COVID-19 - Unprecedented times, unprecedented solutions

Canadian employers are trying to navigate the unchartered and unforeseen waters of COVID-19. The reality they face is a blunt shortage of work and cashflow issues. These employers have to make tough business decisions on how to manage employees with no work to be done. This article focuses on some innovative, albeit radical, solutions employers may consider when rolling out their COVID-19 workplace strategies.

When making these difficult decisions employers are encouraged consider all possible avenues. Some of the relevant considerations include: the available benefits, the available options, and the innovative solutions that may be available in light of COVID-19. As always, before making any hasty decisions, employers should speak to an employment lawyer first.

1. Available Benefits

The Canadian federal government has announced a number of measures to help employers and employees during these difficult times. These measures include:

  • Employment Insurance (EI) - waiving the normal one week waiting period for access to EI sickness benefits, and waiving the requirement for a medical certificate;
  • Canada Emergency Response Benefit (CERB) - payments of up to $2,000.00 per month until October 2020 for workers who are not eligible for EI; and
  • Wage subsidy - up to 75% of wage subsidy for qualifying businesses, for up to 3 months.

Additionally, many of the provinces have announced their own measures to help protect businesses and workers. For example, in Saskatchewan, employees may be eligible for payments up to $900 to replace lost income, and in British Columbia, the government is making $1000 payments to workers impacted by COVID-19.

Employers are encouraged to inform themselves on the specific benefits that might be available to them and their employees.

2. Available Strategies

Employers have options when designing COVID-19 workplace strategies shy of mass termination, including:

  • Unpaid Emergency Leave of Absence (ELA) - most provinces have amended their employment legislation to provide an unpaid ELA to employees impacted by COVID-19;
  • Temporary layoff - with or without continued benefits, and with or without supplementary unemployment benefits (SUB); and
  • Workshare agreement - the federal government has announced that the maximum duration has been extended to 76 weeks.

Unfortunately, none of these options are great. They may even be downright unlawful based on pre-COVID-19 law. They all carry some level of risk of an employee subsequently claiming constructive dismissal, among other claims.

So, what should employers do? Which option should they pick?

3. Innovative Solutions

As we have heard numerous times from our politicians, unprecedented times call for unprecedented solutions. Employers need to adopt that same approach.

Normally, employers should be careful not to treat employees differently. Amidst COVID-19, a differential approach may be the best approach. Employers should precisely treat employees differently, so that they can act, as much as possible, with each employee's best interests in mind.

For example, some employees might have to be placed on a layoff. For these employees, EI benefits or CERB may cover a good percentage of regular wages. Other employees may be content being placed on an unpaid ELA regardless of whether they are actually entitled to an ELA. Yet for other employees, it may be beneficial to recall or reinstate from a layoff or ELA and turn to the 75% federal wage subsidy, provided the employer has cash reserve to foot the remaining 25%.

The analysis could stop there. However, employers can also consider garnering employee consent to a temporary pay cut, wage deferral, or both. Going back to the example above, an employee facing a layoff might be willing to agree to a temporary pay-cut instead. Similarly, an employer who does not have sufficient cash reserve to cover the remaining 25% of wages but wishing to utilize the 75% federal wage subsidy program may consider soliciting the employee's agreement to a wage deferral for that remaining 25%.

There is not necessarily a one-size-fits all solution, so there should not be a one-size-fits all approach. In fact, there is no reason why employers should not utilize all of the benefits available to employers and employees and treat their employees accordingly, as long as the decision in every case is made based on an objective review of the financial impact on the employee in dollars and cents.

Ultimately, all of these benefits are intended to keep employees employed and paid amidst crisis. Therefore, employers are encouraged to utilize them to the fullest extent, in order to satisfy as much as possible obligations to pay wages.

Thus, employers are encouraged crunch numbers, map out which scenarios work best for different groups of employees, and strategize accordingly.

By taking some time to do the math, employers can make the best decisions for their unique circumstances. This way, employers can be better assured that decisions are not being made in bad faith, but rather, are based on objectivity and quantitative financial impacts. This could go a long way to mitigating exposure to constructive dismissal claims down the road.

Lee Workplace Law would be happy to assist you in developing a COVID-19 strategy that is right for your business.

*Drafted with the assistance of Hannah Goranson