Over the past few weeks, a number of our employer clients have reached out to us for legal advice on dealing with the COVID-19 public health crisis and, its impact upon the workplace. At Hyde HR Law, we like to make our advice practical and accessible to everyone. This is why we have compiled our most frequently asked questions into one document, together with a summary response for each.
Please do not hesitate to contact us for more information or, case-specific advice. We are happy to assist.
1. Keeping employees at work
Which businesses are "essential"?
The Government of Ontario has ordered all "non-essential" businesses to close as of March 24, 2020. Companies big or small, may only continue operating at their place of business if they have been deemed to provide "essential" goods or services. There is an extremely long list of businesses deemed "essential" by the Ontario government. The list includes, among other things, various food services and production (but not sit-down restaurants); transportation; and construction (but not residential construction). The determination of whether a business is "essential" is a legal one and an important one – if you have any questions, we recommend seeking legal advice.
Which employees are entitled to a COVID-19 leave of absence?
The Employment Standards Act of Ontario (the "ESA") has been amended to provide for an indefinite "Infectious Disease Leave" of absence to various employees affected by COVID-19, including:
- Employees under medical investigation, supervision or treatment related to COVID-19;
- Employees under quarantine relating to COVID-19 (including individuals returning from international travel);
- Employees acting pursuant to a government order or control measure related to COVID-19 which prevents them from working;
- Employees providing care or support to a prescribed family member because of COVID-19 or government measures in response to COVID-19 (such as parents caring for children due to school closures);
- Employees unable to return to Canada due to travel restrictions; and
- Employees prohibited from working by their employer to stop the spread of COVID-19.
Various other leaves under the ESA may be triggered as a direct result of the COVID-19 pandemic, including: Declared Emergency Leave, Family Caregiver Leave, Family Medical Leave, Critical Illness Leave, Sick Leave, and Family Responsibility Leave. At this time, however, it appears that the recently enacted "Infectious Disease Leave" is broad enough such that, in relation to interferences in work directly cause by the COVID-19 pandemic, the above-listed leaves are rendered redundant, at least for the foreseeable future.
Bear in mind, however, that all forms of leave under the ESA remain in effect and may become increasingly relevant in the coming weeks, as the indirect, cascading effects of the COVID-19 pandemic are felt in the workplace. For instance, social isolation has led to an unfortunate increase in reports of domestic violence, which may trigger an entitlement to domestic violence leave or sexual violence leave under the ESA. Many such leaves are esoteric and rarely claimed, such as reservist leave, family responsibility leave, or child death leave. If you have any uncertainty about an employee’s entitlement to a leave, we recommend consulting with a qualified employment lawyer.
Can employers request proof to support a COVID-19 leave of absence?
Yes, in all cases, employers can make reasonable requests for proof to support a leave of absence related to COVID-19. However, employers should NOT request a medical certificate as proof, as this is prohibited by the new ESA provisions regarding Infectious Disease Leave.
Can employers require employees to work from home, instead of granting a COVID-19 leave of absence?
The Infectious Disease Leave of absence only applies to employees who will NOT be performing the duties of their job BECAUSE OF one of the enumerated factors. Therefore, many employees who are able to work from home will not be entitled to this leave -- precisely because they are not prohibited from working.
There is, however, some legal subtlety in determining whether an employee is capable of working from home, for instance, while taking care of children who would otherwise be in school. We do not recommend denying a request for a Infectious Disease Leave of absence without first seeking legal advice. Contact Hyde HR Law for questions regarding employees’ entitlements to COVID-19 related leaves of absence.
Must COVID-19 be accommodated for under Human Rights legislation?
Our view is that COVID-19 itself would not be considered a disability requiring accommodation – past decisions of the Human Rights Tribunal have indicated that temporary illnesses (such as the flu) are not "disabilities" under the Ontario Human Rights Code. However, the Ontario Human Rights Commission has taken the position that all negative treatment of employees who have, or are perceived to have COVID-19, for reasons "unrelated to public safety", amounts to discrimination, because of the "significant social stigma" attached to the disease. It is yet to be seen how this issue would play out in a court or before the Human Rights Tribunal.
As well, some absences from work related to COVID-19 may be protected by the Code, such as absences relating to the care of children off school, which may engage the protected human rights ground of "family status". Interpreting and applying the Human Rights Code is often counter-intuitive. Employers should always seek legal advice before acting.
While accommodation of employees with COVID-19 may not be required, we are beginning to recommend to most of our clients that they find a way - any way at all - to keep their employees working, even while in quarantine, and even where there are only a few pressing matters to attend to. That is because of the recently announced federal wage subsidy program, which will cover 75% of employees’ wages for businesses experiencing a minimum of 30% loss in revenue as a direct result of COVID-19. More detail on this program will be released in the coming days.
Can employees refuse to work due to COVID-19 related health and safety concerns?
There has been some speculation that employees may invoke the Occupational Health and Safety Act to refuse unsafe work, based on the idea that the COVID-19 epidemic presents a "reasonable risk of harm". At this time, our view is that a work refusal on this basis is likely not justified, barring some exceptional circumstances (such as an infected co-worker or a compromised immune system). In all cases, the Ministry of Labour may determine whether the particular circumstance leads to a reasonable risk of harm. If an employee takes a position that he or she cannot work on account of such potential danger, it may be necessary that the Company advise the Ministry of Labour of the work refusal and an inspector may be appointed to the matter.
If the employee’s health and safety concerns arise out of a stress or anxiety disorder related to COVID-19, then the situation is different; this would likely be a disability which the employer is required to accommodate under the Human Rights Code. If the WSIB determines that the employee has been diagnosed with an anxiety or stress disorder which was predominantly caused by fear of COVID-19 in the workplace, and prevents the employee from working, then the employee may also be entitled to WSIB benefits.
However, you need not simply take the employee’s claim that he or she is unable to work due to an anxiety or stress disorder at face value; the employer has a right to request medical evidence as reasonable in the circumstances. As for the entitlement to WSIB benefits, it is for the WSIB to determine whether the "illness" or "injury" was caused in the workplace. The WSIB will also consider whether, generally speaking, the employment puts the employee at a greater risk of contracting COVID-19 versus the general public.
Are employers required to pay employees on a leave of absence related to COVID-19?
Employees who are off work due to COVID-19 may use their paid sick and/or vacation days (if any) while off work. Employees may also be eligible for disability benefits under the Company’s insurance plan. We recommend that employers contact their group benefits provider to determine whether (and the extent of which) disability coverage will cover absences relating to COVID-19.
Other than as above, employees off work due to COVID-19 are not entitled to their regular salary. That said, practically every employee and self-employed person who finds themselves out of work as a result of COVID 19 will be eligible for some form of government wage replacement (EI or the COVID-19 emergency benefit).
2. How do we keep our business safe?
Can employers order employees to disclose whether they have been diagnosed with COVID-19?
Yes. In almost all other circumstances, an employer is not permitted to ask an employee about their specific diagnoses. Due to the risk of infection, however, our view is that employers are entitled to request information that is reasonable in the circumstances to prevent transmission. However, what is considered "reasonable" will vary from case to case. Seek legal advice if you have any uncertainty.
Can employers order employees to disclose whether they have come into contact with a person diagnosed with COVID-19, recently travelled outside of Canada, or attended gatherings of more than 5 people?
Yes. These are the kinds of "reasonable inquiries" that an employer can make in relation to COVID-19, given that the requests are backed by mandatory government directives imposed to prevent the spread.
Employers should continue to monitor government websites to ensure that their workplace policies and practices reflect the most recent directives. If there is any doubt as to what is and is not permissible, seek legal advice from a qualified employment lawyer.
Can employers bar employees at risk of spreading COVID-19 from attending work?
Yes. Employees who have travelled outside of Canada within the last 14 days; had close contact with a COVID-19 patient within the last 14 days; been diagnosed with COVID-19; or been ordered by a public health authority to self-isolate, may be barred from the workplace, in accordance with government directives.
Additionally, many businesses (especially service-oriented businesses) are sending employees home if they appear to be at risk of spreading COVID-19 (for instance, if they are showing symptoms, or if they report their family members are showing symptoms). If possible, we recommend that employers consider whether the employee can be assigned work from home. If work from home is impossible or impractical, sending employees home in these circumstances would simply amount to a temporary layoff.
Are such employees entitled to pay or government benefits?
In all likelihood, employees who are prevented from working due to suspected or confirmed COVID-19 concerns are entitled to some form of wage replacement, whether that be EI; the COVID-19 emergency benefit; sick or disability benefits under a contract; or WSIB benefits (related to either workplace exposure to COVID-19 or a stress/anxiety disorder). However, such employees are not entitled to their regular salary.
Do we need to report a suspected COVID-19 case to the government?
In most cases, no.
First, employers may (but are not required to) report a suspected COVID-19 case to the public health authority.
Second, employers must only report a suspected case of COVID-19 to the Ministry of Labour if the exposure to the illness occurred at work, or if an employee files for WSIB benefits on the basis of COVID-19 exposure in the workplace.
3. Laying off Employees
Can we impose temporary layoffs related to COVID-19?
Yes, notwithstanding the risks. A temporary layoff is not a termination – it is simply an unpaid pause in employment.
That said, a temporary layoff automatically becomes a termination, under employment standards legislation, after a certain amount of time has passed. Generally, a layoff of 13 weeks or less will not trigger an automatic termination. That 13-week timeline can be extended by an employer meeting certain criteria. The easiest way to extend a temporary layoff past 13 weeks, without triggering an automatic termination (under most employment standards legislation), is to continue the employees’ benefits while on layoff, and preferably, to pay the employee’s share of a co-pay plan. If you are considering a layoff of 13 weeks or longer, seek legal advice on how to avoid triggering a termination under employment standards legislation.
What are the risks of imposing a temporary layoff?
There is some risk that a laid off employee may quit, claim constructive dismissal, and sue the employer for lost wages during a period of "reasonable notice" following the constructive termination.
Not all temporarily laid-off employees have a claim for constructive dismissal. If the employment contract permits temporary layoffs or restricts the employee to his or her minimum entitlements under the Employment Standards Act, 2000, then a layoff likely does not amount to a constructive dismissal.
In all other cases, the "cookie cutter" approach says that a temporary layoff DOES amount to a constructive dismissal. However, our view is that the COVID-19 public health crisis is an exigent circumstance which, a court would likely find, warrants an exception to the general rule.
Lastly, employers can rest easy that the employee’s damages from constructive dismissal, even if proven, will be limited to the actual loss of earnings (i.e., the length of the layoff). There is virtually no risk of the 24-month judgments that employers might fear under normal circumstances. Just ensure that, if you do lay off employees, they are recalled back to work.
How do employers impose a layoff?
There is no specific requirement – the notice of layoff need not even include a recall date. Simply ensure that the notice is in writing, and that the employee is issued a Record of Employment (which the employee can use to apply for EI Benefits).
What government benefits do laid-off employees receive?
Laid-off employees are eligible to receive EI benefits. The 1-week mandatory waiting period has been waived by the federal government, allowing access to such benefits immediately. Those who are ineligible for EI benefits may apply for the Canada Emergency Response Benefit (CERB), which provides a taxable benefit of $2,000 a month for up to four months for workers who lose their income as a result of the COVID-19 pandemic.
Can (or should) employers pay employees on layoff?
It is not required, but yes, employers can. This should be done carefully, however, in order to ensure that these payments are not clawed back by Service Canada. In order to prevent this, employers should register for a Supplementary Unemployment Benefit Plan ("SUBP"). A SUBP can apply to employees who are laid off due a temporary stoppage of work, illness, injury, quarantine, or training.
A company can register a SUBP and begin paying top-up benefits to employees immediately. A SUBP may be registered by completing the forms on Service Canada’s Website and mailing them to the nearest Service Canada office. Assuming the SUBP plan is approved, any benefits paid under the SUBP after the registration date will not be clawed back by Service Canada, in the event that the employee is also receiving EI.
A SUBP may provide for a top-up of up to 95% of the employee’s pre-layoff wages. For this reason, a temporary layoff combined with an approved SUBP can almost eliminate any incentive for a temporarily laid-off employee to claim constructive dismissal.
Are there better options than layoff?
The Government of Canada has just announced a 75% wage subsidy for employees of businesses that can demonstrate a minimum of 30% loss in revenue as a result of COVID-19. The number of employees will not effect eligibility. The subsidy will cover up to the first $58,700 earned or $847 per week. This is a strong incentive for employers to avoid laying off employees even if the amount of work they are able to perform (from home or otherwise) has reduced. More details about this subsidy will be announced soon. We strongly recommend obtaining legal advice based upon your specific circumstances.
4. Reducing Hours and/or cutting pay
Is reducing hours a better option than imposing a layoff?
The answer to this question depends, almost entirely, upon whether a business qualifies for the COVID-19 wage subsidy, which was just announced on Friday, March 27, 2020.
For employers who do not qualify – we recommend laying off employees rather than reducing hours, unless there is some other business reason not to. Cutting employees’ hours and/or pay carries the same risks as imposing a temporary layoff; the "cookie cutter" approach says that a reduction of pay in the range of 15-20% or more will amount to a constructive dismissal. As well, significant and prolonged reductions in pay can trigger automatic terminations under employment standards legislation.
On the other hand, if a company qualifies for the recently announced Federal wage subsidy, we recommend avoiding layoffs, when possible. As more information is released by the federal government, we will be in a position to provide comprehensive advice on this issue. We strongly recommend that employers obtain legal advice specific to their set of circumstances.
Which businesses will qualify for the wage subsidy?
The wage subsidy will be retroactive to March 15, 2020, and will be available to all businesses, non-profits and charities, irrespective of size, who can demonstrate a minimum of 30% loss in revenue resulting from COVID-19.
Is there anything else to know about the wage subsidy?
As with all laws, the devil is in the details. So far, the announcement regarding the wage subsidy is only preliminary, and the technical details, including how to apply and when the funds will be made available, are yet to be determined. Trudeau warned that there will be "severe consequences" to any companies that try to take advantage of the system, though none of those specifics are publicly available at this time.
Employers, therefore, should hold off on making any decisions in reliance on the wage subsidy until those details are finalized by the federal government.
Will employers be able to recall employees from layoff, and apply the wage subsidy to those employees?
Yes. Your decision to temporarily lay off employees is not cast in stone. They can be recalled to work at any time. The federal government is specifically encouraging employers to take this course of action.
5. Other benefits for employers
Both the Ontario provincial government and the federal government have rolled out various other benefits to help businesses through downturns associated with COVID-19.
In addition to the Canadian Emergency Response Benefit and the wage subsidy described above, the provincial and federal governments have introduced the following measures to assist businesses:
- Tax deferral – the CRA will allow businesses to defer provincial and federal tax payments to August 31, 2020, without penalty or interest.
- Business Credit Availability Program – The Business Development Bank of Canada and Export Development Canada will receive more than $25 billion in additional financial support, to be used to support small and medium-sized businesses. Small businesses and not-for-profits, in particular, will be eligible to receive interest free loans of up to $40,000.
- Employer health tax exemption – private sector employers in Ontario with total payrolls of under $5 million are eligible for an Employer Health Tax exemption of up to $1,000,000 in payroll from 2020. This is a significant increase from the 2019 exemption of $490,000.
- WSIB deferral – Employers will be permitted to defer WSIB payments and reporting for up to 6 months, without interest.
If you have any questions regarding the foregoing, or any other questions about navigating employment laws in the context of COVID-19, do not hesitate to reach out to Hyde HR Law for expert legal advice.
