Questions about COVID-19 are getting more and more difficult for Canadian employers to address, and decisions are getting harder and harder to make. Layoffs, Employement Insurance (EI) claims, benefits, and entitlement are all topics employers are starting to think deeply about.
With the complexity of this pandemic event increasing, we're here to support you with answers to some of the more challenging questions you may have.
If we decide to lay off an employee, do I complete the Record of Employment (ROE) as normal and enter what I believe to be an expected return date? If that date comes and we are not ready to recall the employee, what then?
Yes, enter the ROE as you would enter any temporary layoff. In Block 14 on the ROE, there is a field labelled “Expected Date of Recall.” This is an optional field, and you may use it to indicate a potential return date. If you are unsure of the return date, there is a box labelled “Unknown” that you may use.
Use Code A, for “Shortage of Work,” which includes reducing or shuttering operations. Use Code D, for “Sickness,” if the employee is self-isolating due to potential exposure.
If you have employees who cannot come to work because they are self-isolating or need to provide care to their families, consider issuing them a temporary layoff, as this will enable them to apply for unemployment.
Please note: Currently in Ontario and other jurisdictions, there are usually time limits for how long someone can be temporarily laid off before it is considered permanent. We anticipate that some of these provisions will change as Canada continues to respond to COVID-19.
When issuing temporary layoffs, be mindful to check your jurisdiction and collective agreement (if this applies) to align with requirements.
Are there any special notices that I need to send out?
No. For provincially regulated organizations under Ontario’s Employment Standards Act, 2000, all an employer must do is inform the employee they are being temporary laid off and given an ROE (note: please check the applicable employment standards legislation if you operate in any locations other than Ontario). The employer does not need to provide a reason for the layoff. At this point, the employee can apply for EI. However, you should confirm whether your collective agreements or employment contracts lay out a specific clause for layoffs. If an employment contract or collective agreement provides a more generous clause than employment standards legislation, the employment contact or collective agreement supersedes the applicable employment standard.
In normal circumstances, if the employment contract does not stipulate a temporary layoff and the employer issues one, this could cause a claim from constructive dismissal. However, based on the current climate and rapid changes in Canada, the claim for constructive dismissal would be a harder one to make. Businesses should still be mindful of this and attempt to work with staff, improve their communication strategies, and look at all options including remote work, reduced hours, and flexible schedules, but even with these measures, a temporary layoff may be necessary.
While legislation may not require you to provide employees with notice during a temporary layoff, we encourage all employers to develop a communication strategy, even just a weekly update on the status of the business and planned next steps. With more and more employees and individuals isolating and practising social distancing, any efforts we can make to connect remotely and keep communicating will be critical to support individual wellness and foster continued commitment.
Which employees can and can’t be laid off?
Businesses may still issue temporary layoffs during this time. A temporary layoff is essentially putting the employer–employee relationship on hold for a limited period of time without severing it. Temporarily laying off an employee says, “We don’t have work available right now, but we want to keep you as an employee, and once work resumes you will be recalled.”
Businesses will need to check legally binding documents like employment contracts and collective agreements to determine whether there are provisions that they should be mindful of when creating their short- and long-term strategies for layoffs, as these documents may create legal obligations above and beyond those contained in employment standards legislation.
Do employees submit their own applications for EI when laid off? What action has the government taken to make this process easier during the pandemic?
Yes. Employees can apply for EI benefits through EI Regular Benefits.
The government of Canada is taking the following actions to support Canadians:
- Waiving the one-week waiting period for EI sickness benefits 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;
- Granting priority application processing for EI sickness claimants under quarantine;
- Waiving medical certificate requirements for people claiming EI sickness benefits due to quarantine; and
- Backdating claims delayed due to quarantine; that is, 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.
Currently, if employees are temporarily laid off, the one-week waiting period still applies. The waiting period waiver only applies to persons under quarantine.
What entitlements are employees due while laid off?
During a temporary layoff, you do not need to pay out vacation accounts. You may want to look at providing employees with access to their banked time accounts, sick leave accounts, vacation accounts, and so on to help reduce their financial stress.
We encourage businesses to provide each employee with an update on their accounts, so that they can make informed decisions.
For example, an employee may ask to use their banked time, sick leave, and vacation time before moving to a temporary layoff. We discourage forcing employees to take time off if doing so is inconsistent with your existing policies, but you should inform and support your employees to make intelligent decisions about how to best use their vacation accounts and so on.
Does the company have responsibility to keep benefits active?
This depends on the employment standards legislation for your jurisdiction, as well as any terms in applicable employment contracts or collective agreements. For example, in Ontario, if benefits continue, temporary layoff provisions could be extended.
From a best practice standpoint, we encourage employers to consider their strategies and, if possible, continue benefits coverage during temporary layoffs. The goal and the hope is that business resumes quickly, but the reality is that some employers may need to temporarily cease benefits coverage to remain viable.
We suggest looking at your benefit structure so you are familiar with the following aspects:
- Do employees pay a portion? If so, how much?
- How much does health and dental cost the business per month?
- Will long-term disability and life insurance continue during a temporary layoff? You will likely need to call your provider and review the details of your plan.
- Could the business afford to cover 100% of the benefits today? If so, for how long?
Determine financially what is reasonable and what you can do to support your workers today while continuing operations.
If you're feeling overwhelmed or unsure, you are not alone!
HRdownloads is here to support your business as questions arise and circumstances continue to change. It's not going to be easy, but it's important to make informed and rational decisions. Keep an eye on our Coronavirus (COVID-19) FAQ page, which we will continually update.
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