COVID-19 Layoffs and Applying For Employment Insurance / CERB| Authors: Jordan Reiner & Bram Lecker.
Ontario has declared a state of emergency due to the COVID-19 pandemic. This, in turn, has resulted in schools, daycares, and non-essential businesses shutting down or operating at reduced capacity, until further notice. For example, restaurants and bars remain open, but only for take-out service. Organizers have cancelled events and conferences, directly impacting revenues of hotels, catering and other hospitality-related establishments. In addition, supply chain or demand shortages, and inadequate staffing levels due to illnesses, have started to impact many workplaces. With the wheels of commerce grinding to a halt, COVID-19 layoffs are now a reality for many. This article will help Ontario employees understand their rights under these circumstances.
COVID-19 layoffs
The law permits businesses to conduct layoffs under very clear and specific conditions. Government-mandated social distancing and closures require employers to act. This leaves some with little choice but to declare layoffs. According to the Employment Standards Act (ESA), employers must follow clear rules under these circumstances. A layoff constitutes a temporary interruption of employment if you earn less than 50% of your former income for one week or more.
Canada Emergency Response Benefit
The federal government is pulling out all stops to support people who have lost their source of income because of government-directed shutdowns. We will attempt to keep this page updated with the latest announcements. On March 25th, 2020 the Prime Minister announced a new Canada Emergency Response Benefit (CERB).
This program will temporarily replace the existing Employment Insurance benefit plan as well as those announced last week for uninsured Canadians, namely, the Emergency Care Benefit and Emergency Support Benefit. The CERB will pay applicants $2,000 every four weeks from March 15 until October 3, 2020.
Service Canada will launch an application portal as quickly as possible and are targeting April 6th, 2020 as the launch date. They expect people to start receiving money within 10 days of applying. The government is redeploying workers from various departments to deal with increased applications.
What if You Have Applied For Or Are Currently Receiving EI?
Canadians who have completed an EI application online will be transitioned to the new system once it is up and running. If you are currently receiving EI regular and sickness benefits, you will continue to receive payments, and should not apply to the CERB. However, you may do so if your current benefit ends and you remain without employment due to COVID-19 on October 3, 2020.
Who is Eligible for CERB?
Anyone who has lost income due to a COVID-19 layoff, regardless of whether you contributed EI premiums or not, is eligible. This includes wage earners, those on salary, contract workers as well as self-employed individuals. You may access this benefit if you are sick, quarantined, taking care of someone sick, or looking after children. It will also be accessible to those who are still employed, but who are not receiving income due to disruptions caused by the COVID-19 crisis.
COVID-19 Layoffs: Unknown Recall Date
Temporary layoffs usually require a clear recall date. However, employers are currently struggling to provide clear answers about this to their employees because much depends on the trajectory of the pandemic and government directives. Your Record of Employment may note the recall date as “unknown”. This could very well become a matter that will strain employment relationships over the next few weeks.
In this situation, we recommend you keep the lines of communication open with your employer by knowing whom to contact. You may ask pointed questions about your job status and a foreseeable return to work date. Where possible, obtain instructions in writing. At the very least, you should confirm your understanding of the discussion with a follow-up email to your employer.
Working While on Employment Insurance
The original Employment Insurance program allowed you to supplement your income with other work, to a maximum of 1/3 of your income, while also receiving EI benefits. However, if you happen to earn more, then Service Canada normally clawed your EI benefits back, dollar for dollar. We are unsure about similar allowances under the CERB at this time.
Also, the federal government allowed employers to offer employees job-sharing options to prevent complete layoffs. Here, you could continue to earn up to 2/3 of your salary and the EI program would come through with the balance, up to a maximum allowable amount. With the EI program temporarily becoming the CERB, we do not know how job-sharing options will work. We will provide details if and when they become available.
Note that if your employer is considering job-sharing options at your workplace, they cannot unilaterally impose terms on you. They require explicit agreement from affected employees groups and the arrangement can last up to 35 weeks. Employers may not necessarily issue ROEs in this case, however, they must initiate the application with Service Canada.
Termination or Layoff?
Employees should also recognize the difference between a legally sanctioned layoff, a sham layoff, and a termination. The COVID-19 pandemic offers employers a legitimate reason for laying staff off. You must ensure you understand whether this is a temporary layoff or a permanent termination.
The law requires employers to offer you notice or termination pay commensurate with your circumstances if they end your employment permanently. This makes terminations expensive for employers, particularly when they involve long-term and senior employees. Your employer could try to avoid the impending “butchers bill” by disguising your termination as a layoff.
Threat Of A Recession
If the pandemic continues for many more weeks, economists predict the economy will teeter towards a recession. During this time, a majority of employers will genuinely do whatever they can to preserve jobs. However, we advise employees to remain vigilant about your rights during these trying times. As employment lawyers, we have witnessed how unscrupulous employers maneuver to avoid their legal obligations. Tenured and senior employees remain particularly vulnerable to such foul play if your employer believes a junior employee could perform your job for less pay.
Accordingly, these employers will begin a campaign of unpredictable and ad-hoc layoffs over the next little while, citing the economic downturn as a reason. Others will start to bully and treat you poorly. Others yet may try to unilaterally change terms of your employment, reduce bonus payments and alter pre-agreed commission rates. Recognize these as attempts to frustrate you into quitting. Unwilling resignations constitute a constructive dismissal and all situations described above remain completely against the law.
In this situation, you require legal assistance. Contacting us right away will allow us to act swiftly to preserve your job, or to negotiate a fair severance package for you. Lecker & Associates has represented employees for over 35 years. Wrongful dismissal and negotiating severance packages are a cornerstone of our practice. If you believe your employer has not acted fairly with you during the COVID-19 pandemic, contact us.
About the Authors
Jordan Reiner, B.A., M.A., LL.B., is an employment lawyer and partner at Lecker & Associates. He takes the lead on counselling clients with their employment contract negotiations and aggressively advocates for them against human rights violations, wrongful & constructive dismissal.
Bram Lecker, B.A., LL.B., is the Principal of Lecker & Associates and one of the most experienced employment lawyers in Ontario. Consistently ranked among the top three in Toronto, he actively plays a role in all client cases primarily as a mentor and steady hand to his stellar team.
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