses and/or required to provide prescribed notice of such changes, particularly when such changes do in fact constitute a constructive dismissal within the meaning of the ESA.