These are difficult times. The changing landscape of COVID-19 will continue to riddle society with uncertainty. Business owners and employers are grappling with how to stay afloat, pay their employees and uphold their obligations to protect public health and safety.
Written by Charlene Cleary
Charlene Cleary is the principal and founding lawyer of Westshore Law in Victoria. Serving clients on Vancouver Island and the mainland, she enjoys helping other business owners work through existing issues and also to help prevent future problems. www.westshorelaw.ca
Layoffs – The Not So Good News
We often hear reports about layoffs in the news. This is usually in a unionized environment where the collective agreement allows the employer to lay off union members where there is a shortage of work. This is not how it works in the rest of the employment world, outside of unionized environments. In the employment law world, we are governed by the common law (judge made law) and the Employment Standards Act (BC). We also need to be mindful of the Human Rights Code of BC and WorkSafe BC legislation. The Employment Standards Act (ESA) contemplates “temporary layoffs”, defining it as a layoff that is temporary and not more than 13 weeks inside a 20-week consecutive period.
Unfortunately, it is not that simple.
Unless there is an explicit right to a temporary layoff in the employment contract, the provisions in the ESA are irrelevant, and any “temporary layoff” will be considered a termination of employment (with working notice or pay in lieu of notice owing). In reality, 99% of employers will not have contracts that contemplate temporary layoffs so they will not be able to rely on this exception. The other consideration is if the employee “agrees” to the temporary layoff – however, this is a grey area. Asking an employee to agree to being temporarily laid off has its challenges as it begs the question: are they agreeing – and what choice did they have? In non-pandemic times many of these situations would be construed as constructive dismissal, with damages for lost wages being owed to the employee.
We have no current precedent to rely on to predict how the courts or authorities will treat temporary layoffs due to the pandemic. Practically speaking, employers may consider being completely transparent with their employees about the situation and providing them the option of reduced hours or temporary layoff, as alternatives to outright dismissal. This may be the only choice they have – regardless of the liability risk. Employees who are temporarily laid off or terminated (without just cause, due to shortage of work) are eligible to apply for EI benefits.
Where employers are mandated to cease operations by government authorities, it may be that they are able to lay off or terminate their employees and rely on the concept of “frustration of contract” as a defence to constructive or wrongful dismissal. However, we are telling clients to tread lightly in this area and to get legal advice prior to making these types of decisions.
So where does that leave employers? In my view, it means we are doing our best to keep people employed for as long as possible, even if it means digging into our reserves. It also means that if we are forced to make hard decisions, we may need to take on the legal risk associated with reduced hours, temporary layoff or in some situations, termination.
Sick Leave & Self-Isolation
Employers are not permitted to discriminate on the basis of medical conditions. Employees who contract COVID-19 or who are showing signs of illness need to stay home and comply with Health Canada’s mandate on quarantine and self-isolation (Picture below). That said, they cannot be terminated or be unable to return, on the basis of their condition. Employees who need to be off due to illness and/or isolation are entitled to apply to EI for these particular benefits. For example, there is no need to produce a medical certificate for sickness benefits related to the virus and apparently people can be eligible for up to 15 weeks. It is not yet clear how this will play out – we are hoping for more direction from Service Canada as the situation progresses.
Employers are not obligated to pay people to be off sick or who are quarantined or isolating. Group disability insurance plans may cover some situations but that remains to be seen and will depend on the situation and particular plan.
Every situation will be different and we suggest you speak to your employment lawyer before making hard decisions or layoffs.
The hope is that once we get through this crisis (and we will) we can get back to doing what we do best. We are all grappling with the severity and far-reaching implications of this pandemic. All we can do is stay connected and do the next best thing. The silver lining, if there is one, is we might all emerge with incredible learnings, improved efficiencies and grateful for things we may have been taking for granted.
DISCLAIMER: These materials are general in nature and are not meant to be a substitute for specific legal advice. They are meant to provide a general overview of the law and should not be relied upon for making decisions in your workplace.
COVID-19 Information
Employment Insurance (EI) sickness benefits provide up to 15 weeks of income replacement and is available to eligible claimants who are unable to work because of illness, injury or quarantine (related to COVID-19), to allow them time to restore their health and return to work.
Canadians quarantined can apply for Employment Insurance (EI) sickness benefits. If you are eligible, visit the EI sickness benefits page to apply.
Service Canada is ready to support Canadians affected by COVID-19 and placed in quarantine, with the following support actions:
- The one-week waiting period for EI sickness benefits will be waived for new claimants who are quarantined so they can be paid for the first week of their claim
- Establishing a new dedicated toll-free phone number to support enquiries related to waiving the EI sickness benefits waiting period
- Priority EI application processing for EI sickness claims for clients under quarantine
- People claiming EI sickness benefits due to quarantine will not have to provide a medical certificate
- People who cannot complete their claim for EI sickness benefits due to quarantine may apply later and have their EI claim backdated to cover the period of delay
Contact the new dedicated toll-free phone number if you are in quarantine and seeking to waive the one-week EI sickness benefits waiting period so you can be paid for the first week of your claim:
- Telephone: 1-833-381-2725 (toll-free)
- Teletypewriter (TTY): 1-800-529-3742