May 27, 2020

McLennan Ross Update for Wednesday

By McLennan Ross Labour & Employment Team
What we are seeing

  • The Government of Canada has extended the Canada Emergency Wage Subsidy (CEWS), which provides subsidies to help businesses keep employees on payroll or re-hire workers previously laid off, to August 29, 2020. The Government has created an on-line calculator to help determine eligible subsidy amounts.
  • To date, the Government has not stated whether it will extend the Canada Emergency Response Benefit (CERB) beyond its initial 4-month time limit. The Government has paid out over $40 billion in CERB payments since being implemented, although a percentage of that amount will be returned to the Government when recipients pay taxes on the amount received and recovers improperly paid benefits. 
  • A concern with the CERB is that it may create too much of an incentive for employees not to return to work. As it is not taxed when paid, and as the benefit is the same $500 per week irrespective of the employee's past earnings, the subsidy in Alberta is roughly the net equivalent of an employee earning $17.00 an hour for a 40-hour work week; $19.00 an hour for a 35-hour work week and over $22.00 an hour for a 30-hour work week. Although some tax will have to be paid on the benefit amount at some point, many entry level employees would prefer to have the cash in hand now (without having to work) and will address the tax issue next year.
  • With the provincial economies re-opening across the country, and employers needing their employees to return to work, even if on reduced hours, it would be counterintuitive for the Government to continue a benefit that gives employees an attractive alternative to returning to work.

What we are hearing

  • On May 25, 2020, the federal Government announced it was in discussions with the provinces to ensure that "every worker in Canada who needs it has access to ten days of sick leave a year." Alberta, unlike some provinces in Canada, does not currently statutorily guarantee that employees must be given paid sick leave. Most provinces that do have such a guarantee only guarantee employees 3 sick day per year. The reaction to this announcement from businesses has been strongly negative. If the leave does not require a doctor's note, it will invariably lead to employees treating the sick leave as additional vacation and taking more time away from work. If, to address this concern, a doctor's note is required to take advantage of the sick leave, it will also place an increased burden on the healthcare system. As employment standards fall within provincial jurisdiction other than for federally regulated industries, it will ultimately be up to the Alberta Government to implement such a program. We expect this program will be limited to sick leave related to COVID-19, at least initially, since that is what it is intended to address, particularly once the CERB ends. 
  • The various Government of Canada programs available to energy producers in Alberta seem to be providing some relief for employers, although many are disappointed by the strings attached to the relief programs or are taking a wait-and-see approach on their effectiveness. These programs include:
    • Interest free loans from the Business Development Bank and loan guarantees of up to $100 million per company from Export Development Canada;
    • The Large Employer Emergency Financing Facility (LEEFF), which provides financing up to $60 million, but with strings such as limits on executive pay, dividends, and share buy-backs;
    • The CEWS that is discussed above;
    • The Well Cleanup Program; and
    • The creation of the methane reduction fund.
  • The CBC has summarized each program that it believes may be of assistance for energy producers and how they have been received to date.
  • As all of Alberta is now at Stage 1, with Stage 2 tentatively set to be implemented in mid-June, it is more important than ever to follow the advice of Alberta's Chief Medical Officer to avoid a step back in the relaunch strategy. The Government of Alberta has also finally followed the direction of this blog by reducing its COVID-19 news conferences from daily to only holding them on Mondays, Wednesdays, and Fridays.

What we are saying

  • The federal Government continues to support the operation of the Temporary Foreign Worker Program (TWF) and the Seasonal Agricultural Worker Program (SAWP) in all Provinces during the COVID-19 pandemic, recognizing the vital role these workers play in supporting food security and other industries critical to the Canadian economy.
  • The Government of Canada recently modified the criteria relating to the Temporary Foreign Worker Programs and published a brief guide to assist employers in understanding these changes. Key components include: 
    • Foreign workers must complete the 14-day period of quarantine upon arrival as outlined under the Quarantine Act, and the employer must ensure the worker does not interact with workers or other persons who are not in quarantine.
    • The worker's period of employment begins upon arrival to Canada and includes the mandatory quarantine period.
    • The employer must pay the worker regular pay and benefits for the quarantine period including a minimum of 30 hours per week at the hourly rate of pay specified on the Labour Market Impact Assessment (LIMA) and/or offer of employment. For SAWP workers, the 14-day period of paid quarantine will be in addition to the minimum 240 hours of pay as specified in the SAWP contract. 
    • The employer cannot authorize the worker to work during the quarantine period, even if requested by the worker, although there are some discrete exceptions, such as providing an essential service. 
    • The Canada Emergency Response Benefit (CERB) may be available to workers; however, CERB is not available for the initial quarantine period. 
    • Employers must not terminate the employment contract due to a worker contracting COVID-19.
    • If workers become ill after the initial quarantine period, they may be entitled to either paid or unpaid sick leave, depending on their employment contract and the relevant federal or provincial employment standards, including any newly enacted legislation for job-protected leave because of COVID-19.
  • If employers provide accommodation, there are additional guidelines:
    • Employers must house quarantined workers in accommodations that are separate from those not subject to quarantine.
    • The employer may house workers who are subject to quarantine together, but the housing must enable them to be 2 metres apart from each other at all times, although shared facilities (for example bathroom, kitchen, living space) are allowed.
    • If a new worker arrives at the accommodation facilities during the quarantine period, the quarantine period restarts. 
    • The employer is required to provide cleaning materials. 
    • If a worker becomes symptomatic, the employer is required to immediately provide accommodations that enable the worker to be isolated from others. 
  • The above requirements have created significant changes to Alberta's farming industries. The delays in ensuring workers arrive on time is compounded by the mandatory quarantine period, resulting in anticipated substantial loss of business profits. If your business is encountering challenges with meeting the requirements of the SAWP or TFW programs, consider posting the available employment positions on the Alberta Agricultural Job Connector.

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