McLennan Ross Update for Monday

By McLennan Ross Labour & Employment Team

What we are seeing

• As we discussed previously, the Government of Canada and the provinces reached agreement to implement the Canada Emergency Commercial Rent Assistance (CECRA) for small businesses. This program will lower rent by 75% for small businesses that have been affected by COVID-19.
• The program covers 50% of 3 monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June, with the landlord and the tenant being responsible for 25% each.
• Landlords and tenants are making various arrangements between them. Some landlords are continuing operating costs but forgiving or deferring rent for a limited time. A big question is whether tenants will survive given reductions in business or prohibitions on operating. The longer the restrictions continue, the greater the risks.
• The program requires qualified commercial property owners to apply. Some commercial landlords may not want to support a tenant for 3 months when the landlord believes the tenant has no viable chance to survive. Further, if the landlord does participate in the CECRA program, it is a condition that the landlord cannot evict the tenant while the agreement is in place (though finding new tenants would also be a challenge for landlords).
• The program allocates the rent cost between the program, the landlord, and the tenant, but landlords still have mortgage obligations to financial institutions. Although some banks are deferring mortgage payments, they are not being reduced so the ultimate debt obligation for the landlord will still have to be paid in full eventually.

What we are hearing

• The Government of Alberta will be announcing the implementation of its relaunch strategy on May 12, 2020. As we previously summarized the Alberta strategy called for some immediate easing of restrictions followed by reopening in stages, with each stage being dependent on the province's ability to keep infection numbers low, based on metrics such as hospitalizations and Intensive Care Unit occupancy.
• The Government's plan document stated that "[c]onfirmed cases will be monitored in real time to inform proactive responses in localized areas of the province." This phrase has been confirmed by Premier Kenney to mean that not all parts of the province will reopen on the same schedule with decisions being made based on regional statistics.
• Although better than the alternative, businesses with operations in multiple provinces who were already having to juggle multiple reopening strategies may now also have to accommodate different regulatory requirements within the province as well.

What we are saying

• As we have discussed previously, as the reopening of the Alberta economy is slowly being implemented, employers are starting to issue recall notices. Some issues that we anticipate arising include the following:
• Does an employer have to recall an employee who was temporarily laid off? No, there is no obligation to recall an employee. An employer can still terminate the employment relationship as long as the termination is not due to a reason prohibited by statute such as the Alberta Human Rights Act, the Workers Compensation Act, or the Occupational Health and Safety Act. The employee would still be entitled to the appropriate amount of pay in lieu of notice as determined by statute as well as under any employment agreement or at common law.
• Can an employee refuse to return to work because he or she feels subjectively unsafe? Employers have the obligation to ensure that the work environment is safe for employees, but an employee's subjective fear of contracting COVID-19 is not sufficient to allow the employee to refuse to attend work.
• Can an employer terminate an employee who cannot return to work due to having COVID-19 or caring for a family member who has COVID-19? As a general rule, no. Employer absenteeism policies must not negatively affect employees who cannot work in connection with COVID-19. An employer may not discipline or terminate any employees who are unable to come to work because medical or health officials have quarantined them or have advised them to self-isolate and stay home in connection with COVID-19. This could include a situation where another family member is ill or in self-isolation. The Alberta Ministerial Order providing family leave related to COVID-19 is still in effect. There is protection from termination for employees on this leave.
• Can an employee refuse to return to work due to childcare obligations? Again, under the Ministerial Order an employee is entitled to unpaid leave for the period of time recommended or as directed by the Chief Medical Officer to meet the employee's responsibilities in relation to a family member who is under quarantine or in relation to a child due to school or daycare closures. An employer is entitled to request reasonable documentation to support the leave, but a medical certificate cannot be required. Even after this leave no longer applies, there is a duty to accommodate employees based on family status, if an employee can show there are no other reasonable options for childcare. This duty to accommodate may continue until alternate childcare options are available unless accommodation would cause the employer undue hardship. Whether the other available options are reasonable (such as due to cost or time restraints) and whether the absence would cause the employer undue hardship, would need to be determined on a case-by-case basis.
• As each situation may have some nuances, we recommend consulting experienced Employment Law counsel before proceeding with a termination where the employee is suggesting that a return to work in the time called for in the recall notice is not possible.