COVID-19 FAQ for employers with questions.
During this trying time, everyone is adjusting to a new normal. For employers and employees, there are legal changes – and challenges – that are causing questions. Employment law can be confusing, especially with the constant changes as we navigate the pandemic.
Below are common questions and answers, please note the information provided is for information purposes only and should not be a substitute for legal advice.
Am I required to close my business if we revert back to stage 2?
You may be. It would be applicable if your workplace is considered “non-essential”. This list is as of April 2020. https://www.ontario.ca/page/list-essential-workplaces Should a second wave require closures, the government will details what businesses are impacted. In addition to the link, you can call a government line, 1-888-444-3659, to gain more information.
What if I don’t comply with business closure guidelines?
The fines for non-compliance can be significant:
– For individuals up to $100,000.00 and imprisonment up to one (1) year
– For corporations, up to $10,000,000.00
– For officers and directors, up to $500,000 and imprisonment up to one (1) year
Can employees be temporarily laid off?
If your business is unionized, the Collective Agreement should define layoff procedures. Consult with the union’s representative. For non-unionized employers, the contract of employment must state that the employer is entitled to lay employees off for temporary periods of time. There is no implied right of layoff under the law. Any employer who lays off an employee without the right to do so is at risk of being sued by the employee (they have up to two years to sue after the layoff).
When an employer has contractual rights to layoff employees, they still must follow the provisions of the Employment Standards Act, 2000 (“ESA”) – specifically, Section 56. The ESA defines a temporary layoff as a lay-off of not more than 13 weeks in any period of 20 consecutive weeks. The lay-off may be extended to a maximum of 35 weeks under certain specific circumstances.
Can employee hours or compensation be reduced?
Legally speaking, employees must consent to changes to their hours or compensation, unless the contract of employment expressly allows for such changes.
What are my obligations for notice and/or severance if I let employees go permanently?
Minimum obligations for notice of termination or payment in lieu and severance pay guidelines must be followed. Notice of termination, or payment in lieu thereof, ranges from 1 week to 8 weeks depending on the affected Employee’s length of service (maximum entitlement is reached after 8 years). Severance pay is payable to employees with over 5 years of service, provided the Employer’s Canadian payroll is $2.5 million or over. Where severance is payable, the employer must pay 1 week of wages for each year of service, to a maximum of 26 weeks
We hope this COVID-19 FAQ helped you. If you have concerns about employee layoffs and terminations, please contact CEO Law for a free consultation – let our experienced lawyers handle these issues for a fraction of the cost of a retainer with a traditional law firm.