June 26, 2020

McLennan Ross Update for Friday

By McLennan Ross Labour & Employment Team
What we are seeing
  • Bill 24 (COVID-19 Pandemic Response Statutes Amendment Act 2020) passed a third and final reading yesterday in the Legislature. This legislation extends the period of temporary layoffs from 120 days to 180 days, and it is effective as of June 17, 2020. The new legislation still requires royal assent to be in force, and that should occur soon. 
  • On June 25, 2020, the Government of Canada announced additional financial support for students
  • Highlights from the announced support include:
    • The launch of the Canada Student Service Grant (CSSG) which will support post-secondary students and recent graduates as they volunteer to assist with their communities' COVID-19 response by providing a one-time payment between $1,000 and $5,000 based on the number of volunteer hours served. 
    • Investment of $186 million in the Student Work Placement Program to assist post-secondary students obtain paid work experience related to their field of study by funding an additional 20,000 job placements in high demand sectors.
    • Investment of $60 million in wage subsidies for employers to create 10,000 new job placements for young people between the ages of 15 and 30 through the Canada Summer Jobs program.

What we are hearing
  • The creation of a single health unit under Alberta Health Services (AHS) and the resulting centralization of the delivery of healthcare to Albertans was met with some resistance when it was implemented in 2008. There continues to be some criticism of AHS, especially with respect to its annual per capita costs to the public. However, AHS' centralized response to the COVID-19 pandemic and its ability to regulate public health directives has been a strong positive as compared to other provinces with multiple health units.
  • Although Alberta's implementation of its relaunch strategy has been in uniform, the public health guidance from AHS is issued to the entire province. That is not the case in other provinces. In Ontario, for example, neighbouring health units are implement different rules regarding such things as physical distancing and the use of masks. This is leaving some employers frustrated, as some customers are choosing which business to frequent based on whether they have to wear a mask.

What we are saying
  • We continue to see counsel for plaintiffs in wrongful dismissal claims suggest that the stagnant job market caused by the pandemic is a factor that works solely to the benefit of employees in determining their notice entitlement at common law. We have yet to see a judicial decision support that conclusion and we believe that this conclusion is flawed. 
  • An example of the logic used by plaintiff counsel is that the courts have on occasion commented that a depressed local economy can support a longer notice period. Indeed, one of the Bardal factors considered by courts in assessing a notice period at common law is the availability of replacement income for a person with similar characteristics as the employee (age, education, work experience, management responsibility, etc.). Plaintiff counsel, however, have suggested that the paused economy caused by COVID-19 will necessarily result in a longer notice period for the terminated employee in order to give that employee a reasonable opportunity to find replacement income. 
  • This logic is flawed in that it ties the time required for that specific employee to find a job, as opposed to a reasonable person with the employee's personal characteristics. A notice period is not an insurance policy, compensating a particular employee until he or she finds a job. Indeed, how long the employee actually takes to find a job is expressly not a Bardal factor and therefore should be irrelevant. Nevertheless, the evidence on that point may on occasion be referred to as evidence that substantiates the court's assessment of the appropriate notice period using the Bardal factors.
  • In our opinion, the courts will not foist the economic cost of a global pandemic solely on employers struggling to rebuild their businesses as the economy reopens. As long as the court agrees that the termination was done in good faith, the notice period for a terminated employee now should be no different than that employee's notice period in February 2020. Time will tell whether courts accept this logic, and employers should be prepared for either possibility.

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