Governments, federal, provincial and now municipal, are implementing new measures every day and we know that it can be difficult to keep track. This message will, therefore, be the first of what we expect to be many.
At this time, we are going to discuss leaves, lay-offs and the new Canada Emergency Response Benefit.
Employees’ entitlements to leaves under the Employment Standards Act have been enhanced.
On March 19th, the Employment Standards Act was amended to: (a) update the provisions regarding declared emergency leaves; and (b) add a new leave called the infectious disease emergency leave.
Both leaves are unpaid, and are protected leaves under the ESA in the sense that the employee is entitled to take the leave and have his/her job preserved for them until the leave is over. Specifically, the employer is required to reinstate the employee to the position he/she held immediately prior to the leave if it still exists or to a comparable position if it does not. Employees are also entitled to accrue vacation time while on leave, and to benefits continuation. If there are employee contributions to benefits, then the employee must pay their portion of the premiums. They should be asked to confirm in writing if they would like to continue their benefits coverage and, if so, to provide post-dated cheques.
a) Declared Emergency Leave
Employees are entitled to a declared emergency leave if the employee cannot perform the duties of his/her position because:
an emergency has been declared under the Emergency Management and Civil Protection Act
- an Order is made under the Emergency Management and Civil Protection Act or under the Health Protection and Promotion Act that prevents the employee from performing the duties of his/her position; or
- the employee is needed to care for an ill family member and so cannot perform the duties of his/her position.
The declared emergency leave ends when the employee can resume the duties of his/her position, or when the declaration of emergency has been lifted.
The employer can require the employee to provide evidence “reasonable in the circumstances” to support the request for leave but cannot require a note from a health practitioner.
The recent Order of the provincial government that all places of business other than those on the list of essential businesses be closed put us into declared emergency leave territory. An emergency was declared and now an Order to shut down if you are not on that list has been made. As a result, if you have employees who are in your non-essential business and who cannot work remotely, then they are entitled to take an unpaid declared emergency leave. This right should delay the taking of any other steps with respect to their employment such as laying off or terminating. The leave would end on the day that the Order is lifted and the employee can return to work.
Only the employees who cannot work as a result of the Order are entitled to the leave. The others (those who are able to work remotely) can work and as a result are not entitled to the leave.
b) Infectious Disease Emergency Leave
An infectious disease must be “designated” in order for this leave to apply. COVID-19 has been designated, and the designation is retroactive to January 25, 2020.
Employees are entitled to an infectious disease emergency leave if the employee cannot perform the duties of his/her position because:
- the employee is undergoing testing/supervision/treatment for COVID-19;
- the employee is under an order made by the Medical Officer of Health or a Judge;
- the employee is under self-isolation, quarantine, any other control measure;
- the employee has been directed by the employer to go home and not work because the employer is concerned that the employee may infect others at the workplace;
- the employee is needed to care for an ill family member or a child at home because of the closure of schools or day cares; or
- the employee is affected by travel restrictions and cannot return to Ontario.
This leave ends when the personal circumstances of the employee that triggered the leave come to an end.
Again, the employer can require the employee to provide evidence “reasonable in the circumstances” to support the request for leave, but cannot require a note from a health practitioner.
Don’t forget that other leaves in the ESA may also be applicable. These would be the family medical leave, family caregiver leave, critical illness leave, child death leave, sick leave, family responsibility leave and bereavement leave.
If you are one of our unionized clients, you can probably skip this section. For those who are not…
The ESA provisions pertaining to lay-offs don’t often apply to private businesses. This is because the ability to lay off cannot typically be implied in an employment relationship; there must be either express authority (as a result of an employment contract, policy, collective agreement) or a well-established practice (seasonal work). Unilaterally laying off without having that authority is constructive dismissal.
We are therefore recommending that employers obtain express employee agreement to any lay-offs, and that the employees receive something in exchange for that agreement in order to ensure that there is a valid quid pro quo. To that end, some employers are offering a few days’ pay, others are viewing the lay-off itself as being of value as it provides the opportunity to be recalled. Either way, for most businesses, the consequence of not accepting the offer of lay-off is termination. We tend to think that most employees will accept a lay-off given the current circumstances but it’s difficult to predict what people will do.
There remains substantial debate amongst employment lawyers as to whether in these circumstances there may be an implied term in the employment agreement that an employer can place an employee on a temporary layoff. Given this debate, however, and the potential for some businesses to continue to operate with some employees working remotely, our recommendation remains that employers provide something in exchange for the lay-off.
There are two options for lay-offs:
- Not more than 13 weeks in any period of 20 consecutive weeks; or
- Less than 35 weeks in any period of 52 consecutive weeks.
In order to get the longer period, you have to continue to make contributions under retirement or pension plans or group benefits plans. If you can do the longer period, then that is the option we typically recommend. It gives you more time and keeps your employees on benefits that they may need.
The lay-off notice must be in writing.
Recalls can occur at any time within the lay-off period. If any lay-off exceeds 13 weeks, or reaches 35 weeks (whichever you have chosen), then the employee will be deemed to have been terminated. For the purpose of ESA termination entitlements, the deemed date of termination is effective the first day of lay-off. Remember that employees may also be entitled to common law reasonable notice.
CANADA EMERGENCY RESPONSE BENEFIT
We are all familiar with EI benefits. There is now a new income support available; the Canada Emergency Response Benefit (“CERB”). It merges and replaces the previous Emergency Care Benefit (up to $900 bi-weekly for up to 15 weeks to provide income support to workers who must stay home because of own/family sickness and who do not qualify for EI sickness benefits; and the Emergency Support Benefit (delivered through the CRA, if not eligible for EI).
The CERB will pay benefits for a maximum of 16 weeks. Those 16 weeks must fall before October 3, and can be backdated to March 15 (i.e., a 24-week period during which 16 weeks of benefits can be received). The amount of the benefit is to be determined by the Regulations made under the CERB Act, and as of writing, those Regulations had not yet been posted but is said to be $2,000 per month.
To qualify for the CERB, the employee must have:
- earned at least $5,000 in employment income, self-employment income, or maternity or parental leave benefits for 2019 or in the 12-month period preceding the day they make the application; and
- stopped working for reasons related to COVID-19 for at least 14 consecutive days within the 4-week period for which they initially apply. (The reasons can be personal sickness or quarantine, sickness of a family member who requires care, parents who must stay home without pay to care for children not in school/daycare because these have been shut down, employees who have no income due to the COVID-19 slowdown but who haven’t yet been laid off); and
- not received any income, any EI benefits, or any maternity/paternity/parental benefits within those 14 consecutive days. (This is subject to Regulations yet to be made, and so there may be the ability to receive some type of minimal income but we will have to see.)
The application portal will be available on April 6. We are told that benefits should be delivered 10 days after the application form is submitted. For comparison, EI waiting times are now in the range of 8 to 10 weeks.
Employees who have already been laid off due to COVID-19 but have not yet received EI benefits do not need to re-apply for the CERB. Their claims will be automatically moved over to the CERB, and benefits paid from this program first. If needed, these employees can apply for regular EI benefits after October 3.
Employees who are already receiving EI regular or sickness benefits would continue to receive those benefits and should not apply to the CERB. If their EI benefits end before October 3, 2020, then they can could apply for the CERB if they are unable to return to work due to COVID-19. Employees who have already applied for EI and whose application has not yet been processed do not need to reapply.
Employees who receive CERB benefits and are eligible for EI regular or sickness benefits can apply for the EI benefits after the 16-week period covered by the CERB benefits.
This is very new and so the details are still being worked out, but this is what we know so far.
Depending on income level, employees may be better off receiving CERB benefits ($2,000 per month) than EI (55%). At this point in time we do not know how the two systems will work together or whether the different amounts will be reconciled somehow.
And just this morning we learned that the wage subsidy for small and medium-sized businesses will cover 75% of eligible workers’ wages rather than the previous 10 per cent.
These are stressful times and things are moving quickly. We will do our best to keep you informed but please reach out with any questions. We are here for you.