March 19, 2020

McLennan Ross Update for Thursday

By McLennan Ross Labour & Employment Team

What we are seeing 

  • Both the federal and the Alberta governments announced measures to provide financial support to businesses during this crisis.  
    • Our summary of the announcement from the Canadian government can be found here
    • The Alberta government’s support package is primarily the delaying of  payment of corporate income tax balances and installment payments and clarifying that employees on leave due to either having COVID-19 or being required to self-quarantine will be compensated during the leave through Employment Insurance benefits and the Emergency Isolation Support program. This is good news to employers who were concerned about having to provide paid leave to such employees. Read about the details here.   
  • An option available to some employers to continue operations but with reduced capacity is to apply for the federal government’s Work-Sharing Program. The Work-Sharing Program aims to help employers avoid layoffs and provide employees with income support during times of temporary reduction in normal business activity outside of an employer’s control. Work-Sharing is available to employees eligible for Employment Insurance benefits and requires that employees agree to a reduced schedule of work. Employers and employees must apply for the program together (with union involvement, if applicable). In response to the COVID-19 outbreak, the federal government has waived the mandatory 30-day waiting period for Work-Sharing agreements and has extended the number of weeks that benefits may be received from 38 weeks to 76 weeks. These special measures will remain in effect until March 14, 2021.

What we are hearing 

  • The Alberta Human Rights Commission has issued an information statement regarding COVID-19 that can be found here. It is important to note that this statement has no precedential value and should not be considered as a binding interpretation of the Alberta Human Rights Act. The same guiding legal principles and decisions used prior to the pandemic will be the foundation for any future analysis of whether an employer’s conduct during this crisis constituted discrimination under the Act. For a summary of those principles with respect to family status, please see our e-alert here.
  • Alberta Occupational Health and Safety has not yet provided any significant guidance to employers regarding its obligations under the Act and Code with respect to COVID-19 other than a general summary which can be found here. As such, we continue to recommend employers follow our pandemic planning checklist which can be found here.
  • McLennan Ross LLP, like most other law firms, is trying to provide real-time information to its clients and to employers generally regarding legal issues arising from the pandemic. It is important not to rely solely upon this summary information for important business decisions. We have seen incorrect or overgeneralized information being provided to the public by other firms. We recommend employers consult legal counsel before making such important labour and employment decisions.

What we are saying 

  • Employers can rescind offers of future employment which were made prior to the COVID-19 crisis, but you must be mindful of the possible legal consequences. As with most employment relationships, the terms of any written employment agreement are key, which often is comprised of little more than the offer letter:
    • If your offer letter or executed employment agreement reserves the right to terminate within the first three months of employment with the payment of any notice, we expect you can rely upon that clause to terminate prior to the commencement of the relationship without employee recourse.
    • If, however, your employment documents describe the first three months as a “probationary period”, there is a 2017 decision from British Columbia which found that using such a term required the employer to actually evaluate the employee’s performance and did not permit termination prior to commencement of employment.
    • If your employment documents are silent regarding termination, you may owe the employee pay in lieu of notice despite the employee having never actually worked for you. In the same British Columbia decision referenced above, for example, that employee was awarded pay in lieu of 6 weeks’ notice.

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