What Effect Will Covid-19 Have On My Business?
On March 11, 2020, the World Health Organization (WHO) announced that COVID-19 was a pandemic. The global spread of what experts have referred to as the “novel coronavirus” has had a significant impact on all of our businesses, communities and way of life.
In particular, as a result of the ordering of mandatory temporary closures of a variety of businesses and the encouragement of self-isolation by the Government of Ontario, employers and their corresponding employees have been left in a state of uncertainty. At Tailor Law, one of our specialist legal practices is employment law and we understand how confusing and frightening it can be when your very livelihood is threatened by forces outside of your control.
The following Frequently Asked Questions and Answers may be able to shed some light on your position:
My business has been deemed an “essential service” but my employees do not want to return to work as they do not feel safe. Can I require them to return? If they refuse to return, what can I do?
Where an employee has reason to believe a workplace is likely to endanger their health or puts them at risk, they may have the right to refuse to work there. An employer has a duty to take every precaution reasonable in the circumstances for the protection of their employees.
In order for an employee to justify not coming to work, they must typically prove there is a clear and present danger which will depend on the kind of work they perform and any other relevant circumstances. There must a be real risk to their health and any right to stay at home would only last as long as the threat of potential infection was present.
In these circumstances, where operationally possible, employees should be allowed to work from home. If this is not possible, proper sanitation measures should be taken which could include making easily and widely available, hand sanitizers and disinfectant wipes as well as increasing cleaning operations for common contact surface areas. Information about proper health protocols should also be visibly posted and distributed for employees to view and encouraging the avoidance of close contact with each other is also advisable. Where your business interacts with members of the public or visitors, these meetings should be conducted virtually if possible or, if in person, contact should be kept to a minimum following public health policies.
Without a reasonable belief, held in good faith of the risk of infection, and where operationally impossible to work from home, if an employee still chooses not to attend the workplace, you may be able to terminate that employee’s employment as they have breached their employment contract. Before taking such action however, we would suggest discussing the employee’s concerns with them. If this is a situation you are facing, please contact us to discuss your options so we can ensure any actions you take are compliant with employment law.
If an employee is required to be at home to care for a child, you are required under human rights law to make reasonable accommodations for them which could include allowing them to work from home or more flexible hours where this is operationally possible. If it is not possible, the employee is entitled to job-protected unpaid leave. You are entitled to ask for evidence that is reasonable in the circumstances that the employee is entitled to take this protected leave. Such evidence might include a note from a closed daycare because of the declared emergency. While on this leave, the employee has the right to continue to participate in an employer’s benefit plans and to require you to pay your share of contributions during the leave.
Can I temporarily lay off my employees?
Ontario law does permit temporary lay offs of varying lengths as long as the employee is recalled within a certain time period as specified by the Employment Standards Act, 2000. However, the ability to temporarily lay off employees must usually be expressly reserved in the employment contract or in a workplace policy that is incorporated into the employment contract. There may be some circumstances where such a right is implied but these situations are heavily dependent on the prior history of employment of an employee and the nature of the industry in which your business operates.
Where no right to temporary lay off exists in the employment contract or has been implied by case law, a unilaterally imposed temporary lay off could be considered a “constructive dismissal” and could make an employer liable for severance pay. Furthermore, a lay off that lasts longer than the designated statutory period could also be considered a “constructive dismissal”.
If you are considering laying off any of your employees, you should always seek their agreement if this right has not been reserved in their employment contracts/in a workplace policy that is incorporated in their employment contracts. It should be noted that employees may still be entitled to claim for the Canada Emergency Response Benefit (“CERB”) if they have been temporarily laid off. Please contact us for a free consultation to learn more about your specific situation.
I have to close down my business because of COVID-19. Do I have to pay my employees severance pay?
If you are declaring bankruptcy then your employees would not be entitled to severance pay. In the absence of this, employees would ordinarily be entitled to it and the amount would be determined in accordance with their employment contract, age, length of employment, employment standards law and potentially other factors.
Can I reduce employee’s pay/hours/benefits, etc. while the COVID-19 pandemic is ongoing?
You can make changes to the terms of an employee’s employment but only with their agreement. Otherwise, you cannot force an employee to accept any significant and harmful changes. Any such changes made could constitute a “constructive dismissal” and an employee may be entitled to damages. In order to claim constructive dismissal, the employee however would be required to leave the workplace and look for another job which may be very difficult given the widespread nature of this pandemic. In some circumstances it might be preferable for an employee to accept reasonable temporary pay reductions so that they can remain employed. We would suggest employers to be open with their employees during this difficult time and explain and seek their agreement to any changes to wages or hours that are necessary for the continued and future operation of your business.
Alternatively to reducing an employee’s wages or hours, it should be noted that the Government of Canada has created various financial initiatives to support businesses during this time. These include the Canada Emergency Wage Subsidy (“CEWS”) and a temporary 10% Wage Subsidy. An employer may also be able to implement a Work Sharing program or obtain interest free loans from the Canada Emergency Business Account (“CEBA”). For a full list of what Government initiatives are available for businesses, click here to be directed to the Government of Canada website.
What can I do if a working employee has contracted COVID-19?
On March 19, 2020, Ontario legislature passed Bill 186, the Employment Standards Amendment Act (Infectious Disease Emergencies), 2020 (“the Act”) which, in very general terms, expands the scope for employees to job-protected unpaid leave while a state of emergency is declared and/or an infectious disease (as designated by Provincial Government regulation) is inhibiting an employee from performing work for a variety of reasons. In addition to protecting an employee from termination due to them being required to care for a family member, this type of leave would also cover an employee who has contracted COVID-19 or is in isolation or quarantine for COVID-19 related reasons.
While you cannot request medical notes in relation to this form of unpaid leave, you may be entitled to request other forms of evidence that is reasonable in the circumstances at a time that is reasonable in the circumstances. This form of protected leave is retroactive to 25 January 2020.
If you believe an employee has contracted COVID-19, or has recently interacted with someone who may have contracted COVID-19 or has recently returned from abroad then you may wish to direct that employee to stay at home temporarily. An employer should not inform other employees of the identity of the employee who has a confirmed diagnosis of COVID-19 or provide any identifying information about that person. If there is a need to provide identifying information, they should obtain specific legal advice before doing so.