The Employment, Labour and Equalities Group at Gowling WLG will be holding a live 'Ask our Lawyers' session on a variety of topics related to COVID-19 and the workplace challenges your business might be facing, whether you continue to operate as an essential business or have temporarily ceased operations voluntarily or pursuant to a government-mandated shutdown. The webinar will also address the various government relief programs that have been introduced by provincial governments and by the federal government over the last several weeks. These are unchartered waters we all find ourselves in; allow us to help you and your organization navigate through and weather the storm.
- Canada Emergency Response Benefit (CERB)
- Canada Emergency Wage Subsidy (CEWS)
- Temperature Screening and Wellness Checks in the workplace
- Temporary Layoffs
- Salary and/or hours of work reductions
- Positive COVID case protocol
- Considerations for foreign workers
- New leaves of absence and other changes to employment standards
ASK OUR LAWYERS EMPLOYMENT LAW AND COVID-19 ON DEMAND WEBINAR
Andrew:Okay. We'll get started now. So once again thank you everybody very much for joining us today for our Ask our Lawyers Employment Law and COVID-19 webinar. My name is Andrew Bratt and I'm a partner in our Toronto office and the leader of our Toronto employment, labour and equalities practice in Toronto. I'm pleased to be joined by two of my partners, Josee Gervais, in our Montreal office and Krista Schofer, in our Calgary office. Josee heads up our group in Montreal and her practice focuses on all aspects of labour and employment in the Province of Quebec, as well as with respect to Federally regulated employers. As I mentioned, Krista's a partner in our Calgary office, and like me, her employment practice is focused primarily non-unionized workplaces. What's unique about Krista is that she also practices immigration law and heads up our Western Canada immigration practice. Not only is Krista called to the Bar in Alberta but she's actually also called to the Bar in Massachusetts. She is qualified to, and does in fact, assist with both US and Canadian immigration matters. Now, given the nature of this presentation and the fact that it is virtual, we recognize that we fortunately have participants from all across the country, and many of you work for organizations that really are national in scope. For that reason we thought it would be really interesting and unique to have good representation from across the country. Hence the reason why've got coverage in Ontario, obviously Western Canada and Quebec as well. As some of you already know, and as you'll have seen, we all bring different skills and areas of expertise to the table. Myself, primarily, on the employment side, Josee on the labour side and Krista on the immigration side.
Just a few quick housekeeping notes before we get started. First and foremost, because we are online, unfortunately we're at the mercy of technology. I can tell you personally I've been on probably 2 dozen Zoom calls over the past 2 weeks and I don't think I've made it through one without being cut off. We've done everything we can possibly do to ensure internet connectivity and to make sure that our audio works and our video works, but I do want to sincerely apologize in advance in the event that something goes wrong and one of us does get cut off. If it happens, not to worry, another panelist will pick up where we left off and we will join again as quickly as we possibly can. But please do bear with us on the technical side. This session's a little bit unique and different from what we've done previously. As many of you will know, we typically pick a topic, prepare our presentation and then have a live session or webinar with a live Q&A. This one's a little bit different and it comes about because of the number of inquiries that our employment group has been fielding over the past couple of weeks. We've been absolutely inundated with COVID-19 related inquiries about a variety of topics ranging from temporary to salary reductions to privacy considerations associated with temperature checks and wellness checks in the workplace. Personal protective equipment, mandatory use of face masks. You name it. We've been asked the question. We though it would be really neat if we provided you, the participants, with the ability to actually dictate the content. Rather than us pick a topic and present, we thought we'd give you the opportunity to ask questions that are on your mind and that you're grappling with at the moment. What we did was we sent out, as you know, a survey with our invitation and we asked for you to submit the questions that we'd be answering. Now, initially our thought was that we would do a live Q&A session, but given the number of participants we were expecting, we figured it was going to become really difficult, logistically, to manage that. That's why we sent out the survey in advance. The other decision we made, and admittedly it was a tough one was to disable the Q&A feature, or the chat feature, and we did that because the reality is that we've received hundreds of questions. And I do want to take a moment to thank you all for taking the time to submit your questions. It's been wonderful to go through them. But given the number of questions we received, and the amount of content we have for today, we didn't think it made sense to enable the live chat feature because we just weren't going to have time to address any additional questions. That being said, I do want to make it a point to say that if you have any questions that you've asked that have not been answered, first and foremost I apologize. It's not that we're ignoring you. It's just that we can only get through so much material. I do want to encourage you to reach out to myself, Josee, Krista or any other member of the employment group after the session, or at your convenience, we'd be more than happy to assist you. So if you've asked a question and we haven't answered it I apologize. But the good news is we've got lots of material to through over the next hour and I do hope that you find it informative. Lastly, I should note that the information we're providing today is obviously informational purposes only. It's not intended to be legal advice. Because this a really high level overview it really is impossible to cover everything and to go through each unique circumstance. To the extent that there's something you are dealing with in you organization, by all means, do take this information away and give it some consideration but I would encourage you to reach out to you qualified legal counsel, whether that's one of us, or somebody else in our group, to discuss your specific situation. Finally, as many of you already know and will know, the COVID-19 situation is extremely fluid and it's rapidly evolving. The advice we're giving today is, quite frankly, not the same advice we were giving a week ago or 2 weeks ago. Things are changing very quickly and it's not because we're changing our minds or because we got it wrong. It's because the government is introducing new relief programs, additional interpretation and the rules are just changing day by day. So the information you're hearing today is up to date as of today. But by the time we get off this webinar it may very well be out to date, because there are government changes, literally every single day. So please do take that into account as you are making decisions within your organization.
In terms of the agenda for today, as you'll know from the invitation that we sent out we're going to be addressing the topics that you can see on the screen. I'm going to be addressing the CERB, the Canada Emergency Response Benefit. The wage subsidy program which we know a lot of employers are asking about. Salary reductions and then Josee's going to talk about layoffs and termination. Protocols for what to do if you have employees that either have been confirmed cases of COVID or suspected cases. Return to work and employee refusals. So individuals who refuse to work or are returning to work following a period of quarantine, for example. Lastly, Krista will talk about temperature screenings and wellness checks in the workplace. Foreign workers and other immigration considerations. And the various new leaves of absences and changes to employment standards that have been introduced across the country as a result of COVID. Just a quick note, we're not going to be going in this particular order. We're going to be mixing it up a little bit so you don't have to listen to me speak for half an hour then go onto Josee. But we did want to give you a sense of who's going to be talking about what topic. Without further ado, why don't we get started with the Canada Emergency Response Benefit.
The CERB is a Federal relief program that was introduced by the Federal government to provide support to employed and self-employed Canadians who are directly affected as a result of COVID. We received
Josee:So I think we just lost Andrew. I suggest that switch directly to termination and layoff question that we got and we can get back to the Emergency Response Benefit after. As you can imagine layoffs and termination are subjective interests these days so we have received question in that regard. The first one pertains temporary layoffs. How to properly implement temporary layoffs and should an employer provide notice or severance pay in the context of temporary layoffs. Of course this will depend on the Province in which the employer has activities. In Quebec I can mention that no prior written notice from the employer is required for a temporary layoff of less than 6 months. The threshold is really 6 months. However, when you are implementing temporary layoffs in Quebec it is recommended to do three things. So first, you should inform the affected employees in writing. The letter should indicate on which the date their layoff will be effective, and if known, the recall date. Most of the time, to be honest, in these days and depending on the circumstances the date will be unknown. After that you need also to indicate what will happen with benefits. So Quebec employers do not have the obligation to continue benefits during a temporary layoff. Collective insurance coverage and pension plan could be suspended. However, it is recommended that quite common to do so, to continue them, just to reduce the risk of constructive dismissal complaint which we'll address later. You must know that if the temporary layoff ends up being for more than 6 months, then reasonable notice of termination will be owed to the employees in Quebec. So this will be based on the employee years of service, position and age to allow him to find other alternate equivalent employment. I will now just leave it to Krista and to Andrew the temporary layoffs in their Province.
Krista:Thank you. Hi everyone. In Alberta, under the code, employer's must provide employees with either 1 or 2 weeks of notice prior to the layoff. This period of notice depends on the employees length of service. There is an exception under the code where there are unforeseeable circumstances. We are probably in that realm right now but the Alberta Employment Standards hasn't actually confirmed that. So there's a little bit of risk with not providing notice. But I know a lot of employers are implementing the layoffs without notice right now. I do recommend that employers provide employees with as much notice as possible before implementing the layoffs. But, again, this isn't a reality for a lot of employers right now. Andrew, you want to jump in?
Andrew:Sorry guys for getting cut off. I told you that was going to happen but hopefully it won't happen again. In Ontario there's no requirement to provide notice in the event of a temporary layoff. That being said, layoffs are, generally speaking, considered to be a constructive dismissal unless you've got an explicit right to do so in the contract. But again, we are in unusual circumstances and we do think the courts will either relax the rules or legislation will be changed retroactively to allow for these layoffs, but notice is not required nor is severance, unless and until the layoff becomes a deemed termination.
Josee:The next question we got on termination and layoffs pertain to collective dismissal or mass termination provision in the legislation. Do they apply to temporary layoffs? In Quebec, in order to trigger the mass termination provision of the act respecting labour standard you need four elements. So, you need the termination of ten employees or more in the same establishment, laid off for 6 months or more within 2 consecutive months. It means that the temporary layoffs of less than 6 months will not be taken into consideration in order to determine if mass termination will apply. However, you need to know as an employer that if your layoff ends up being for more than 6 months, then automatically if you have, for example, laid off twelve employees temporary, after 6 months it will trigger the mass termination provision and you will be required to give pay notice because it's impossible to provide working notice to an employee while the employee's already laid off. Andrew and Krista, do you want to comment for your Province?
Krista: Sure. For Alberta, yes, we typically see that group termination provisions are triggered with layoffs. It should be noted that due to COVID the Alberta government has relaxed the rules for group terminations. The special notices to unions and employees is not currently required but employers do still have to notify the minister as soon as is practical for any terminations of 50 or more employees. Andrew?
Andrew:... Alberta the difference being that they don't get triggered by layoff. In Ontario, if you're going to conduct mass layoffs you don't need to notify the ministry or abide by the mass formation provisions of the Employment Standards Act unless and until the layoffs become deemed terminations after a period of time. 13 weeks to 35 weeks, depending on the circumstances.
Josee:This brings us to the risk of temporary layoffs being qualified as constructive dismissal. This is a question that we got a lot. It was a concern from the beginning of the COVID pandemic in each of the Province. It's also topic where Quebec defers from the rest of Canada. So in Quebec, it appears from case law that temporary layoffs are allowed and are not automatically qualified as constructive dismissal, even if we will admit that some author different position on that topic. If, of course, your employment agreements specifically provides for the possibility of a temporary layoff, then it's the best case scenario. But to be honest, those scenario almost never happens or not when we're involved. If you don't have such an agreement or provision in your agreement, in Quebec we can say that considering that the Act respecting labour standards provides for the possibility of temporary layoffs of less than 6 months. Considering also that Quebec case law considered that such temporary layoff do not constitute a substantial modification to an employee's working condition. We believe that in the present pandemic context, and considering the impact on the economy, it's really unlikely that in Quebec case law will evolve towards qualifying temporary layoffs as constructive dismissal. Andrew has mentioned that it is quite different in Ontario and I think Krista can explain how it is treated in the rest of Canada.
Krista: Perfect. So even though layoffs are permitted under the applicable employment standards legislation in Provinces outside of Quebec, there's still a risk of constructive dismissal at common law, where an employer imposes these layoffs on employees. Just as a quick summary, a constructive dismissal occurs when an employer unilaterally changes a fundamental term or condition of employment. This is exactly what is happening with a layoff. Significant reduction of hours and reduction in pay. So elimination of hours and elimination of pay. Typically the only ways around this constructive dismissal risk is where there's this express provision in the employment agreement that permits a layoff, similar to what Josee had mentioned, usually employment agreements don't have this provision. The other way is to obtain consent from employees to be laid off. It's one of those things where there is a legal risk but many employers are more focused on the practical realities of the economy, and their business, and there must may not be another option other than laying off their workforce. On the other side of this a lot of employees would prefer to be laid off, even though they're not working, as opposed to being terminated from employment.
Josee:The last question that we will address regarding layoffs and termination is the recall rights in, of course, non-unionized environments. So can an employer decide not to recall all of its employees after a temporary layoff or use temporary layoffs to terminate poor performers? This is a question of interest, I think in Quebec, because we have a specific provision protecting the employment of employees with more than 2 years of service. The answer is yes but not in all circumstances. An employer may decide to eliminate positions and not recall everyone to work including poor performer. But in Quebec, since employees have a statutory right not to be dismissed without just cause if they have more than 2 years of service, an employer must be very careful because the employee can file a complaint and seek reinstatement if he believes that his termination was not due to a real elimination of position, but rather a scheme put in place to get rid of him, it could be for performance. So this means that if the employee is not being recalled because his position is eliminated, the employer could be required to explain to the labour board if a complaint is filed, why the employee was not recalled and why he was chosen over his colleague to be terminated. He will have to explain the objective criteria that he used to select the employees that would be recalled. Objective criteria recognized by case law are the following. Tt could be seniority, it could be for versatility, it could be documented performance, of course it cannot be any discriminatory criteria such as age, or disability, and the employer must also be careful because, for example, if an employee with undocumented performance issue is not being recalled and is, in fact, being replaced, if this employee has more than 2 years of service he will likely be successful in filing complaint, seeking reinstatement because the employer will not have cause for termination based on the criteria to terminate for cause in the context of poor performance, and it will not qualify as an elimination of position because the employee will have been replaced. Of course, for employees with less than 2 years of service, and for true elimination of position that are being made following are by using very objective criteria, then the employer can totally decide not to recall all employees, and then the employer will have to provide reasonable notice of termination to employees that are not being recalled.
Andrew:Okay. We're going to flip back to the Canada Emergency Response Benefit and sorry for getting cut off guys. Fingers crossed that I stay online this time. I should mention that if you don't see one of us, if you don't see our video live, it doesn't mean that we've been cut off. We've decided that we're going to stop our video when we're not speaking so that we don't distract other people. As I was mentioning before I got cut off, the CERB, the Canada Emergency Response Benefit program is a $2,000.00 benefit for a 4 week period. Meaning $500.00 a week and the maximum benefit period is 16 weeks. So an individual who qualifies for CERB can receive up to four payments of $2,000.00 each. There are seven different CERB periods. It runs all the way from March 15th through September 7th, give or take, but that being said you can only qualify for 4 of those 7 periods. It doesn't have to be consecutive. We've received a number of questions about eligibility. Who is eligible for CERB? The criteria are that you have to be 15 years of age. You have to have stopped working due to COVID. If you stop working for reasons unrelated to COVID, generally speaking you're going to go under the regular employment insurance scheme, as opposed to CERB. You have to have earned at least $5,000.00 in employment income, or self-employment income, either in the 12 month period immediately preceding your application, or in calendar year 2019. Here's the big one. You must not have quit voluntarily. It sounds reasonably straightforward but this is an important one and I've seen some situations where the CRA has denied people who have left the workplace voluntarily. So they work for, for example, essential businesses that are still operating but they themselves have determined that they should not be working and they're fearful of contracting the virus, which is fine. You're allowed to have that fear, obviously, and most employers are being very understanding and accommodating in allowing people to take leaves, but in circumstances where you, yourself, decide that you're going to leave the workplace, in the absence of being told by a public health official or a doctor or some other qualified medical practitioner, that you should not be working then you do run the risk of being ineligible for CERB, because you made that choice voluntarily. Now I'm over simplifying. There are circumstances where you leave the workplace where you will qualify for CERB. For example, if you're quarantining or if your employer has shutdown because of a government mandated shutdown, but generally speaking, if you decide that I'd rather sit at home and make $2,000.00 a month rather than go to work and make, for example, $2,500.00 a month, that's not a circumstance in which you'll qualify for CERB, assuming that the CRA looks at your application carefully and doesn't just rubberstamp it. It's really important, as an employer, to be making sure that if you're being accommodating and you're being flexible, which, in these circumstances I recommend that you should be, that you do at least notify your employees in advance that if you're going to go off voluntarily you might want to check with the CRA first to make sure that you actually qualify. I guess practically speaking, if they don't qualify, they'll probably say they want to come back to work. But, just keep that in mind. Now, when submitting your first claim, you have to have not earned more than a $1,000.00 in employment income or self-employment income for 14 consecutive days within that 4 week period. Say for example, where we're looking at the first period, which is March 15th to April 11th, if you were laid off, for example on April the 8th, and you were only without income for 3 days, in all likelihood you earned more than a $1,000.00 of income during that period, you will not qualify for that first period and you'll have to wait until the second period, being April 12th to May 9th, in order to apply. So for that first qualifying period you have to have had no more than $1,000.00 in 14 consecutive days. Going forward, for every subsequent CERB qualifying period, you have to have earned no more than $1,000.00 of employment or self-employment income during the entire 4 week period. Now, as some of you will recall, when the program was first announced several weeks ago it initially came out and it required that you earn zero dollars in employment income, and if you earned even a $1.00 then you would be disqualified, or disentitled, to the CERB during that period. The government made an announcement about a week ago or so, I think now, to include this provision to provide additional support for workers who have had their hours slashed dramatically, have had their wages cut, or frankly, people who have been laid off, they're picking up part-time gigs, working for essential businesses like grocery stores, because it made no sense and it was dissuading everybody from actually picking up those part-time hours elsewhere because they'd be disqualified from CERB. You can earn up to $1,000.00 but when you think about it, $1,000.00 a month is $12,000.00 a year. It's not a lot of money. It's not going to cover a whole lot of people who are working part-time, unless it's really, really part-time, a shift here a shift there. So keep that in mind as you're dealing with things like paying employees for public holidays while they're on layoff. Or paying them for vacation, approved vacation. Any dollar you pay them goes towards that $1,000.00 and could disqualify them from the CERB.
The second question we got with respect to CERB is can employers register a supplemental unemployment benefit plan to top up employees CERB payments? So for those of you who are not familiar with sub-plans, a sub-plan is essentially a plan that you register with Service Canada, that allows employers to provide additional income support in the form of a top up for individuals who are receiving EI. In some instances you don't need a sub-plan so, for example, for maternity leave you could have your own top up plan without having to register it with the government. But for every other circumstance, or almost every other circumstance, if you don't register that sub-plan with the government, then any dollar that you pay to an employee who is in receipt of EI, the government will take 50 cents of that dollar and will, generally speaking, and will deduct that from their EI claim. If you pay them $1,000.00 they'll take $500.00 and they'll deduct it from whatever EI benefit they're entitled to. We've received a lot of questions about whether or not sub-plans, which allow you to make those top ups without their being a clawback, can be used and registered for the purposes of topping up CERB payments. The answers that we've received thus far, from both Service Canada and from the CRA, is no. That doesn't mean it's not going to change and, frankly, I think it will change. I think it has to change. I don't know why the government would want to limit an employer's ability to provide much needed assistance in a time of need, but at this stage the answer has been absolutely no, and the reason why is that sub-plans only work for EI. EI and CERB are two different programs. CERB is administered by the CRA, the Canada Revenue Agency, and EI is administered by Service Canada. They're completely separate and so, as a result of that, if you're going to pay anybody any income while they're in receipt of CERB, you're subject to that $1,000.00 rule. Anything over and above $1,000.00 and they're disqualified.
Then the final question with respect to the CERB is can you choose whether to apply for regular EI benefits as opposed to the CERB. We've gotten this question a lot. The reason we're getting this question is because in many instances the EI program provides more money, per week, then CERB. If you maxed out on your EI benefit, which is essentially a percentage of your gross wages, the most you can receive in EI is $573.00 per week. In normal circumstances, if you're laid off or terminated, and say for example you earn $80,000.00 a year and you'll qualify for the max, you would actually receive $573.00 a week. Under CERB you're only getting $500.00. A lot of people have been asking can we have our employees, or can individuals apply for EI instead of CERB, and the answer is no. If you've lost your job, or you're not working as result of COVID, you have to go through CERB. In fact, people who filled out their applications before the online portal went live, and filled out the application for EI have since been redirected to CERB. There are very limited circumstances right now in which you can collect EI. A couple of examples that come to mind are if you still qualify for EI sickness benefits, which are different from EI regular benefits, or if you're on maternity leave, for example, or parental leave, you'll still go through the EI scheme. Everybody else, essentially will go through CERB. That being said, I should not that, as I mentioned earlier, the CERB is a 4 week program for up to 4 months. At the end of that 4 months you will have capped out. You will have earned as much as you can earn under CERB. If you're still not working beyond that point, you'll be given the opportunity to then go onto the regular EI scheme. So it's not CERB or nothing. It's CERB or nothing for now followed by EI at the completion of that 16 week period. So that's it for CERB and we're going to move on to the next question now.
Krista: So the question was asked, as an employer can we do temperature screening and wellness checks of employees and or visitors. So the answer to this is yes. You certainly can do wellness checks and this may actually now be a prudent measure to take, to comply with OHS, Occupational Health and Safety requirements, and other risk mitigation techniques that are in a lot of those Provincial emergency orders that we're seeing. I won't get into that side of it. The side I will be speaking about is just whether those wellness checks amount a potential privacy risk, in terms of the personal information you're collecting as part of the check. So privacy laws do continue to apply, however, the Provincial and Federal Privacy Commissioners have generally stated that such privacy laws should not be applied as a barrier in the course of dealing with this pandemic.
Moving onto the next question, in terms of the protocol that should be in place for the wellness checks, it's definitely recommended that you have a policy in place that clearly outlines the purpose of the wellness check. The process that will be followed by those people implementing the check, the specific data that will be collected, how such data will be used and to whom it may be disclosed. The policy should include details of risk mitigation techniques like safe distancing, that you'll try to maintain as much as you can when implementing these wellness checks, and other measures like sanitation. The policy should also ensure that you have a process for if an individual does test positive or if the individual refuses the test. It's also recommended that as part of this protocol you get informed consent from the individuals whose personal information you're collecting. You can do this simply by informing each person of why you're collecting the personal information. Why you're conducting the test. What information will be collected and how the information will be used and to whom it will be disclosed. It's also important that when you're stating the purpose of why you're collecting the information, you don't then use that information for a different purpose down the road. For example, right now you're collecting it to ensure that people entering your workplace are well enough to do so. You can't 6 months from now use the information you've collected to document an employee that's been tardy or late arriving at work. You can't then use these tests as a way to backup this person having consistently been late for work.
In terms of the next question, in terms of what you can ask employees or visitors when conducting these wellness tests, the questions and information collected should be limited to what is reasonably necessary to fulfill the purpose. In terms of the relevant data for wellness checks this would likely include the temperature results, the individuals name, maybe the time of testing, and then the response to those questions that you're asking. An example of the questions you're likely asking are have you travelled outside of Canada in the last 14 days? Have you had any of the flu like symptoms in the last 14 days? Have one of your immediate family members had one of the symptoms of COVID? In terms of recording you need to also be aware of how you're recording the information, where it will be stored and who will have access to that information. If you can anonymize the information, prior to recording it and storing it, that's ideal. Once someone tests negative, if you can anonymize it by even using an employee number or, even better, just not likening it to a specific employee, that would be ideal. The facts that you shouldn't be recording anything that isn't specifically relevant, or reasonably required, for that purpose of conducting the wellness check. For example, you shouldn't be recording a person's age, ethnicity, or personal characteristic about that individual. Josee, did you want to add something? No. Okay. I just saw your video. Okay. I think we're ready for the next slide.
Andrew:Okay. Next up is the Canada Emergency Wage Subsidy. A really hot topic these days given the significant relief that it may provide to eligible employers. I want to preface it by saying that we actually have a dedicated business relief team, made up of a number of lawyers, including tax professionals that have really become subject matter experts in this area. So to the extent that you've got really involved situations or difficult questions about accounting principals, by all means feel free to reach out to us after, and I'll gladly put you in touch with the appropriate folks. That being said, I've been looking at this program for quite some time now, and can answer the questions that you see on the screen. First and foremost, how do you determine eligibility under the wage subsidy program? To be eligible you have to be an eligible employer, and I'll come back to each of these terms in a moment, you must have experienced an eligible reduction in revenue, and by revenue we're talking about revenue from carrying on business in Canada, and you have to have had a CRA payroll account number on March 15th, 2020. First off, eligible employers. It's a pretty broad definition. It includes individuals, so sole proprietors. Taxable corporations, so any corporation, essentially, that has a tax number and that pays income taxes, and certain non-taxable entities, for example, non profits, boards of trade, chambers of commerce, etcetera. It also applies to registered charities, partnerships and basically anything other than a public institution. So, the point is it's a very, very broad list of employers that can qualify for the wage subsidy. It doesn't matter if you're big or small. The size of your payroll is irrelevant. The number of employees is irrelevant. You could have two people on payroll. You could have a hundred thousand people on payroll. There are no limitations. It's also really critically important because if you have a hundred thousand people on payroll there are no limits on the number of employees for which you can claim the subsidy. It really does have the potential to provide some much needed relief to big and small employers. I should also note that foreign control is irrelevant. As long as you have employees in Canada, and you are generating revenue from businesses carried on in Canada, you will qualify even if you're a foreign controlled entity. All that to say the scope and application of the program is extremely broad. In terms of revenue reduction, so the general rule and it's changed a little bit over the last couple of weeks, the general rule is that in order to qualify for the first claiming period, which is March 15th to April the 11th, you have to have experienced a reduction of revenues of at least 15%. The way you look at whether or not you've experienced a reduction is one of two ways and you have the choice to make. You can either compare year over year revenues. So when comparing March of 2020 you look at March of 2019 and did you experience reduction of at least 15%, month over month, sorry, year over year in that month. When looking at the April claiming period you would then compare April of 20 to April of 19 and for May you would do the same, May of 20 to May of 19. However, the government has now provided, or the CRA I should say, has now provided us with the opportunity of instead of looking at year over year, if you'd like you can look at the average revenues earned in January and February of 2020, and then compare that number to March, April, May. So again, for the March claiming period you compare revenues in March of 20 to the average revenues generated in January and February, of this year. In April you would do the same. April 20 versus Jan, Feb and in May you would compare to Jan, Feb. You should note that the revenue reduction threshold increases from 15% to 30% in April and in May. So for March you only have to show a 15% reduction. In April you have to show a 30% reduction and, again, in May you have to show a 30% reduction. Just to be clear, the claiming periods that I keep referring to are March 15th to April 11th, that's the first one. April 12th to May 9th, is the second one and May 10th to June 6th, is the third one. So when I say for March you have to be down 15%, it's in order to claim the subsidy for wages paid from March 15th to April 11th. One big feature of the program that was announced somewhat recently is that if you qualify in any claiming period, you will automatically qualify in the next claiming period. That's really important because there are a lot of businesses that are down, for example, 18%, 20%, 22% in March, that will not be down 30% in April, which I suppose is a good problem to have. But even if you don't meet the 30% revenue reduction threshold in April, because you qualified in March you will automatically qualify for April. What that means is that you're allowed to claim the subsidy for any wages that you've paid to your employees in the first period, March 15th to April 11th, and in the second period, April 12th to May 9th. Then to qualify for the third period, May, you'll have to show a 30% reduction either in April, because again, if you qualify in one period you then qualify the next, or in May. So just to summarize, it's a 15% reduction in March, 30% in April and May, but if you qualified in one period you automatically qualify in the next period. Businesses can qualify in one, two or all three periods depending on the numbers. That's the revenue reduction.
Now very quickly, in terms of the amount of the subsidy, it gets pretty technical and the formula is quite complex, but generally speaking it's 75% of eligible remuneration paid to employees to a maximum of $847.00 a week. So if you have an employee making $80,000.00 a year, the wage subsidy for that person will be $847.00 a week, irrespective of the amount you paid that person. That being said, I said it was somewhat complicated, and that's because there are special rules for employees that are not dealing with the employer at arms length. So shareholders, owners, etcetera. There are also special rules for employees who have had their salaries reduced as a result of COVID. Suffice it to say, the formula operates such that you actually can have a circumstance where you reduce somebody's pay down to a certain threshold, and so as a result of that you actually can receive 100% of the amount you pay them. What I would suggest is the CRA has put out a very helpful online calculator and they did that, I think, it was just yesterday or 2 days ago, we are going to make that link available to you in a few moments in the chat feature of this webinar. I would encourage you to go online, check it out. It will help you determine eligibility and it will help you calculate the subsidy based on your specific circumstances and the amounts of money that you paid to your employees, both pre and post-COVID.
Okay, the second question is how and when can we apply for the wage subsidy? The information just became available to us a few days ago, thankfully, so we've now been told that the online portal will go live on the 27th of April, being Monday. You will apply through the My CRA Business Account. You'll also be able to have an authorized representative apply for you. For example, an accountant, so long as they have the level 3 authorization which is the highest level. Bottom line, you apply online, it's an online portal, it'll be live on Monday, and what you can do now to get ready is that you can make sure you have your My CRA Business Account. If you don't, go ahead and register, and you should also start gathering the documentation that you will need to support your reduction in revenues. So your financial information and your payroll information. Have all that information ready because you're going to have to have that in order to apply for the wage subsidy. The other thing you want to make sure to do is determine whether or not you're going to use the month or over month analysis, that we talked about earlier, or whether you're going to look at January, February revenues. Once you pick one of these baseline revenue options you're going to have to stick to it throughout. You can't flip flop between periods. So, pick one that makes sense, given your circumstances, and go with it. The other thing you can do right now is figure out whether you're going to use, and I'm getting somewhat technical on you here, but figure out whether you're going to use the cash method calculating revenues or the accrual method. Cash method being you book revenues when you receive the cash. Accrual being you book revenues when you bill and not necessarily when you receive the cash. Again, that's an election you get to make, but you need to stay consistent all the way throughout.
Finally, and I'm going to do this one really quickly, are we required to hire back or recall employees that were previously laid off, in order to qualify for the wage subsidy? The reason this question comes up is because, obviously the wage subsidy is a program that is really geared towards making sure that employers are not implementing layoffs, or recalling people who've been laid off. You don't need to recall an employee in order to qualify for the wage subsidy. If they were laid off during one of the claiming periods, but still earned wages, you can still claim the subsidy for those wages paid while they were laid off. That being said, and I'll leave it on this note, you can recall people retroactively and have the subsidy apply to them, so long as you pay them their wages retroactively. With that said I'm going turn it over to the next slide.
Josee:This brings us to ... suspected COVID-19 protocols. The question we got was what are the best practices for COVID-19 protocols and what steps should the employer take if one of it's employees contract COVID-19? First, the most recommended prevention measures that employers should implement can be summarized quite easily. We're talking about promoting proper hygiene, washing hands, coughing in the elbow, entering more regular clean up of frequently touched objects such as door knobs, light switch. Of course, we're talking about creating social distancing but in the workplace, so it could be physical barrier, exclusion of some workers, reduction of production in some circumstances, and the redesigning work areas. Employers should also provide personal protective equipment when social distancing is not possible, such as a mask or goggles, and they should anchor and implement small and more stable work teams in order to avoid the multiplication of interaction, and if possible, if employers can arrange for meal times, start time shift to be different to allow employees not to be at the same place at the same time. It is highly recommended. Finally, employers should implement summary health check upon arrival at work. This pretty much has been addressed by Krista earlier. So most of the employer we counsel have implemented some forms that employees are required to complete upon their arrival at work. It will ask them some question about any symptoms such as cough, fever, difficulty breathing, that they may have experienced recently. If they have travelled, I understand it's less likely to have happened these days, and if they were in contact with anyone who was tested positive. In case of suspected positive COVID-19 case, in Quebec we recommend to employers to focus on three aspects. First, they should send the suspected or positive employee home, and not allow the employee to return to the workplace before he has completed 14 days isolation period, and does not present any symptoms. The employer should ensure, of course, that the workplace is safe and sanitized and inform the employees of their risk of transmission of COVID-19 in order to ensure the protection of the health and the safety of all employees.
The second question that was asked to us, should the employer advise their employees that they may have been in contact with COVID-19 in the workplace? Of course our answer is yes. In order to ensure the protection of the employees health and safety. That being said the employer must be careful not to provide information that could allow the individual to be identified, to respect their privacy legislation. Of course, in some circumstances it's not possible. We've seen a lot of employer, and it is recommended to obtain the consent of the affected employee, before communicating his name. This will allow to make sure that anyone who was in contact with this employee will isolate himself.
Finally, the last question that we got was when should an employee be allowed to come back to work after showing COVID-19 symptoms and should a doctor's note be required by the employer? In terms of allowing the employee to get back to work it is recommended that the employee isolate himself for 14 days from the moment of the first symptoms, and also, the authorities, they have confirmed that employees could return to work when it's been at least 48 hours since they had a fever, and at least 24 hours from the time the employee had acute symptoms. Quebec authorities really do not recommend employer to require a medical certificate because these days it's really not a good idea to go in the hospital and the clinics.
Krista: Okay. On to foreign workers. So the question is has the temporary foreign worker process changed? Generally, in terms of Canadian immigration, there have been many changes. These changes include who is permitted to enter Canada, the closure of the US and Canadian border, subject to exceptions, the suspension of certain immigration services and the mandatory 14 day quarantine period for anyone entering Canada. In terms of the specific question, I'm assuming this is asking about the temporary foreign worker program, that uses the labour market impact assessment, LMIA's. So this is where an employer typically needs to do a test of the labour market to prove to Service Canada that there's no Canadians that could fill this role, and thus they need to hire a foreign national to fill the labour need. In terms of LMIA's, they are still continuing to be processed, but we are seeing restrictions and processing delays, depending on the type of LMIA and the certain occupation. For example, as of a few days ago the 10 day processing standard for certain types of LMIA's, including the top 10% of wage earners in Canada, has been suspended until further notice. Occupations in the agriculture, egg, food, food processing and trucking occupations, are being prioritized above all other LMIA's. These are being expedited. The reason for that is to ensure the security and the food supply chain in Canada. Some other changes to the LMIA process include all LMIA's that are issued now are supposed to be issued for a 9 month validity as opposed to the normal 6 month validity. Recruitment and advertising requirements, the 4 week advertising requirements that typically apply for LMIA's, have been removed for the next 6 months, for agricultural occupations. The last thing is that employers are responsible for temporary foreign workers complying with that 14 day mandatory quarantine period. What this means is that unless an exemption applies, and there's a few exemptions, an employer must pay the worker regular pay and benefits, even though they're not permitted to work for that 14 day period.
The next question is, are there are any issues with laying off temporary foreign workers? To start with, the most important thing to keep in mind for this is that employment standards legislation, employment laws in Canada, they apply to foreign workers, generally in the same way that they apply to Canadians and PR's of Canada. Anytime you're going through the assessment for your Canadian workers you should also be going through that assessment for your foreign nationals, or your foreign workers. In addition to the normal employment law considerations, there's also a compliance piece for immigration. For those foreign nationals on LMIA based work permits, employers need to inform Service Canada of any changes in employment. This would include a layoff, a termination, a change in work location. So if all of a sudden foreign nationals will be working remotely, or out of their home, this should be reported to Service Canada. We do think there will be a relaxation of these reporting requirements but this hasn't been announced yet. For those foreign workers with an LMIA exempt work permit, so those are individuals here as in inter-company transfer or an active professional, it's not as big of a deal to be reporting but I do still recommend to clients that they report through the employer portal channel. That's that offer of employment that you would have submitted prior to the individuals obtaining their work permit. There should be an email sent to update the portal of this material change.
The last question is, is a foreign worker with a valid work permit able to legally work with an expired SIN? The short answer is yes. My advice is yes. If an individual has a valid work permit but their SIN hasn't been extended through the normal channels because there's a closure of the particular officer, then they can still continue to work and continue to get paid. What I would say is it makes sense to send a letter and a copy of the new work permit to Service Canada, if it's possible to send that courier, notifying them of the need to extend the SIN. Just to have this paper record. I think we're ready for the next slide.
Andrew:Okay. I'm mindful of the fact that we're getting tight on time and we might go a little bit over but I'm going to try to race through this one and we're going to cut out question number two. So the very first question is, can salary reductions be imposed unilaterally, or should we be obtaining employee consent? Keep in mind the advice we're giving now, in the face of global pandemic, is quite a bit different from the advice we were giving 5 or 6 weeks ago. Generally speaking, a salary reduction or any meaningful change to the fundamental terms of employment, is considered to be a breach of the contract and gives the employee the ability to claim constructive dismissal. Ordinarily, no, you don't have the right to just unilaterally reduce people's salary. That being said, we're in unusual times, unusual circumstances and, just like we talked about with layoffs, our view is that the courts are going to be far more lenient when it comes to assessing employer actions in the face of a global pandemic where governments have essentially mandated shutdowns. Historically, a reduction of less than 5% was generally considered to be okay. 5 to 10% is a bit of a gray area. Above 10% will trigger a constructive dismissal every time. But again, those are ordinary circumstances which we're not in right now. What I would suggest, right now, is that this doesn't give you carte blanche to reduce salaries. I think you still have to be reasonable and you still need to be able to demonstrate to a court, or will have to demonstrate to a court, that it was reasonable in the circumstances that you tried less drastic measures. Across the board salary reductions are something that I think are a lot more justifiable. But if you have all of your C suite executives not taking a pay cut and everybody else taking a pay cut it may be harder to justify. My advice would be, be consistent. Everybody should share in the pain equally, and I think it will be very hard for a court to fault you for that going forward, if you've adopted that kind of a model. I'm going to skip over number two.
Number three, if we reduce the work day to 4 days can we be mandate the use of accrued vacation to cover the 5th day to prevent any income loss? It does depend on the Province in which you're in. So in Ontario, for example, in theory the employer can dictate when an employee takes vacation. But you are limited to scheduling vacation of 1 or 2 week blocks. You can't do single day vacations without the employees consent. So in this circumstance that would not work in Ontario. Other Provinces are somewhat different. Some Provinces work in the same fashion. In Quebec, and I know I've talked to Josee about this, you can do it but the problem is you have to give 4 weeks advance notice which isn't all that pragmatic given the circumstances we're in. So, short answer to the question is not really. Not if you're going to be mandating single days. Practically speaking, I think the vast majority of employees would appreciate taking that extra day. I would make it optional. I think 90% of them will opt to take the vacation to prevent any income loss, and because I don't know when we'll get back to work, and when they'll be able to use their vacation anyway. So that's a good option to put out there. I'm going to turn it over now to Krista.
Krista: Okay, perfect. So, many Provinces have implemented new leaves of absence in their respective employment standards legislation. Not all, but most. The common element to these COVID related leaves is that they're unpaid, job protected and temporary. When I say job protected, this means that employees generally cannot be laid off or terminated while on the leave. They must be reinstated to the same or comparable position upon returning from the leave. Also, generally, medical notes are not required to qualify for the leaves and this goes back to Josee's comment about medical notes. Some of the leaves are much broader than others in terms of eligibility and duration. We've seen a range in duration from 14 days to 16 weeks to as long as necessary. The leaves typically apply to employees who are ill, need to self-isolate pursuant to Federal or Provincial emergency orders, need to care for a family member who was ill, or where an employer is concerned that the employee makes those others to risk. Most also apply to parents who need to stay home to care for their children because of school closures. Although I'll just speak to, very quickly, to the Federal leave and the leaves in BC, Alberta, Ontario and Quebec, other Provinces have implemented leaves with the following implementing them; Saskatchewan, Manitoba, New Brunswick, Newfoundland and the Yukon. For Federally regulated employers that are governed by the Canada Labour Code, there's a new COVID leave for up to 16 weeks if the employee is unable or unavailable to work for reasons related to COVID. The parameters of this leave are very broad. In BC, there's a new COVID leave under the Employment Standards Act, and the leave is quite broad as well, and the leave applies for as long as the circumstances relating to COVID-19 apply. In Alberta, we also have a new 14 day COVID leave under the Employment Standards Code. I will now turn it over to Andrew for Ontario.
Andrew:Okay. Really quickly. So, Ontario has enacted emergency leave, or at least revised the previously existing declared emergency leave. So now emergency leave, essentially, covers most of the situations Krista already mentioned. If you, yourself, are sick and you're quarantined, you're taking care of somebody who's ill, your subject to an order, essentially not to go to work, or I guess the big one, the catch-all, is you're home to take care of children who are home because of school or daycare closures. There a number of circumstances in which you'll qualify for job protected leave, and again, as long as you haven't gone off voluntarily you should apply and qualify for the CERB, which we talked about earlier. But again, generally speaking, it falls into one of those categories. It does not cover somebody who decides that it's safer for them to stay home than to go to work in the absence of a recommendation from public health or a qualified medical practitioner. Josee, for Quebec?
Josee:Yes. In Quebec we did not have to modify the Act respecting labour standard to provide for a new leave of absence. There has not been any change in that regard in relation with COVID-19. It could be because we already had the most number of leave protected and provided for in our legislation. You can usually fall within one of the existing leave of absence even in the present context.
This brings us to our last topic. I can appreciate we are behind so I will try to be as concise as possible. It pertains to return to work and employee's refusal. How should an employer react if some employees refuse to come back to work. The first recommendation that we would make is to ask question regarding the reason that's making the employee's refusal and to keep a record of this information. This is really to determine if the employee's refusal could qualify under either health and safety legislation or could fall within one of the statutory protected leave of absence. I want to underline that in Quebec, under the Professional Health and Safety legislation, a worker may refuse to work if he has reasonable grounds to believe that his work is exposes to him to a danger to his health or safety or physical well being. But the Act refers to the notion of danger and not the notion of risk. So normally it will require more than a simple contingency whose occurrence would be uncertain. The fear of contracting COVID-19, at large, will not allow the worker to exercise his right of refusal within the meaning of the Health and Safety legislation. As of April 14, in Quebec, we only had 14 work refusal cases that were granted by our Workers Compensation Board. If the refusal work is not legally justified, usually what we recommend is for employer to ensure that the employee has received a copy, or has been informed of all the prevented measures that were put in place in order to protect the health and safety of the employees. The employer's communication should aim to really reassure the employee about the measure taken and requiring that the employee return to work. If the employee still refuses to return to work despite all of this, then two things should be done by the employer. First, the employer should contact Service Canada to advise them that the employee's refusing to get back to work and a report will then impact his EI benefit or other emergency benefit he's receiving. The employer can also impose disciplinary measure because it would be considered as insubordination. That being said, we have to mention and underline that several employers have decided, and they have agreed to uphold the employee's decision not to return to work because of COVID-19, even though there is no really legal basis or justification for it.
Can an employer require employees to wear personal protective equipment in the workplace? In Quebec, the answer is quite simple, and it's yes. The Act respecting occupational health and safety provides that the employer has to take all measures to protect the health and safety of its employees. So the CNESST, which is our workers compensation board, has confirmed that the employer could require, for example, that employees wear masks, especially when it's impossible to perform tasks without being in 2 meters of another person. It's also a recommendation that we can find in the CNESST COVID-19 Guide for Construction Sites. If the employees refusing to wear the equipment, then it's possible to impose disciplinary measure, and of course, the employer should follow progressive discipline and start with their written warning or short suspension.
Finally, can an employer implement remote working as an alternative to back to work, or can an employer require an employee to get back to work even if the task could be done, or could be conducted remotely? Of course, remote working is a good and great and recommended alternative to transitional back to work. This is not an issue. If possible, the Quebec authorities have recommended that employee work from home, and if it's impossible, they have recommended to avoid non-essential face to face meeting, to use technology for communication in between employees and to, of course when possible even if it's not all the time, promote tele work. That being said, the employee could not require to work from home if, as an employer, you are authorized to maintain your activity and you ask the employee to be physically at work.
Andrew:Okay. So, just before we wrap up, in looking at the questions that we received there was a number of miscellaneous questions that we go that were unrelated, not necessarily unrelated, but they were different, they didn't fall squarely into one of the topics that we had asked for feedback on. I thought they were really interesting and there are two that I picked out that I think are really important as a parting message.
What can employer's expect post-COVID? So, what do we do moving forward? How do we plan for returning to the work place? And then just general tips about how to communicate with your workforce. On the first one, I think the honest answer is, we don't know. We don't know because we don't know when we're going to get back to work. We don't know what that's going to look like. We don't know what measures are going to still be in place, social distancing and otherwise, upon our return to work. We don't know what the infection rates going to be, and I think frankly, to be honest, until we have herd immunity or a vaccine, I think employers need to prepare for months and months of a new normal. l think that new normal is going to involve continued social distancing, lots of personal protective equipment, maybe temperature checks, wellness checks in the workplace, making sure people are not ill, and I think maybe most importantly, a lot of creativity and flexibility. I do think employers are going to have to be flexible and accommodating because you're going to have employees that are going to have different needs at different times. The virus will still be there. People will get sick at different times. People will be caring for loved ones at different times and I think that employers are going to have to really think outside the box and operate differently than you are used to. For essential businesses that have continued operating during the government mandated shutdown, the change might not be as extreme because you're already engaging in social distancing. You've installed plexiglass where you can. You're not having a certain number of people in the same break room. You're doing what you need to be doing to keep people as far apart as possible. Cleaning and disinfecting frequently. Mandated use of face masks and so on and so forth. For employers that have been out of the workplace, and have been operating remotely this whole time, I think it's going to be a little bit more dramatic. I do think we're going to have, probably, rotating schedules of employees who will be in the office, for example, for a week then remote for a week, until we get to a point where we can return to normal. In short, we don't really know what it's going to look like just yet. But, if you're looking at preparing now for what it's going to look like, I think you can pretty much bet on there being some element of social distancing, fewer business trips and so on and so forth.
Last, but not least, tips when communicating with your work force. We've had a number of questions about this. I think it depends on your workplace, generally. Do you have people working remotely or do you have people working in a particular facility or are you shutdown completely? If you have people working because you're in an essential business and you're actually in a facility, then I think the communication has to focus on here's what we're doing to keep you safe. Here's what we're doing to address situations where somebody tests positive, as Josee was talking about. Here is what we're doing in terms of disinfecting. All related to what we're doing to maintain your health and safety. If you have people who are working remotely, I think the key message to keep in mind is that people are feeling isolated, people are feeling anxious, scared about the future, job security is not exactly high right now. So I do think it is important to communicate frequently and honestly. Transparency is really important. I don't think it's worth sugar coating. People understand right now that we're dealing with an economic crisis and a health crisis. You don't need to shy away from that, but I do think if you're going to communicate honestly and frequently that people will appreciate that, and they'll really look to leadership to provide that and feedback. For example, if you're going to be doing salary reductions, just as an example, communicate to people that this is across the board. Communicate to people that this is what you're doing as a temporary measure to try to save jobs. Lots of different examples like that but I do think the key message is communicate often and communicate honestly, as honestly as you possibly can.
That's it for today. I do want to take a moment, on behalf of myself, Josee, Krista and everybody else at Gowlings to thank you very much for joining us. I sincerely apologize for going over by 11 minutes but I thought it was important to finish on that note. As I mentioned at the outset there are a number of questions we just didn't have time to get to. If you have questions, if you have inquiries, please, please, please do reach to myself, Josee, Krista or any other member of the employment team and we'd be more than happy to assist you. Thanks very much. Have a great afternoon, be well, and keep safe.
Josee:Thank you everyone.
Read the original article on GowlingWLG.com
Originally published by Gowling, April 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.