Current and accurate as of April 14, 2020
As the situation with COVID-19 continues to unfold in Alberta and around the world, businesses are coming to grips with the reality that this situation will likely continue for longer than originally anticipated, and with much more broadly reaching effects. We are continuing to do our best to stay abreast of the latest developments so that we can assist our clients to navigate these increasingly difficult times.
This information is intended for non-unionized workers, so if you require information related to your unionized employees, please feel free to reach out and we will direct you to alternate sources of information.
*Please note that this is a rapidly changing and evolving situation, and that this information is based on our best knowledge at the current time. Due to the unique circumstances of every business, not all information is applicable to all employers, so please feel free to contact us with any questions.
April 14, 2020 - CANADA EMERGENCY WAGE SUBSIDY UPDATE
On April 11, 2020 the Federal Government passed legislation providing more details on the Canada Emergency Wage Subsidy. This program was introduced by the Federal Government in hopes that it would allow employers to re-hire their workforce. The Prime Minister and the Minister of Finance indicated that the intention of this program is to allow employees to continue to be paid and to be connected to their employers, to support our economy in remaining strong and sustaining the best position to rebuild rapidly when we are able to recover from the COVID-19 crisis.
Businesses will have to demonstrate a loss of gross revenue from March 15 to April 11 of 15%; from April 12 to May 9 of 30%; and from May 10 to June 6 of 30%. These losses must be demonstrated year over year from 2019. Alternatively, employers can choose to compare the revenue to the average revenue earned in January and February 2020. Whichever method is chosen; the business is obligated to continue to use that method for the duration of the program.
Q1: Does my business qualify for the Canada Emergency Wage Subsidy?
Eligible employers for the Canada Emergency Wage Subsidy include all sizes of businesses across industry and sectors. Business can be individuals, taxable corporations, non-profit organizations, registered charities and partnerships consisting of eligible employers. Public bodies are not eligible for this subsidy.
Q2: What is the loss of business revenue criteria and how is it calculated?
Businesses calculate their revenues in accordance with their usual accounting methods (either accrual or cash methods, but not both) and must use the same method for the duration of the program. Businesses are permitted to exclude revenues from extra ordinary items and amounts on account of capital. Employers will be required to retain records demonstrating their reduction in revenues and remuneration paid to employees.
Q3: How much does the Canada Emergency Wage Subsidy cover and are businesses required to pay the remaining 25%?
Businesses shall be eligible to receive 75% of the salary or wages actually paid to employees, up to $847 per week. There is no overall cap for the duration of this program, which shall be in place for 12 weeks.
Employees wages shall be based on their average weekly payment paid between January 1 and March 15, excluding any seven-day period that they did not receive any payments.
Businesses are encouraged to do all that they can to pay their employees the remaining 25%; however, there is no requirement of payment at this time. Employers are expected to make best efforts to bring employees back to their pre-COVID-19 wages or salary.
Q4: Is the 10% Temporary Wage Subsidy still available and if so, how does it interact with the Canada Emergency Wage Subsidy?
The previously announced 10% Temporary Wage Subsidy is still available for eligible employers to reduce the amount of payroll deductions required to be remitted to CRA. This program remains up to $1,375 for each eligible employee to a maxim of $25,000.
If an employer is eligible for both the Canada Emergency Wage Subsidy and the 10% Wage Subsidy, any benefit of the 10% Temporary Wage Subsidy paid in a specific period should be expected to generally reduce the amount available under the Canada Emergency Wage Subsidy for the same period.
Q5: How does the Canada Emergency Wage Subsidy interact with Workshare Program?
If an employer is eligible for both the Canada Emergency Wage Subsidy and the Workshare Program, the EI benefits received through the Workshare Program will reduce the benefit that the employer is entitled to receive under the Canada Emergency Wage Subsidy.
Q6: How do we apply for the Canada Emergency Wage Subsidy?
Eligible employers will be able to apply for the Canada Emergency Wage Subsidy through the Canada Revenue Agency's My Business Account portal. More details about the application process will be made available shortly.
April 6, 2020 - CHANGES TO THE EMPLOYMENT STANDARDS CODE
On April 6, 2020, the Government of Alberta announced the immediate implementation of temporary changes to Alberta’s Employment Standards Code (“the Code”). The stated purposes for these changes are to allow businesses to respond to current public health measures while supporting employees’ connection to the workforce and their ability to access federal assistance programs. In addition, these changes are expected to provide businesses with additional flexibility so that they can remain operational during the current public health and economic crisis.
This update outlines the main changes announced. However, we shall provide more information when the government releases the proposed amendments to the legislation. We encourage you to reach out to discuss how these changes impact your business operations.
Q7: What changes to the Employment Standards Code were announced by the Alberta government?
Extended Period for Temporary Layoffs
The maximum time period for a temporary layoff under the Code has been increased from 60 to 120 days. This change means that employees who have been laid off will not be deemed terminated on the 61st day of their layoff, which would normally require employers to pay termination pay under the Code and potentially additional common law notice to those employees. Rather, the permitted layoff period is extended to 120 days, allowing employers more time to adapt and be responsive to the situation as it stands in a few months’ time.
This change is retroactive for any COVID-related temporary layoffs which occurred on or after March 17, 2020.
Protected Leave and Benefits Extended
Employees who have been caring for children affected by school or daycare closures, or who have been caring for ill or self-isolated family members because of COVID will now have access to unpaid job-protected leave. The 90-day employment requirement has been waived and leave length has been stated to be “flexible”.
We shall provide further updates once more details have been released in relation to the protected leave periods.
Notice to the Minister of Labour
The requirement to provide group termination notice to the Minister of Labour when 50 or more employees are being terminated has also been suspended.
Improved Scheduling Flexibility
Employers are no longer required to provide 24-hours’ written notice of any shift changes, and if employees are subject to an averaging agreement, employers are no longer required to provide two weeks’ notice of changes to work schedules.
Duration of Changes
These temporary changes to the Code will remain in place for the duration of the current public health emergency order and as long as the provincial government determines that they are required.
April 1, 2020 - CANADA EMERGENCY WAGE SUBSIDY
On April 1st, 2020, the Minister of Finance released further details on a new wage subsidy program at 75%, called the Canada Emergency Wage Subsidy. The Prime Minister and the Minister of Finance indicated that the intention of this program is to allow employees to continue to be paid and to be connected to their employers, to support our economy in remaining strong and sustaining the best position to rebuild rapidly when we are able to recover from the COVID-19 crisis.
Q8: Does my business qualify for the Canada Emergency Wage Subsidy - The 75% subsidy announced by the Federal Government? What are the requirements and how do I apply?
How to demonstrate a 30% decline?
Businesses are required to establish that there has been a 30% gross revenue decline compared to the same month last year. Put simply, businesses will show what their gross revenue was for March, April or May 2019 compared to what the gross revenue is for March, April, or May 2020. Businesses will need to reapply each month.
How do we apply for the Canada Emergency Wage Subsidy?
Businesses will apply online through a Canada Revenue Agency portal, which will be available within the next 3 to 6 weeks.
Businesses will be required to reapply each month. Amounts will be provided to businesses as employers, not directly to employees.
Businesses will also be required to attest that, as employers, they are doing everything they can to pay their employees the remaining 25%.
What is the amount of the Subsidy?
The subsidy is 75% of an employees’ wages, up to a maximum of $847 per week, per employee. In order to qualify for this maximum amount the employee must be earning $58,700 per year or more.
What types of businesses qualify for the subsidy?
All businesses who are not publicly funded can qualify, regardless of size.
This includes partnerships, individuals, non-profits, and registered charities.
Though not specifically released yet, we assume businesses will have to have a business number and payroll program account with CRA, and must be paying salaries, wages, bonuses, or other remuneration to employees who are employed in Canada.
March 26, 2020 - EMPLOYER INFORMATION UPDATE #3
Q9: We have been forced to layoff a number of our employees on short notice due to the COVID-19 outbreak. When are we required to pay them their accrued wages and vacation pay?
The Employment Standards Code does not give any guidance on the payment of earnings when implementing layoffs. To be on the safe side, we advise compliance with the rules for payment of earnings on termination – namely, that they should be paid no later than three consecutive calendar days after the last day of employment. If you have some lead time for the layoffs and can handle it administratively, it may be beneficial to give employees their notice of layoff and final accrued pay at the same time, especially if the federal government has not yet waived the one-week waiting period for regular EI benefits.
Q10: If we are forced to cease operations, or cannot bring our employees on layoff back to work after 60 days, what do we need to consider aside from the payment of termination notice?
If you will be terminating 50 or more employees within a four-week period, the Employment Standards Code has special rules relating to group terminations with which you need to comply. The employer must give the Minister of Labour and the affected employees the following amount of written notice according to the number of employees affected:
- 8 weeks - 50 or more employees but less than 100
- 12 weeks - 100 or more employees but less than 300
- 16 weeks - 300 or more employees
This notice can be provided as working notice or pay in lieu of notice, or a combination of both. In the circumstances of a mass termination, the notice periods are based solely on the number of employees being terminated, regardless of the years of service that an individual employee may have.
Failure to give the required notice to the Minister of Labour can result in an administrative penalty being imposed on the employer. Once the Minister has been informed, staff will offer the employer information about programs and services available to the terminated employees through the governments of Alberta and Canada.
These rules may well be relaxed by the government at some point in future as a result of the current pandemic, however until that happens, employers will be expected to comply with the current rules.
Q11: We have operations in other jurisdictions where we will also need to layoff employees. Can we use the same form of layoff notice we have used in Alberta for our employees in other provinces?
We do not recommend using the same layoff notification form for employees in other provinces, as the rules in each province can differ widely. For example, in some provinces, advance notice of the layoff is not required, and in others, temporary layoffs are not permitted unless they are allowed by a collective agreement, employment contract or employee consent. In yet other jurisdictions, there is little practical difference between a layoff and a termination of employment, and the circumstances giving rise to a temporary layoff can differ widely. If you plan to implement layoffs in other jurisdictions, we recommend obtaining the opinion of a practitioner in that province. Through our Interlaw partner firms across the country, we are happy to assist you in clarifying your legal obligations when implementing layoffs in other provinces.
Q12: We wish to avoid laying off our employees for as long as possible, and many of our staff have agreed to reduce their work hours through a job-sharing arrangement. Are there any provincial or federal programs which can help to top up their earnings?
The federal government has recently made changes to the EI Work Share Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers. These changes have extended the eligibility of such agreements to 76 weeks, have eased eligibility requirements, and streamlined the application process. The purpose of this program is to assist employers to avoid layoffs, and to support employees who are receiving a reduced income as much as possible. Our understanding is that the employer has to apply for this program and that there may be some lead time to do so (although likely not as much as previously) so if you think that you might want to implement the program at some future time, we recommend that you take steps to register as soon as possible. Further information about the program and its requirements should be found on the Service Canada website.
Q13: Are there any provincial or federal government programs to assist our small to medium business survive the economic fallout of the COVID-19 pandemic?
There have been numerous initiatives announced by the provincial and federal governments recently to provide financial assistance to businesses affected by these unprecedented circumstances, and we understand that additional aid programs are currently under consideration. For the time being, however, these are some of the programs of which we are aware as of the present time:
Corporate income tax changes
Corporate income tax balances and installment payments will be deferred from March 19 until August 31, 2020 to increase employers’ access to cash so they can pay employees, address debts and continue operations.
Education property tax deferral
- Collection of non-residential education property tax for businesses will be deferred for 6 months.
- Municipalities are expected to set education property tax rates as they normally would but defer collection.
- Deferred amounts will be repaid in future tax years.
- Commercial landlords are encouraged to pass savings on to their tenants through reduced or deferred payments to help employers pay their employees and stay in business.
- Businesses capable of paying their taxes in full are encouraged to do to so.
WCB premium payment deferral
Small (1-49 employees), medium (50-199 employees) and large (200+ employees) private sector employers can defer WCB premium payments until 2021.
- For small and medium businesses, the government will cover 50% of the 2020 premium when it is due in 2021 – saving businesses $350 million.
- Large employers will have their 2020 WCB premium payments deferred until 2021, at which time their premiums will be due.
- Employers who have already paid WCB premiums in 2020 are eligible for a rebate or credit.
Utility payment deferral
- Residential, farm and small commercial customers can defer electricity and natural gas bill payments for the next 90 days to ensure no one will be cut off, regardless of the service provider.
- This program is available to Albertans who are experiencing financial hardship as a direct result of COVID-19. For example, those who have lost their employment or had to leave work to take care of an ill family member.
- The CRA will allow all businesses to defer, until after August 31, 2020, the payment of any income tax amounts that become owing on or after March 18 and before September 2020. No interest or penalties will accumulate on these amounts during this period.
- This relief applies to tax balances due, as well as installments, under Part I of the Income Tax Act.
- We understand that this deferral will happen automatically.
Business Credit Availability Program (BCAP)
There are few details available right now, so we are hoping for additional information in the next couple days. So far, we know:
- It is generally targeted to small and medium-sized businesses.
- Over $10 billion in loans will be provided through the BCAP program.
- BCAP will provide financing and credit insurance solutions to eligible businesses. It is intended to help businesses seeking financing to support their operations and maintain jobs.
Cooperation with participating private-sector lenders:
- BCAP is administered by the Business Development Bank of Canada (BDC) and Export Development Canada (EDC) in cooperation with participating private-sector lenders. Businesses seeking support through BCAP should contact the financial institutions with whom they have a pre-existing relationship, so that the financial institutions can assess the client's financial request. If the client's needs exceed the level of support the financial institution is able to provide, the financial institution can work alongside BDC to access additional resources (and/or EDC if applicable).
- The following financial institutions are participating in BCAP, and will work together with BDC/EDC to find credit solutions for creditworthy business clients who would otherwise have insufficient access to credit:
- Bank of Nova ScotiaBMO
- TD BankRBC
- National BankDesjardins
- Laurentian BankCanadian Bankers Association
- Canadian Credit Union Association
- The loans are expected to be provided at the current market rates, although this may change.
- The government is asking businesses to contact their own financial institutions directly. The financial institution will then assess the business' creditworthiness and loan request, then contact BDC "where appropriate."
Temporary Wage Subsidy
- To help prevent layoffs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months.
- The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer.
- Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees’ remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction.
- We are not certain at this time if this measure has actually been enacted, but you should seek advice from your accountant to ensure that your business qualifies and how to apply for it.
March 20, 2020 - EMPLOYER INFORMATION UPDATE #2
Q14: There has been a lot of confusion about Premier Kenney’s announcement that Alberta employees are now entitled to 14 days of paid sick leave. Has this situation been clarified?
Yes – on March 17, the Employment Standards Regulation was amended to state that an employee is entitled to unpaid leave for 14 consecutive days if the employee is under quarantine.
Q15: What is the difference between sick leave and layoffs for the purposes of allowing our employees to access EI benefits?
If an employee who does not have access to paid sick leave (or similar workplace accommodation) is sick, quarantined or forced to stay home to care for someone ill, they can access up to 15 weeks of EI sickness benefits, and the usual one week waiting period has been waived. No medical note is required to access these benefits. In addition, those employees who are quarantined or sick as a result of COVID-19, but who do not qualify for EI sickness benefits, may be eligible for receipt of the newly created Emergency Care Benefit, which provides a payment of up to $900 bi-weekly for 15 weeks. The details of this program have not yet been released.
In contrast, a layoff under the Employment Standards Code is a temporary suspension of employment for up to 60 days, during which time the employee may apply for regular EI benefits under the usual processes. At this time, this presumably includes the one-week waiting period before the benefits will commence. If the employee has not been brought back to work within 60 days, on the 61st day their employment is deemed to be terminated and the employer must provide pay in lieu of termination notice to the employee. The 60-day layoff period can be extended in certain circumstances, and it is possible that the layoff itself could trigger an allegation of constructive dismissal (both of which will be discussed below).
Q16: What do I have to include in my layoff notices?
Pursuant to the Employment Standards Code, a written notice of a layoff must be provided to each affected employee. This written notice must include the following:
- That the layoff is temporary and the date that the layoff takes effect (the “Effective Date”);
- That the Employee will be paid all amounts owing up to and including the Effective Date;
- That the Employee will be given seven days’ written notice of their return to work; and
- The notice must include the provisions of the Alberta Employment Standards Code, sections 62-64.
The employer is required to give two weeks’ notice of the layoff to all employees who have been employed two years or more, and one week’s notice for those employed for less than two years. However, if the notice cannot be provided, the employer must acknowledge that notice is being provided as soon as possible due to the “unforeseeable circumstances” of COVID-19 and the resulting health and government directives, which is permissible under the Employment Standards Code.
Q17: If the COVID-19 situation does not resolve, can I extend my employees’ layoffs beyond 60 days?
Maybe – the Employment Standards Code allows a layoff to be extended if, during the period of the layoff and with the consent of the employee, the employer pays the employee wages or an amount instead of wages, or makes payments for the benefit of the laid-off employee in accordance with a pension or employee insurance plan or similar plan. Once those payments cease, however, the employee is deemed to have been terminated and they are entitled to receive termination pay under the Employment Standards Code.
Given the economic uncertainty created by the COVID-19 crisis, the Alberta government may be forced to implement new rules to extend or waive the 60-day period for layoffs. Although there is no guarantee that this will happen, it could be a necessary step to curtail the financial crisis that many businesses are now facing, and we may hear more about this in the coming weeks.
Q18: If our business does not cut its operating costs during this time, we will most likely be forced to close our doors. Can we ask our employees to voluntarily reduce their work hours from full time to part time?
Generally speaking, imposing any such changes on an employee without their consent would most likely trigger an allegation of constructive dismissal, entitling the employee to sue for wrongful dismissal and entitlement to termination pay as required under the Employment Standards Code including common law notice (for further information, see our Employer Information Update #1). However, an employer and employee can mutually agree to changes in the employee’s conditions of employment, as long as those changes do not breach the minimum statutory requirements under the Employment Standards Code. If agreed upon, all such changes and the employee’s consent should be clearly documented in writing.
In these uncertain economic times, a collaborative approach to a reduction in hours may be the best way to manage the situation and the risks. By explaining the reasons behind the reduction in hours (ie. a desire to keep the business afloat without terminating employment where possible) employers may get more buy-in from employees and a willingness to agree to the reduction in hours. The situation may be more acceptable to employees given the implementation of the EI Work Sharing Program, which provides EI benefits to workers who agree to reduce their normal working hours as a result of developments beyond the control of their employers, by extending the eligibility of such agreements to 76 weeks, easing eligibility requirements, and streamlining the application process.
Q19: What are the risks of laying off employees?
Even though temporary layoffs are permitted by the Employment Standards Code, the common law does not recognize an absolute right to lay off employees. In the absence of a policy which informs an employee that an employer can temporarily suspend their employment, the common law looks upon a layoff as a constructive dismissal, which triggers an employee’s right to termination pay as required under the Employment Standards Code including common law notice (for further information, see our Employer Information Update #1). Therefore, in order to take advantage of the layoff provisions of the Code, an employer must have a contractual provision or layoff policy in place.
Having said that, the situation that employers are currently facing is unique, and it remains to be seen whether future courts will see things differently as a result of the COVID-19 crisis. It is possible that the courts will find that a reasonable person, in these unique circumstances of COVID-19, would not view a layoff as an indication that the employer no longer intended to be bound by the employment contract. However, as it stands now – this is the state of the law – as such, employers should maintain careful records to back up the exigent circumstances that led to the layoffs during this time. They should also explore whether alternative options may be available, such as a voluntary reduction in hours (see discussion above) and potential top ups of the employee’s wages through new EI benefit programs.
Q20: Can we simply terminate employees at this time?
While you can terminate employees at this time, this may be a very expensive undertaking for your business. Generally, an employer can terminate an employee at any time for any reason, as long as reasonable notice of termination is provided and there is no breach of the Alberta Human Rights Act in relation to the termination. In the current circumstances, this means that you must exercise particular caution with respect to any employees who are on sick leave, or who are required to care for children or sick family members.
However, unless the employee has a valid employment agreement which contains an enforceable clause limiting their entitlement to reasonable notice, reasonable notice entitlements are calculated according to the common law. The reasonable notice entitlements are influenced by many factors and can be as high as one month’s notice per year of service, or more. In addition, an employee is entitled to receive all amounts that they would have received if their employer had given them working notice instead of pay in lieu. This includes the value of all benefits, commissions, bonuses, etc. that they would ordinarily have received. The fact that COVID-19 has negatively impacted your business, and that you may not be able to provide each employee with pay in lieu of reasonable notice, does not make any difference (at this time at least) to an employer’s obligation to provide notice of termination. For further information, see our Employer Information Update #1.
Q21: How can we manage our employees who are working from home as a result of COVID-19, to ensure that they are continuing to work?
The best way to ensure that your employees are aware of your expectations while they work from home during this crisis is to establish and communicate clear guidelines and policies regarding remote work. These policies should address such things as confidentiality of information, hours of work, availability, ownership of electronic equipment, reporting requirements, etc. We can assist you in creating and implementing remote work policies in your workplace, so please feel free to reach out to us with any questions.
March 17, 2020 - EMPLOYER INFORMATION
Q22: Are we required to pay our employees who are required to self-isolate for whatever reason? What about sick days and vacation / holiday days?
At this time, employers are not required to provide paid sick leave to their employees. The government has extended the period of statutorily protected leaves from 5 to 14 days (ie: employees cannot be terminated) but has not made the necessary changes to the law to obligate employers to pay employees for these leaves.
As you may have heard, the UCP government recently announced that it was extending 14 days of “paid” sick leave to employees in Alberta who are unable to work, or are required to self-isolate, as a result of COVID-19. These changes affect the current statutorily protected sick leave under the Employment Standards Code, and in light of the crisis, employees will not need doctor notes, nor will they have had to work for 90 days previously to qualify.
However, there is some uncertainty with respect to the government’s implementation of “paid” leave – most importantly, who is going to pay for it? It appears that the UCP is hinging its declaration of paid sick leaves to a possible future extension of EI benefits by the federal government. The government is currently clarifying some of the ambiguity around this and we are hoping to have more information some time later this week.
We have been advising businesses that, in the long run, it is better for them to keep potentially sick people at home, rather than run the risk of the virus spreading through the workplace and potentially requiring a full scale shut down of operations. As such, for your employees who cannot work remotely, consider using accrued sick days to cover the difference between whatever EI benefits they receive and their regular salary. Some employers have voluntarily chosen to “top up” their employees’ EI sick leave benefits to cover the remaining 45%.
USE OF VACATION OR HOLIDAY DAYS: Given the recent amendments to the ESC regarding protected paid sick days, it is currently unclear if an employer will be able to use these days. If an employer is requiring employees to stay at home, then it may seem unfair to require the employee to use their vacation days to do so. However, there does not appear to be any impediment to requiring employees to use their accrued vacation currently.
Q23: Are employees required to work from home if we ask them to?
Yes, employees who can work from home can be required to do so, save in exceptional circumstances.
Pursuant to the Occupational Health and Safety Act, businesses are required to provide a safe and hazard-free workplace to their employees as much as possible. In light of the current concerns regarding COVID-19, businesses have been advised by the government and other agencies to take reasonable steps to encourage self-isolation among their staff, and to implement as many work-at-home scenarios as they can. Unless your employees are actually on medical leaves of absence due to the virus or otherwise, a business is at liberty to require those employees who have chosen or been asked to self-isolate to perform their work duties remotely, if that is possible. An unreasonable refusal or neglect to perform those duties should be dealt with in accordance with your standard disciplinary policies.
Q24: Our business is struggling, and we need to temporarily lay off some of our employees. The Employment Standards Code says that we need to give one- or two-weeks’ written notice of a layoff to our employees. Do we need to give that notice in these circumstances?
Maybe - the one or two weeks lay off notice may be shortened if there are “unforeseeable circumstances”, such as the current situation of an international pandemic. If the current situation makes it impossible to provide the required notice period, notice as soon as possible is required.
The Employment Standards Code requires any employer who wishes to implement a temporary layoff of its employees (ie. 60 days or less) to provide advance written notice to their employees of either one or two weeks, depending on the employee’s length of service. However, there is an exception to this requirement if there are “unforeseeable circumstances” which prevent giving earlier notice, when notice must be given “as soon as practicable”. We believe that there would be little dispute that the current health crises constitutes “unforeseeable circumstances” for the purpose of the Code. In this situation, giving notice of the layoffs as soon as practicable would likely be seen to be an acceptable compliance with the Code.
In any event, many businesses are trying to wade through all the uncertainty right now that it is probable that a lot of leeway will be given for this period. In any event, we recommend discussing options with legal counsel as there may be further obligations involved, such as when 50 or more employees are subject to layoff.
However, if your business has any employees who are on self-isolation leave for medical reasons, you may want to consider treating them somewhat more cautiously given that the 14-day sick leave period is protected by statute. Pursuant to the Employment Standards Code, an employer cannot layoff or terminate someone on a period of statutorily-protected leave. There is a great deal about these situations that we do not really know right now, and everything seems to be changing minute to minute, but we are recommending as a best practice to wait for the 14-day statutory period to elapse prior to giving your employees on self-isolation a layoff notice. Presumably, you will be issuing or have already issued a ROE for those employees, and they would be entitled to have the waiting period waived in those circumstance for the purpose of receiving EI benefits. While we are currently unsure if such a waiver will be implemented for regular layoffs caused by the COVID-19 outbreak, those rules may be changing as well. After the 14-day statutorily protected sick leave period expires, you can issue a standard ROE for the layoff.
Q25: What employment income replacement benefits are there for employees who cannot come to work because of COVID-19 and cannot work remotely?
There are programs in place to assist employees who may suffer a loss of income as a result of self-isolation or even business closures, and more programs are sure to appear soon as governments grapple with this crisis.
EI has now changed its rules so that employees are able to access EI sickness benefits without the usual waiting period. However, we believe that these benefits will still only cover the usual 55% of regular wages up to a capped amount. Also, it is unclear if the waiver of the waiting period will extend to people who choose to self-isolate as a result of the illness of someone else in the house, or as a precautionary measure. More information on the program can be found here.
The UCP government has urged the federal government to extend enhanced EI benefits for all employees on self-quarantine, even without a doctor’s note. Although changes to the programs and emergency federal funding have been announced to assist employees who have been affected by self-isolation and business closures, we are unaware of any new programs at this time.
In addition, the Alberta government has announced emergency financial assistance to those individuals who qualify – more information on this program can be found here.
Q26: Can we simply terminate employees? Or if we temporarily lay off employees but cannot bring employees back to work after the 60-day temporary layoff because of the economic problems caused by COVID-19, are we still obligated to give them notice or pay in lieu of notice?
If an employee is being terminated or an employer cannot bring an employee back to work at the end of the 60-day layoff period, they must give those employees notice of termination or pay in lieu of notice. To determine this notice period, employer must consider the following.
The Employment Standards Code sets out the absolute minimum statutory notice periods, and employees are entitled to pay in lieu of notice in accordance with their years of service.
Employers are required to provide additional notice or pay in lieu of notice over and above what is required by the Employment Standards Code. This particular notice period is often referred to as “severance”, but it really forms part of an employee’s overall notice entitlement. In order to determine what severance amount over and above the statutory minimums is payable, the law considers two factors:
First, if there is an enforceable employment agreement with a valid termination clause which sets out the amount of notice to be given on termination, that clause will dictate how much notice or pay in lieu needs to be given. Please note that the law has very specific requirements for these clauses to be enforceable, therefore, we strongly recommend that employer review any termination clause with legal counsel prior to relying on same.
Second, if there is no written employment agreement, if that agreement does not expressly address the matter of termination notice, or if the termination clause is not enforceable, the law turns to the common law. The common law is judge-made law which has developed over years of cases with similar circumstances. Where a court has determined that an employee is entitled to reasonable notice of termination, the following factors, among others, are considered in determining what a “reasonable” notice period is for an individual employee:
- The type of position held;
- The length of employment;
- Employee’s age at time of termination;
- Availability of similar employment; and
- Bars to finding replacement employment such as health issues or the state of the economy.
The potential impact of COVID-19 on the economy and individual searches for employment is still too speculative for us to fully realize the impact that this will have on the court’s view of reasonable notice entitlements. However, it is best to be prepared for the worst and presume that the economic impact of COVID-19 may result in a period of economic instability and potentially long searches for new employment.
As such, it is our strong recommendation that if you are considering terminating some or all of your employees without cause during this time, that you have someone review your employment agreements and/or assess potential notice entitlements prior to taking any action.
A final factor to consider is that an employer who chooses to layoff or terminate employees who self-quarantine for any reason is running two additional risks:
- Terminating an employee who is within a 14-day period of sick leave could potentially be considered a breach of the Employment Standards Code, given that the government has extended the period of statutorily protected sick leave, although it is hard to say for sure at this point; and
- If these leaves are related to an illness, potential illness or family care responsibilities, a layoff or termination could be viewed as a failure to accommodate under the Human Rights Act, potentially leading to a complaint.
Overall, given the current uncertainty surrounding the situation, it is hard to say for certain what the outcome would be if an employer either terminates or lays off their employees, but given the significant challenges posed by this unique situation, we feel that a lot of leeway will be given to those employers who may not manage perfect compliance, but make their best efforts to manage their businesses together with the interests of their employees.
As the above questions and answers have clarified, this may be an opportune time to consider your business’ employment contract and policy needs going forward, so that your business can weather future economic interruptions with greater certainty. Please feel free to reach out to us to discuss how we can help you in this regard.
Recognizing that things are changing rapidly and each business and workforce is unique, please do not hesitate to reach out with questions, concerns, or if we can be of assistance in any way. Also, please note that this information is current as of April 14, 2020 and will be subject to change following this date.
Please note that the following information relates to non-union employees only – if you have unionized employees in your workplace, please contact us and we will direct you to alternate sources of information.
This information has been provided by the Bishop & McKenzie LLP team.
Please stay safe and healthy!