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What do you need to know when you are laid off during this time?

6/21/2020

Disclaimer: This information is not intended to be construed as a legal advice, but strictly for your information only. Please contact Trustworthy Legal Services for your independent legal advice in your particular situation. The first consultation is required prior to the retainer of your case.

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What to do if the Tenant is not paying rent during Covid-19 situation?

6/21/2020

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Recent Ontario regulatory amendments to ESA for the Covid-19 period to provide job-protection for employees as well as relief for employers!

6/2/2020

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The time limit of a temporary layoff during the COVID-19 period can be extended beyond the time that the Ontario Employment Standard Act (ESA) allows, except for the employees who have already been dismissed, permanently laid off or given a notice of termination (this notice can be otherwise cancelled upon consent) prior to May 29, 2020 during the COVID-19 period. Under ESA, a standard temporary layoff is usually no more than 13 weeks in a period of 20 consecutive weeks, or less than 35 weeks in a period of 52 consecutive weeks for an extended temporary layoff. This regulatory change can help reducing permanent lay-offs, when businesses are usually forced to trigger terminations after the ESA temporary layoff periods have expired, but rather employees are now deemed to be on the Infectious Disease Emergency Leave.

Employee remains employed during the Infectious Disease Emergency Leave with his or her eligibility for federal income support programs, and will be able to return to work when the leave ends. Whether an employee can be entitled to the continuation of company benefits during the Infectious Disease Emergency Leave really depends on the employer’s continued contributions to the company benefits plan during the leave until May 29, 2020.

Relief for employers

A temporary reduction or elimination of an employee’s hours of work OR employee’s wages in relation to the designated infectious disease cannot be considered as constructive dismissal during the COVID-19 period. However, it is not applicable to employees who have already been terminated prior to May 29, 2020 during the COVID-19 period.

That being said, the above-mentioned amendments are only limited and applicable to employer-and-employee relationship under ESA with the minimum standards. Nevertheless, it is not restrictive to employees who refer to seek for compensation(s) or/and enforce their rights, where the common law governs in that particular employer-and-employee relationship.

This regulatory change can indeed clarify some of our employment-related concerns during the COVID-19 period, and facilitates a proper approach of managing human resources towards the gradual reopening of businesses in our community. Hopefully, more businesses can minimize further reduction or closure in their operations, while most workers can remain employed awaiting to go back to their jobs soon due to all these changes.

Note: Further details in the Ontario Regulation 228/20 can be referred to the link below:
https://www.ontario.ca/laws/regulation/r20228?search=228%2F20&_ga=2.151751929.1903923304.1591065972-1448105157.1484684694

Disclaimer: This information is not intended to be construed as a legal advice, but strictly for your information only. Please contact Trustworthy Legal Services for your independent legal advice in your particular situation. The first consultation is required prior to the retainer of your case.

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Force Majeure or Frustration of Contract on various types of agreements due to COVID-19!

4/22/2020

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There is a substantial causation between the Force Majeure event and the party’s failure to carry out its contractual obligations.

More onerous or expensive to perform a contract due to the pandemic cannot excuse a responsible party from executing its contractual obligation
Strict compliance of notice requirement regarding Force Majeure event in the contract

Frustration of Contract
If there is no Force Majeure clause explicitly mentioned in the contract, the common-law doctrine of frustration can be established if the intervening event can meet all of the following criteria:

The event must have occurred after the formation of the contract;
The existence of a supervening event cannot be foreseeable or contemplated with no fault of both parties at the time when the contract was entered;
This event makes performance is radically different from what is undertaken by the contract.
This event makes a fundamental contractual term incapable of being performed.
The event must cause a “permanent” disruption – not temporary or transient. The change must totally affect the nature, meaning, purpose, effect and consequences of the contract so far as it concerns either or both parties.

In Ontario, the Frustrated Contract Act, R.S.O. 1990, C. F. 34. governs most of the types of contract frustration as a result of unforeseeable intervening event.

The standard threshold for establishing Frustration is higher than the threshold for establishing Force Majeure, unless it is unfair to hold both parties accountable in this unforeseen event. Whether the contract was discharged for frustration or excused by Force Majeure clause, the breaching party must take reasonable steps to prevent performance rendered impossible, while the contractual party who doesn’t breach the contract also has the duty to mitigate the loss or/and damages. It permits Force Majeure to temporary or partial suspension of contractual obligations, when the frustration of contract can excuse its entirely obligation if proven.

The following indicates different types of cancellations due to the COVID-19 situation. The determination of invoking contractual obligations in response to unforeseen event gives its first priority to Force Majeure provision in the contract. Otherwise, the termination of contractual obligations can be determined by frustration of contract stated as below, or other applicable legislations due to COVID-19.

Airline Flight cancellation:

At the time that you purchase a flight ticket from an airline company, you have already established a contractual relationship with the airline company. In light of the COVID-19 pandemic, there may be flight cancellation due to the closure of airports. Whether or not the reason for flight cancellation is within the airline’s control, the passengers are generally entitled to a full refund.   The legal right to a full refund, when it is within the airline’s control, is prescribed in s. 17(2) of the Air Passenger Protection Regulations, stating that passengers are entitled to a refund instead of rebooking, if the alternative travel arrangement offered cannot meet the traveller’s needs.    Whenever the cancellation is beyond the airline’s control, the right to a refund is governed by the precedent case laws from the Canadian Transportation Agency and the contract law. Pursuant to s. 3(1) of Frustrated Contracts Act, it states that “the sum paid” can be refunded and any further obligation if exists can be nullified.

The common practice in the airline is to give out future credit and vouchers as a resolution for this unforeseen circumstance.   This may not be a bad choice, when you can accommodate to reschedule your travel at a later date. However, when the rescheduling of travelling at a later date doesn’t fit into your original need of itinerary (a material change in traveller's circumstances) in support of justifiable reasons whether they are for personal issue, work-related matter, financial concern and such, you may be better off to ask for a full refund.

Wedding or/and Banquet cancellation:

The Province of Ontario declared an emergency state due to the spread of COVID-19 on March 17, 2020, followed by a restriction imposed on social gathering for no more than 5 people on March 24, 2020. Many wedding events/ceremonies were cancelled or will get cancelled as a result of this social gathering restriction, as well as the mandated shutdown of all non-essential business on March 28, 2020. The contract is considered as frustrated by the non-performance of fundamental contract terms (assuming around 100 guests) without the fault of both parties in this COVID-19 situation.

Notwithstanding of a delay in the wedding ceremony, the chance for all these couples to have the weddings held at a later date are considerably high when thing is back to normal The wedding couples are entitled to a deposit refund or full refund on the basis of s. 3(1) of Frustrated Contract Act, and the party only has the duty to mitigate the loss when accepting a deferred wedding ceremony in the future is possible.

On the other hand, the couple can make the cancellation and ask for a deposit refund or full refund in accordance with s. 96 (1) of the Consumer Protection Act, 2002, by giving notice and explaining reasons for cancellation if there is a material change in the customer's circumstances, which can also be interpreted as performance is radically different from what the contract contemplates.   The cancellations applicable to the types of agreements are prescribed in the s. 95 of the Consumer Protection Act, 2002 .   For example, the original attendance of 100 guests cannot make possible (probably reduced to 50 people) because of your guests’ busy schedules, if the wedding has to be rescheduled at a later date.

Employment Contract:

A recent reduction in hours or salaries executed by the business, resulted from the mandated shutdown in the COVID outbreak, may lead to a constructive dismissal claim as a result of the fundamental breach of employment prior to this pandemic situation.   The current impact of such actions is minimized through CREB Benefits offered by the government, and the implementation of appropriate approaches have to be justified and quantified by balancing both employees’ and employer’s interests into its consideration.

Another example of the soon-to-start employment may be discharged by frustration due to its failure of performing the contractual obligations in this COVID-19 situation, given that this approach has already been weighted in both parties’ interests, not merely just economic hardship.

Tenancy Contract:

A tenant may discover that the rental unit that he is going to move into is undertaking the sterilization of COVID-19 contamination on the same floor and certain common areas of the building.   It may not be instantly considered as a frustration of contract, if the situation is temporary in addition to the relevant work done within a reasonable period of time, whereas the living condition of rental unit is in compliance with s. 20 (1) of the Residential Tenancies Act, 2006 under “a good state of repair and fit for habitation and for complying with health, safety, housing and maintenance standards”.   Of course, it will lead to a different scenario, if the relevant work is done beyond a reasonable period of time.

Renovation Agreement:

When the stoppage of renovation project is triggered by COVID-19, the customer can cancel the project pursuant to s. 26(1) of the Consumer Protection Act, 2002, for a deposit refund, if this “future performance contract” hasn’t commenced within 30 days from the start date specified in the agreement.

However, if there is no choice to defer the continued renovation work due to COVID-19, the customer can also cancel the agreement on the basis of s. 95 of the Consumer Protection Act, 2002.   However, COVID-19 should have a direct impact on this cancellation – rather than other “hindering” factors – as a result of frustration of contract due to a material change in the customer’s circumstances.

A refund to the customer may be granted for all money in the remaining balance of the contract or all money after the incurred expense is deducted for the partial service rendered, despite the Frustrated Contracts Act has expressed that an entire amount paid can be possibly recoverable as well.

Disclaimer: This information is not intended to be construed as a legal advice, but strictly for your information only. Please contact Trustworthy Legal Services for your independent legal advice in your particular situation. The first consultation is required prior to the retainer of your case.

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What can both Landlord & Tenant do, if the Tenant cannot make Full Payment of Rent or No Rent at all, due to COVID-19?

3/25/2020

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Trustworthy Legal Services is your Legal Expert helping people with civil disputes in the areas of Employment, WSIB, Small Claims, Landlord & Tenant, and other tribunal matters with the compensation amount of $35,000 or less. Contact for Legal Advice in Ontario at 647-891-9089.

The Landlord and Tenant Board (LTB) announced to cease all eviction-related hearings early last week as a response to the safety and health measures imposed by the government, unless the matter relates to an illegal act or serious impairment of safety. There are ample concerns from the Landlords in terms of how to deal with non-payment of rent from the Tenant during this unprecedented COVID-19 situation.

Tenant’s action

If you are a Tenant who recently experiences a layoff or a temporary layoff, it is recommended to communicate with your landlord directly if it affects your ability to pay rent in full.

I believe that most Landlords (or any average individual) tend to be more understanding during this difficult time, when most individuals and businesses are negatively impacted by COVID-19. However, the Tenant's deliberate act of not paying rent is unacceptable to any Landlord, especially when backed by no justifiable reasons but merely a response to this pandemic.

The Tenant should be able to understand that the occupancy of your rental premise is in exchange for the Landlord’s return in Rent. Any Tenant should be obligated to make partial rent payment - if not full payment at the time - unless he or she is currently suffering a proven financial hardship, and works out a payment plan with the Landlord. It also suggests that the Tenant should check out the EI Benefits currently available for those who recently lost their jobs. For those who are not qualified for EI, a newly launch of COVID-19 emergency fund released by the government will be made available in April 2020 as a source of another financial support.

Landlord’s action

As for the Landlord, please keep an open mind and be flexible, when being informed by the Tenant about his/ her inability to pay rent in full as a result of layoff and such. You can work out a payment plan with the Tenant, in order to make up the rent behind during the reasonable period of time agreed by both parties.

There may be situations when the Landlord strongly feels about no room for discussion/ negotiation with your Tenant about the issue of rent – for example, when the Tenant insists on paying no rent at all deliberately, or when the Tenant is making lower-than-expected partial rent payment which seems not to be proportional to his/ her ability to pay at the time etc. Recently, some Tenants may give Landlords their excuses of late rent payment in association with the availability of mortgage deferral program - but keep in mind that some banks approve the mortgage deferral on the principal residence only with applicable interest charge .

If the latter scenario is your case, the Landlord may consider starting the legal procedure now, despite of a suspension of most eviction-related hearings in LTB. A temporary halt to the in-person hearings only means No Immediate Eviction. The tribunal still continues to process all incoming applications, and it can minimize a prolonged scheduling of hearing once LTB resumes if you submit the application sooner. The following are the suggested steps to approach this issue of non-payment of rent:

Serve your Tenant with N4 (Xpresspost is recommended at this time), given 14 days in a termination date for payment. Remember to add 5 days to the termination date on the N4 notice when it is sent by Xpresspost or mail;
If the tenant still doesn’t pay when the termination date on the N4 notice expires, the Landlord can proceed with the L1 application to schedule for a hearing;
When the hearing will be held in the very future, the Landlord can request a standard order, which allows 11 days for the Tenant to pay for the rent arrears. Sometimes, the Tenant may ask for a time extension to pay for the rent arrears, but it is likely to be granted if the Tenant’s attempt to pay a reasonable portion of rent is demonstrated. If the Tenant seeks for a relief from delaying or refusing eviction under s. 83 of RTA based on the ground(s) of illness, loss of job, accident, COVID-19 or such, it may only be granted if the Tenant can demonstrate his/her intention of paying ongoing rent, along with the outstanding rent, within a reasonable period of time.
The Landlord can take the order to the Sheriff's office for enforcement, when the eviction order is issued by LTB and the payment isn't made within the specified time stated in the order.

If the Tenant plans to continue the tenancy, the rent arrears should be paid before the specified date stated in the L1 order, or prior to the Sheriff's coming for eviction.

If the Tenant vacates the rental premise without paying the outstanding rent stated in the L1 order, the Landlord can further proceed with the Small Claims Court to seek for the unpaid rent. The Landlord can report to the Credit Bureau after sending a demand letter or/and hire a collection agency to do so, prior to any proceeding in the Small Claims Court.   This action may impose a negative impact on the Tenant’s ability to request a loan from the bank(s), secure a rental unit due to the Landlord’s credit check, and acquire a business loan or any emergency fund etc. in the future when needed.

Hopefully, both Landlord and Tenant can work thing together during this difficult time, rather than doing more harm to go against each other, when the circumstance is already challenging to almost everyone.

*Note: It may be subject to change for the above mentioned, if there is any change/update in regards to the government policy due to COVID-19.

Disclaimer: This information is not intended to be construed as a legal advice, but strictly for your information only. Please contact Trustworthy Legal Services for your independent legal advice in your particular situation. The first consultation is required prior to the retainer of your case.

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What do you need to know when you are laid off during this time?

What to do if the Tenant is not paying rent during Covid-19 situation?

Recent Ontario regulatory amendments to ESA for the Covid-19 period to provide job-protection for employees as well as relief for employers!

Force Majeure or Frustration of Contract on various types of agreements due to COVID-19!

What can both Landlord & Tenant do, if the Tenant cannot make Full Payment of Rent or No Rent at all, due to COVID-19?

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