April 13, 2020

In light the current COVID-19 pandemic, and its impact to the economy across the province, layoffs and leaves of absences are becoming much more commonplace.

If your employer has temporarily laid you off, or you are on a leave of absence due to COVID-19 related issues, you may be wondering what impact this may have on the various benefits previously provided by your employer.

First, Look at Your Contract

The starting point is to verify whether there is a term in your contract or collective agreement that speaks to benefits during a layoff or leave. If such terms exist, they may be more beneficial to you than what the Ontario Employment Standards Act (“ESA”), for example, provides.  In this case, the contractual terms would prevail.

Do the ESA and Canada Labour Code (“CLC”) Require Employers to Continue Benefits During a Layoff?

Absent contractual terms to the contrary, employers are not strictly required by statute to continue benefits or pension plan contributions during temporary layoff periods.

In this case of pension contributions, and subject to the plan language, this does not mean that you lose the value of your previous contributions to date, but it does mean that it can be legal for an employer to suspend any further contributions or benefit continuation throughout the layoff period.

In Ontario, the ESA generally permits a temporary layoff for up to 13 weeks. However, should the employer provide some form of consideration to the employee beyond week-13, the layoff may extend for a period of up to 35 weeks in a 52-week timeframe (see ss. 56(2) of the ESA).

For those employed with a federally regulated employer in Ontario, and further to the Canada Labour Standards Regulations (C.R.C., c. 986) (“Regulations”), layoffs typically last no longer than three months. However, the layoff can be extended beyond that point should the employer recall the employee back within six months, or otherwise provide some form of consideration to the employee (see ss. 30(1) of the Regulations).

An employee’s tenure continues to accumulate during layoff periods.

Do the ESA and CLC Require Employers to Continue Benefits During a Leave?

The situation with respect to an employee on a leave of absence differs.

Under the ESA, an employee on pregnancy, parental, sick, family responsibility, bereavement, declared emergency, family caregiver, family medical, critical illness, organ donor, domestic or sexual violence, child death or crime-related child disappearance leave has the right to continue to participate in pension plans, life insurance plans, accidental death plans, extended health plans and dental plans during the leave (see ss. 51(1) of the ESA).

Under the Canada Labour Code, an employee on maternity, parental, compassionate care, critical illness, death or disappearance, personal, family violence, aboriginal, and court or jury duty leave has the right to continue to participate in pension, health and disability benefits during the entire period of the leave (see  ss. 209.2(1) of the CLC).  The same applies to the recently added COVID-19 emergency leaves.

An employee’s tenure continues to accumulate during leave periods.