The situation regarding COVID-19 is changing rapidly, this post is current as of March 27, 2020.
Businesses large and small are dealing not only with public health and safety concerns relating to COVID-19, but with the business realities triggered by a slow-down or shut-down of their operations. There are many questions about employers’ obligations to their employees in these unprecedented and constantly changing times.
Federal COVID-19 Economic Response Plan
The Federal Government of Canada continues to evolve its economic response plan. Aspects of the plan that are of particular importance to employers are highlighted in a separate blog post at https://www.dalelessmann.com/news/blog/covid-19-economic-response-plan.
Provincial COVID-19 Financial Relief – WSIB Deferral
On March 26, 2020, the Ontario Provincial Government updated its financial relief for employers by providing a deferral of Workplace Safety Insurance Board (WSIB) premium payments for six months for all businesses in the province.
All employers covered by the WSIB's workplace insurance are automatically eligible for the provisions of the relief package and can defer premium reporting and payments until August 31, 2020. They will not be required to opt in to receive this benefit.
While it is a deferral – as opposed to a subsidy – the WSIB will not accrue interest or penalties during the deferral period. As with all deferrals, employers will need to be prepared to pay the deferred amounts at the end of the deferral period.
For more information see: https://news.ontario.ca/mol/en/2020/03/ontario-enabling-financial-relief-for-businesses-1.html
Leaves of Absence
If employees cannot work, they are likely entitled to take a leave. An employee subject to a leave of absence cannot be laid off or terminated under applicable employment standards legislation. Both Ontario and Alberta have passed new laws that create job-protected leaves of absence to deal with COVID-19.
In addition to these new leaves, traditional sickness, critical illness or caregiver leave may apply. Generally speaking, such leaves of absence are unpaid unless company policy requires such leave to be paid. Further, it would likely be contrary to the Ontario Human Rights Code to discipline or terminate employees who take leaves related to COVID-19. The Ontario Human Rights Commission has stated that “Employers have a duty to accommodate employees in relation to COVID-19, unless it would amount to undue hardship based on cost, or health and safety.” For more information see: http://www.ohrc.on.ca/en/news_centre/ohrc-policy-statement-covid-19-pandemic
If an employee requests a leave of absence, the employer must provide the employee with a Record of Employment so that he or she can apply for Employment Insurance benefits .
The Federal Government has announced that the one-week waiting period for Employment Insurance sickness benefits will be waived for new claimants who are quarantined so they can be paid for the first week of their claim. For more information see: https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html
On March 19, 2020, the Ontario Legislature passed the Employment Standards Amendment Act (Infectious Disease Emergencies), 2020 (Ontario Amendment) to provide unpaid job-protected leave to employees in isolation or quarantine due to COVID-19, or those who need to be away from work to care for children because of school or day care closures or to care for other relatives. For a PDF copy of the Ontario Amendment, click here.
The Ontario Amendment provides job protection for employees unable to work for the following reasons:
- The employee is under medical investigation, supervision or treatment for COVID-19.
- The employee is acting in accordance with an order under the Health Protection and Promotion Act.
- The employee is in isolation or quarantine in accordance with public health information or direction.
- The employer directs the employee not to work due to a concern that COVID-19 could be spread in the workplace.
- The employee needs to provide care to a person for a reason related to COVID-19 such as a school or day-care closure.
- The employee is prevented from returning to Ontario because of travel restrictions.
An employee will be able to take infectious disease emergency leave to care for the following individuals:
- The employee's spouse.
- A parent, step-parent or foster parent of the employee or the employee's spouse.
- A child, step-child or foster child of the employee or the employee's spouse.
- A child who is under legal guardianship of the employee or the employee's spouse.
- A brother, step-brother, sister or step-sister of the employee.
- A grandparent, step-grandparent, grandchild or step-grandchild of the employee or the employee's spouse.
- A brother-in-law, step-brother-in-law, sister-in-law or step-sister-in-law of the employee.
- A son-in-law or daughter-in-law of the employee or the employee's spouse.
- An uncle or aunt of the employee or the employee's spouse.
- A nephew or niece of the employee or the employee's spouse.
- The spouse of the employee's grandchild, uncle, aunt, nephew or niece.
- A person who considers the employee to be like a family member, provided the prescribed conditions, if any, are met.
- Any individual prescribed as a family member for the purposes of this section.
The Ontario Amendment also makes it clear that an employee will not be required to provide a medical note if he/she needs to take the leave, which will not be subject to a predetermined time limit. However, the employer may require the employee to provide other evidence that is reasonable in the circumstances, at a time that is reasonable in the circumstances. In the future, this could include requests such as a note from the daycare or for evidence that the airline cancelled a flight, but not a medical note.
These measures are retroactive to January 25, 2020, the date that the first presumptive COVID-19 case was confirmed in Ontario. The Ontario Amendment is broadly worded to permit its invocation in the future for any designated infectious disease.
Most employees and employers in Ontario are covered by the provisions in the Ontario Amendment, whether they work full-time, part-time, are students, temporary help agency assignment employees, or casual workers.
On March 17, 2020, the Alberta Government adopted the Employment Standards (COVID-19) Regulation (the “Alberta Regulation”), which is a new regulation to amend the Alberta Employment Standards Code. The Alberta Regulation will provide employees with 14 days of unpaid leave if they are quarantined due to COVID-19. The full text of the new regulation can be viewed online at: http://www.qp.alberta.ca/documents/Orders/Orders_in_Council/2020/2020_064.pdf
The wording of the Alberta Regulation diverges from a prior press release of the Alberta Government, which announced that the leave of absence would be paid.
The Alberta Regulation contains the following provisions:
- all employees will be entitled to 14 days of unpaid leave if they are required to be “quarantined” due to COVID-19 (this extends the previous requirement of a 5-day unpaid leave of absence for personal health or family responsibility reasons);
- employees are considered to be “quarantined” if they are in any self-isolation or self-quarantine as a result of COVID-19, as may be recommended or directed by the Chief Medical Officer of Alberta.
Other notable aspects of the Alberta Regulation include:
- employees that are required to self-isolate or self-quarantine due to COVID-19 do not have to provide a doctor’s note to support their absence from work;
- there is no longer a requirement that the employee be employed for at least 90 days before taking this leave of absence;
- employees can still receive 16 weeks of unpaid long-term illness and injury leave under s. 53.97 of the Employment Standards Code (Alberta);
- employees are not required to provide their employer with written notice of the date they intend to return to work; and
- the Minister may extend the 14-day leave period if the Chief Medical Officer of Alberta recommends to enact further preventative measures against COVID-19.
The Alberta Regulation is retroactively dated to March 5, 2020, which means that it will apply to leaves of absence as of that date.
Layoff & Termination
If employment agreements provide a right to employers to effect temporary layoffs, then employers facing a slow-down or shut-down may be able to avail themselves of the temporary layoff provisions in the Employment Standards Act, 2000 (Ontario). A temporary layoff can last not more than 13 weeks in any period of 20 consecutive weeks or not more than 35 weeks in a 52 week period if certain conditions are met (see Layoff and SUB Plans below).
If employers do not have a contractual right to layoff employees or if employees are not recalled as required, then employees are considered to have been terminated and employers will be required to provide reasonable notice of termination or pay in lieu thereof and any required statutory severance pay. Subject to the wording of the employment agreement, additional notice or pay in lieu of notice may be required to be provided to the employee under the common law.
For more information see: https://www.ontario.ca/document/your-guide-employment-standards-act/termination-employment#section-3
Layoff and SUB Plans
In Ontario, the Employment Standards Act provides for temporary lay-off of up to 13 weeks in any 20 week period, and up to 35 weeks in any 52 week period if:
- the employee continues to receive substantial payments from the employer;
- the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan; or
- the employee receives supplementary unemployment benefits.
Recently, more employers have begun to consider using Supplementary Unemployment Benefit Plans (SUB Plans) to provide financial assistance to their employees during a period of layoff due to temporary stoppage of work, training, or illness, injury or quarantine.
A SUB Plan can be established by an employer or group of participating employers. Once the SUB Plan is registered with Service Canada, the SUB Plan allows the employer to top up an employees' employment insurance (EI) benefits during a period of unemployment due to a temporary or indefinite layoff. The amount of the top up can be up to 95% of the employee’s weekly wages/salary, less the amount of the employee’s corresponding EI benefits.
The benefit of using a SUB Plan (as opposed to continuing to make substantial payments to the employee in the ordinary course) is that the payments from a registered SUB Plan are not deducted from the employees’ EI benefits. Further, payments under a registered SUB plan are not considered as insurable earnings; therefore, EI premiums are not deducted. There is no minimum or maximum duration for which payments under a SUB Plan can be made.
More information about SUB Plans is available from the Government of Canada: https://www.canada.ca/en/employment-social-development/programs/ei/ei-list/reports/supplemental-unemployment-benefit.html.
Refusal to Work
Under the Ontario Occupational Health and Safety Act, employees may refuse to work if they believe the work is unsafe. An employee could legitimately feel unsafe if they have underlying health issues that place them at high risk or if the employer is not providing a work environment that permits social distancing and other COVID-19 precautions.
In Ontario, employees may only refuse to work of there is a “danger”. If an employee refuses to work, it is important to find out the specific reason the employee is refusing to work and for the employer to investigate to attempt to resolve the issue. Under normal circumstances if an employee continues to refuse to work, the employer or employee will report the situation to the Ministry of Labour to investigate. In light of the novel and fast-changing situation regarding COVID-19, it is unknown whether the Ministry of Labour is in a position to respond to COVID-19 related refusals to work.
Federal Work-Sharing Program
The Federal Government has announced temporary special measures to the Work-Share program to support employers and employees affected by the downturn in business caused by COVID-19.
Work-Sharing is an EI adjustment program designed to help employers and employees avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. The program provides income support to employees eligible for EI benefits who work a temporarily reduced work week while their employer recovers. The goal of the program is for all participating employees to return to normal working hours by the end of the work-sharing agreement.
An employer and its employees must agree to participate in a Work-Sharing agreement and must apply together. An application for a Work-Sharing agreement must generally be submitted a minimum of 30 days prior to the requested start date.
The COVID-19 temporary special measures will:
- Extend the Work-Sharing agreements by an additional 38 weeks, for a total of 76 weeks,
- Waive the mandatory 30-day waiting period for employers who have previously used work-sharing.
- Ease the recovery plan requirements.
For more information see: https://www.canada.ca/en/employment-social-development/services/work-sharing.html
Modifying the Terms of the Employment Agreement
During the course of the employment relationship, the employer or the employee may have reasons to amend or renegotiate the terms of employment. Ideally, the ability to make these changes should be contemplated by the provisions of original employment agreement. Any changes should be subsequently identified as amendments to the original agreement. While employers are generally entitled to make minor operational changes to an employee’s terms of employment, fundamental changes that negatively impact the employee or result in a significant change to the employee’s job, such as a change in the employee’s remuneration, job description or working conditions, should be made by providing the employee with fresh consideration, which must be something of benefit to the employee, such as a promotion, stock option, payment or bonus. Typically, the opposite occurs: changes are made unilaterally or without any new consideration. Employers who conduct themselves in this manner run the risk that the amended employment agreement will be unenforceable and may be faced with a claim for constructive dismissal.
Employers who cannot afford to pay employees during an uncertain slow down in business, may have no choice but to terminate some of their employees. Unless dismissed for cause, employers are required to provide their employees with reasonable advance notice of the termination of their employment. The purpose of giving notice is to allow the employee a period of time within which to secure other employment. An employer has the option of either providing the employee with “working notice”, whereby the employee is required to work until a specific date, or the employer may terminate the employee’s employment immediately and provide the employee with pay in lieu of notice of termination. Where the employer elects to provide the employee with pay in lieu of notice, the employer must compensate the employee for the remuneration and other benefits the employee would have received had the employee continued to work during the period of reasonable notice. Failure to provide reasonable notice of termination or pay in lieu of notice is known as wrongful dismissal.
In all Canadian common law jurisdictions, the employment standards legislation sets out the minimum amount of notice of termination an employer must provide to the employee. The length of the statutory notice period is based on the length of the employment relationship. For example, in Ontario, employees are generally entitled to one week’s notice of termination or pay in lieu of notice for each completed year of employment up to a maximum of eight weeks plus severance pay if certain conditions are met. However, unless the employee’s employment contract expressly limits the notice of termination to be provided to the employee to the statutory minimum, even where an employer terminates an employee with notice in accordance with the applicable employment standards legislation, the employee may also have the option of bringing a claim for additional pay in lieu of notice at common law.
At common law, the courts have held that employees are generally entitled to anywhere between 3 months and 24 months. In determining what constitutes reasonable notice, the courts have held that factors such as the employee’s age, position, length of service, remuneration, health, and the likelihood of the employee securing comparable alternate employment should be taken into consideration.
This situation is changing rapidly. New programs and changes to existing programs are being introduced on a daily basis. Please check our COVID-19 blogs regularly as we continue to update them.