March 31, 2020

McLennan Ross Update for Tuesday

By McLennan Ross Labour and Employment Team

What we are seeing
  • As we mentioned in our blog yesterday, the Government of Canada announced on March 27, 2020 that it was increasing its small business wage subsidy from 10 percent to 75 per cent for qualifying businesses for up to 3 months, retroactive to March 15, 2020. The Government promised that more details on eligibility criteria would be announced prior to the end of March. Although we are still waiting for a formal press release, Prime Minster Trudeau provided some additional details during his press briefing on March 30, 2020:
    • The subsidy will be available for all business irrespective of size;
    • In order to qualify, a company must experience a decrease in revenues of at least 30%;
    • The Government will cover up to 75% of a salary on the first $58,700, which could mean payments of up to $847 a week. 
    • The Government will encourage businesses to top up their employees’ wages with the remaining 25% of their salaries.
  • We will be interested to see the guidance from the Government regarding how to calculate the 30% decrease in revenue, especially for businesses whose requests for goods or services are down dramatically but revenue realization generally occurs more than 30 to 60 days after completing a job order. 
  • We are also waiting to see if the 10% wage subsidy program, which was different in terms of quantum of benefit, but also in implementation, effective date, and the businesses which qualify, is withdrawn or if it is still available for companies which do not meet the 30% decrease in revenue requirement, either immediately or at all.

What we are hearing
  • There continue to be temporary changes made to Employment Standards legislation across the country. For example, British Columbia, Ontario, Saskatchewan, and Alberta all introduced a two-week job-protected leave if an employee had to self-isolate or was caring for a dependent required to self-isolate. Manitoba very recently announced a temporary exception to its Employment Standards regulations to give employers more time to recall employees laid off as a result of COVID-19. Under its existing Employment Standards legislation, employees who have been laid off for 8 or more weeks in a 16-week period were deemed to be terminated and entitled to wages in lieu of notice. The Province introduced temporary amendments that would ensure any period of layoff occurring after March 1, 2020 would not be counted toward the period after which a temporary layoff would become a permanent termination. We expect the Government of Alberta will similarly extend the layoff period before a deemed termination occurs.
  • The Chief Medical Officer has changed one of her instructions about people who are quarantined being allowed to go outside. While this was previously allowed, people in mandatory self-isolation are now prohibited from leaving their homes even to walk in their neighbourhood. Such people can get fresh air in their backyard, as long as they stay on private property. People who live in an apartment building or high-rise must stay inside and cannot use the elevators or stairwells to go outside. If their balcony is private and at least 2 meters away from the closest neighbour's, they may go outside on the balcony.

What we are saying
  • There is some uncertainty as to whether parties continue to have the obligation to move court actions forward despite court access being limited to urgent or emergency matters. The Court has suspended all “filing deadlines” found in the Alberta Rules of Court. Whether this suspension applies to deadlines which do not involve the filing of documents is not clear. For example, the Rules require a plaintiff to serve an Affidavit of Records within three months of receipt of a filed Statement of Defence, with a defendant’s Affidavit of Records due two months after receipt of the plaintiff’s Affidavit of Records. The Affidavit of Records is not filed before it is served. As such, it is not clear whether the direction of the Court suspending filing deadlines applies to service of an unfiled Statement of Defence. There is a penalty imposed on any party which does not meet its deadline for service of the Affidavit of Records; however, the Rules do say that the penalty will not be assessed if the party has “sufficient cause” for not meeting the deadline. It is probably that the Court will find a state of emergency due to a pandemic qualifies as sufficient cause.
  • Even if there is no obligation of the parties to move litigation forward, there may be practical reasons to do so. There will inevitably be a backlog of applications and appearances once the courts reopen and matters which were previously adjourned are rescheduled. This backlog will only exacerbate the demand on judicial resources already stretched thin prior to the pandemic. There may also be no more optimal time to focus on the issues in litigation while other business demands are lessened. Finally, claimants may be more willing to compromise and accept a reduced but certain amount as opposed to holding out for a higher amount, which will require waiting for the claim to make its even longer way through the court process to trial.

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