Given the global COVID-19 pandemic is unprecedented, I am offering my best knowledge with reference to our current employment legislation in the following topics:
There are increasing numbers of businesses giving temporary layoffs to their employees as a response to plummeting revenues resulted from the shutdown at the time being.
Unless there is a clause of temporary layoff explicitly stated in the employment agreement, this action is not considered as legal, if the employee doesn’t agree with being temporarily laid off; meanwhile it may also lead to a possible constructive dismissal claim. This approach may be subject to some variations in its application under this COVID-19 outbreak; for example - the shutdown in businesses can be justified as a result of current health and safety measures implemented by the government.
There is a time limit in terms of the length of a temporary layoff should last - no more than 13 weeks in a period of 20 consecutive weeks. Employer can extend a temporary layoff more than 13 weeks but less than 35 weeks in any period of 52 consecutive weeks. Furthermore, the employer should promise the employee for his or her Return To Work in a definite time period, and requires to pay the benefits during the extended period of a temporary layoff.
In case, an employee doesn’t accept a temporary layoff, while no term permitted in the employment agreement for this action, he or she may be entitled to severance as a result of a permanent termination without cause.
Layoff (Termination without cause)
1. Minimum Statutory requirement (ESA)
The Employment Standards Act, 2000 (ESA) establishes the minimum Statutory notice of termination or Termination pay in lieu of notice period as the entitlement of employee’s rights in the event of being laid off.
ESA requires one week’s notice period per each year of service, capped at the maximum of 8 weeks as the minimum statutory requirement. In addition to statutory notice of termination or termination pay in lieu of notice period, the employer is also required to pay for severance pay to any employee who has been employed for five years or more, when one of two criteria is met:
- A permanent discontinuance of all or part of the employee’s business with 50 or more employees whose employment relationship were severed within a six-month period as a result;
- The employer has a payroll of $2.5 million or more
Qualifying employees are entitled to receive severance pay in the amount of one week’s pay for each year of service to a maximum of 26 weeks.
2. Common-law Entitlement
Apart from the minimum statutory entitlement mentioned above, the terminated employee can be qualified to receive a higher compensation in a common-law entitlement, which is governed by the following factors affecting the length of the reasonable notice period:
- The employee’s age;
- The employee’s position;
- The employee’s length of service;
- The employee’s level of compensation; and
- The availability of similar employment, given the employee’s experience, training, and qualifications
A long-service employee with comparatively higher pay is likely to be compensated in the common-law requirement. However, many companies also tend to pay their terminated employees under the common-law entitlements in prevention of any potential wrongful dismissal claim arising from not paying adequate amount in severance. The common-law entitlement usually requires one-month’s notice (pay in lieu) for each year of service under the normal circumstance. Nevertheless, there is no “rule of thumb” in determining a reasonable notice period, but rather a case-by-case analysis in the appropriate period of time required to secure his or her next comparable employment.
Therefore, the terminated employee impacted by COVID-19 may receive a longer notice period, when it is likely for the employee to take longer than usual period of time in searching for a comparable job in this negative economic climate.
EI Benefits & COVID-19 emergency fund
Prime Minister, Justin Trudeau, unveiled the government’s $82 billion emergency response package on March 18, 2020, which is made available in April 2020 for those who don’t usually qualify for Employment Insurance but a loss of their jobs through no fault of their own.
- EI sickness benefits (including self-employed) for those workers are unable to work because of being infected or quarantined with COVID-19. It is also applicable to any caregiver of those who are impacted by COVID-19. If approved, either 55% of the normal income or $573 per week, whichever is lesser, will be paid out.
- The Emergency Care Benefit for those cannot go to work and don’t have paid sick leave but impacted by COVID-19. It is also applicable to any caregiver of those who are impacted by COVID-19. If approved, the worker can receive up to 15 weeks of payment with the maximum amount of $900 biweekly.
- The Emergency Support Benefit for those who are illegible for Employment Insurance but encounter unemployment or reduction in hours.
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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