Last Impressions Matter Too!
As a business leader, are you having a hard time making decisions or keeping up with the ever-changing government updates? Sometimes those compliance regulations can be confusing and written in another language.
We are here to help you understand some of the various options you have available as you make tough decisions.
Should I keep people on payroll?
Should I continue to keep people on payroll or reduce their work-week or pay?
Should I layoff temporarily or permanently?
This summary will help you navigate through some of the risks and help you make the right decisions. If you treat your employees well and with respect during this, they will come back more engaged and ready to rebuild with you.
That’s why Last Impressions Matter Too!
Layoffs, Terminations and Pausing Pay
If your workplace requires in-person attendance (restaurant, hair salon, clinics and most non-essential business) it is now closed and you are trying to understand what your obligations are relating to salary continuance, layoffs or terminations.
Temporary Layoffs
Most of the businesses who had to close issued temporary layoffs and the government advised them to use the Code “other”. Hopefully your employment contract allowed for temporary layoffs. This exception applies if your employee is under a contract that allows for the employer to temporarily lay off an employee. Employees on temporary layoff are not entitled to pay or any termination entitlements. In most cases, an employee on a temporary layoff can claim EI.
In Ontario, temporary layoffs are “temporary” and can only last for a specified amount of time - 13 weeks in a 20 week period or less than 35 weeks in a 52 week period, if certain other conditions are met. If the lay off goes longer than the law specifies, the employee will be entitled to termination entitlements.
If the employee doesn’t have a contract that allows for temporary lay off, it’s a risk if you do this and you should seek advice. The employee will likely want to come back to work after the lay off period so you’ll have to have an open discussion as the alternative is a termination which the employee may not want.
Terminations
While you may not want to lose your employees, termination may be the only viable option. Employees have certain entitlements on termination, which vary depending on what is in their employment contracts, their length of service and the size of the employer. You may need to provide notice pay and/or additional severance pay under the Ontario Employment Standards Act, 2000.
[Please book a free consultation with us if you need help with any of this]
Stopping Pay
Some businesses immediately stopped employees’ pay and issued records of employment (ROEs). If you stopped your employees’ pay you remain at risk of some claims for constructive dismissal and your employees may claim their right to termination entitlements.
A constructive dismissal generally means that there is a fundamental change to the terms of the employment contract, and the employee is going to argue that their employment was actually terminated. Many law firms are saying due to this unprecedented time there will likely be mixed success.
What is the difference between a layoff and termination?
A layoff is temporary and the assumption is that the employee will be recalled to work. A layoff does not end the employment relationship. An employee does not receive anything from the employer in the event of a layoff, which is unlike a termination.
An employer only has the right to lay off an employee if this is set out in the contract or the collective agreement.
A termination is permanent and entitles an employee to various termination entitlements, such as notice, continuation of benefits and potentially severance pay.
Employees may be eligible for employment insurance (EI) in both circumstances.
Job Protection
The Ontario government passed legislation to provide employees with job protection with respect to several COVID-19 related absences. It’s important that you understand all of the various requirements before finalizing decisions.
In certain situations, employers who terminate employees may be out of compliance. Job protection will be available for the following reasons:
● The employee is under medical investigation, supervision or treatment for COVID-19.
● The employee is acting in accordance with an order under the Health Protection and Promotion Act.
● The employee is in isolation or quarantine.
● The employee is acting in accordance with public health information or direction.
● The employer directs the employee not to work.
● The employee needs to provide care to a person for a reason related to COVID-19 such as a school or day-care closure.
One of the toughest things a leader needs to do is have these discussions with employees, and right now it’s even harder as you can’t do this in person.
We can help you answer your various questions, and help you prepare for this. How you treat employees will have a lasting impression.