March 19, 2020

Ontario and Federal Government of Canada Measures to Ease COVID-19 Employment and Business Disruptions

Ontario Job-Protected Leave for Employees

On March 17, 2020, the Ontario government declared a province-wide state of emergency that will affect how employers do business in nearly every sector of the economy.

In response to these unprecedented measures, the Ontario government has proposed legislation to enhance the existing emergency leave provisions under Ontario’s Employment Standards Act, 2000 to help ease the financial implications of the crisis for employers and employees.

If passed, Ontario’s new legislation will provide an unpaid job-protected leave to employees where:

  • the employee is under medical investigation, supervision or treatment for COVID-19;
  • the employee is acting in accordance with an order made under public health legislation;
  • the employee is in isolation or quarantine;
  • the employee is directed by their employer not to work; and,
  • the employee needs to provide care to a person for a reason related to COVID-19 such as a school or daycare closure.[1]

These provisions would stretch back to January 25, 2020, which is the date the first presumptive case of COVID-19 was confirmed in Ontario.

There is currently no limit on the amount of time an employee can take off as an unpaid job-protected leave under the proposed legislation.

Where employees do take an unpaid job-protected leave, they will not be required to and should not be requested to provide a medical note to substantiate their absence.

As these changes have not yet been passed into law, employers in Ontario should continue to provide emergency leave to employees pursuant to the existing provisions of the Employment Standards Act, 2000 [2].

Temporary Lay-Off

Although not a new measure being proposed in response to the COVID-19 outbreak, employers and employees should be aware of the option for employees to be temporarily laid-off as a result of business closures and disruptions.

Under the Employment Standards Act, 2000, employers may temporarily lay-off employees for up to 13 weeks during a 20 week consecutive period and then recall the employee to work.

The purpose of a temporary lay-off is to retain employees and preserve employee seniority instead of terminating their employment outright, which would trigger an employer’s termination pay and severance pay obligations.

Employers should review the employment contracts they have in place and seek legal advice to ensure temporary lay-offs are permitted under their agreements. Without specific contractual language, a temporary lay-off may be considered a constructive dismissal which would trigger termination pay and severance obligations.

Family Status Accommodation

Employers and employees should also be aware of their obligations and rights under Ontario’s Human Rights Code during the COVID-19 outbreak.

The Code prohibits discrimination in employment on the basis of family status. This means that employers must take measures to accommodate employees who require changes to their schedules or working arrangements as a result of family care obligations, up to the point of undue hardship.

Employers should not assume that the extraordinary challenges posed by the COVID-19 outbreak automatically result in undue hardship. Instead, employers and employees should engage in discussions concerning accommodation so that employees may meet their family care obligations and continue to perform their job duties, where it is possible for them to do so.

Employers should consider requests for accommodation on a case-by-case basis and make decisions in conjunction with any internal policies concerning paid or unpaid leave for sickness or other circumstances.

Note that human rights issues can be complex and employers or employees with any concerns stemming from family status and family care obligations during the COVID-19 outbreak should obtain legal advice regarding their specific circumstances.

Federal Government of Canada Supports for Employees and Small Business Employers

In addition to the proposed legislative changes in Ontario, the federal government of Canada is making financial supports available to employees and eligible businesses affected by the COVID-19 outbreak.

Temporary Wage Subsidy

On March 18, 2020, the federal government announced it is proposing to provide eligible employers a temporary wage subsidy for a period of three months.

Eligible employers include corporations eligible for the small business deduction as well as non-profit organizations and charities.

The subsidy will be equal to 10% of employees’ wages paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. [3]

Employment Insurance (EI) Sickness Benefits

EI sickness benefits provide eligible employees with up to 15 weeks of income replacement benefits paid at a rate of 55% of the employee’s weekly earnings to a maximum of $573 per week.

Effective March 15, 2020, employees with sufficient insurable hours of employment who are quarantined because of the COVID-19 outbreak will be eligible to receive EI sickness benefits immediately, foregoing the usual one week waiting period in which benefits are not paid. [4]

Employees claiming EI sickness benefits due to quarantine will not have to provide a medical certificate to the federal government to substantiate their claim.

New Emergency Care Benefit

Effective April 2020, the federal government will also provide income support to individuals who do not qualify for EI sickness benefits.

This benefit will provide income support to new employees who have not accumulated sufficient insurable hours to qualify for EI sickness benefits or for employees who work relatively few hours.

The Emergency Care Benefit provides eligible individuals with payments of $900 bi-weekly for up to 15 weeks.

Individuals eligible for the benefit include workers who do not qualify for EI sickness benefits and are themselves quarantined or sick with COVID-19 or must take care of a family member who is sick with COVID-19.

Individuals who do not qualify for EI sickness benefits and who are parents with children who require care or supervision due to school closures will also be eligible to claim the benefit.

Work-Sharing Programs

Employers may also consider making use of work-sharing programs which help employers avoid layoffs by having employees work a reduced schedule and share available work over a specified period of time while claiming employment insurance benefits to offset the difference in income.

Employees must agree to the arrangement and employers must demonstrate a recent decrease in business activity of approximately 10% and meet other eligibility criteria to participate. [5]

Business Taxes

The federal government will also be extending the amount of time for employers to pay income tax.

The Canada Revenue Agency 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, 2020 and before September 2020.

 

As the COVID-19 outbreak continues to evolve rapidly, members of our team will remain available to assist you with any legal questions you may have.

Louis Sokolov is a partner with Sotos LLP, Canada’s largest franchise law firm. He is the team leader for the firm’s employment practice area. Louis has been recognized by Chambers Canada and Canadian Legal LEXPERT Directory. He can be reached directly at 416.572.7316 or lsokolov@sotosllp.com.

Tassia Poynter is an associate with Sotos LLP. Tassia also regularly provides employment law advice to our clients. She can be reached directly at 416.572.7314 or tpoynter@sotosllp.com .

 


[1] Premier Ford Announces Job Protection for Workers during the COVID-19 Situation, News Release,

(March 16, 2020):

https://news.ontario.ca/opo/en/2020/03/premier-ford-announces-job-protection-for-workers during-the-covid-19-situation.html

[2] Employment Standards Act, 2000, s. 50.1.

[3] Department of Finance Canada, Canada’s COVID-19 Economic Response Plan: Support for Canadians and Businesses:

https://www.canada.ca/en/department-finance/news/2020/03/canadas-covid-19-economic-response-plan-support-for-canadians-and-businesses.html#Support_for_Businesses

[4] Coronavirus disease (COVID-19) – Employment and Social Development Canada:

https://www.canada.ca/en/employment-social-development/corporate/notices/coronavirus.html

[5] Government of Canada, Work-Sharing:

https://www.canada.ca/en/employment-social-development/services/work-sharing.html

https://www.canada.ca/en/employment-social-development/services/work-sharing/temporary-measures-forestry-sector.html