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Job Loss and COVID-19: Q&A for Ontario Workers

Louis Century

May 25, 2020

Louis Century has prepared this Q&A on job loss and COVID-19 for non-unionized Ontario workers who have lost, or might lose, their jobs as a result of the pandemic

As we write this, millions of Canadians are losing their jobs as a result of events surrounding COVID-19. Losing one’s job is a devastating personal event in the best of times. In the middle a global pandemic, it is a catastrophe. On top of worrying about staying safe from COVID-19, countless workers are now coping with the added stress of income insecurity. Even workers who have not lost their jobs have seen their wages cut or their hours reduced, adding to their sense of income insecurity.

The legal protections available to workers in these circumstances are complex, and have only become more so with numerous legislative changes in recent days and weeks. It is dizzying enough for lawyers to keep up, let alone non-lawyers facing the combined anxieties of job loss and a global pandemic.

We have prepared this Q&A document for workers, whether they are recognized as employees, or considered to be contractors in today’s gig economy. Our goal is to provide simplified, accessible, legal information to those who are dealing with job loss, loss of income, or who are unable to work as a result of COVID-19. We address a variety of situations that workers are facing, and highlight the benefits and protections that may be available to you. We will continue to update this document as the legal landscape evolves.

Please note that this document contains summary and general legal information, not advice. If you are an employee and you have questions about your employment rights or want legal advice, you should consult a lawyer.

Please also note that this document is primarily directed to non-unionized workers who do not have the protection of a union. If you are unionized, we encourage you to contact your union for representation and support!

Contents

    1.  Some key terms: EI, CERB, CEWS, ESA, CLC, HRC, OHSA, WSIB
    2. I’ve been laid off
      a) What benefits are available?
      b) Am I entitled to notice or severance from my employer?
      c) Was my termination unlawful?
      d) What if I’m not an “employee”? Do these protections apply to me?
      e) Can my employer access the Canada Emergency Wage Subsidy and rehire me?
    3. I’ve been laid off temporarily
      a) What benefits can I access?
      b) What if my contract doesn’t allow temporary layoffs, is this a wrongful dismissal?
    4. I’ve lost wages
      a) My employer cut my wages or reduced my hours, what can I do?
      b) Can my employer access the Canada Emergency Wage Subsidy?
      c) Can my employer access the EI Work-Sharing program?
      d) Can I access the Canadian Emergency Response Benefit?
    5. I have a job but can’t work
      a) If I stay home for reasons related to COVID-19, can my employer fire me?
      b) If I stay home for reasons related to COVID-19, can I access benefits?
      c) Can I stay home because I am worried about my health and safety on the job?
    6. More questions?

1. Some key terms: EI, CERB, CEWS, ESA, CLC, HRC, OHSA, WSIB

We begin by briefly defining some key acronyms. Further down, we will refer to each of these programs as they may apply to different situations faced by workers:

  • “EI” – Employment Insurance benefits are federal benefits available to certain workers who have worked a minimum number of insurable hours prior to job loss. EI includes (i) regular benefits after job loss, (ii) sickness benefits if you are unable to work due to illness, injury or quarantine, (iii) caregiving benefits if you are providing care to someone, and others. The benefit rate is typically 55% of your average weekly insurable earnings, up to a maximum of $573 per week for a maximum of 45 weeks.
  • “CERB” – The Canada Emergency Response Benefit is a new federal benefit covering those who are unable to work due to COVID-19, either because they lost their jobs, are sick, quarantined, or taking care of someone, as well as working parents who must stay home without pay to care for children. The CERB is broader than EI and covers contract and self-employed workers who may not qualify for EI. The benefit rate is $2,000 per month for up to four months.
  • “CEWS” – The Canada Emergency Wage Subsidy is a new federal benefit available to employers whose revenues have decreased by at least 30% as a result of COVID-19. The benefit covers up to 75% of employee wages on the first $58,700 employees earn, or up to $847 per week.
  • “ESA” – The Employment Standards Act, 2000 is Ontario legislation that creates minimum standards for worker protection. We will highlight two key aspects of the ESA: (i) It creates certain job protected leaves, including an expanded Infectious Disease Leave in response to COVID-19, which allow workers to take unpaid time off work for certain reasons and not be fired for it; and (ii) It imposes minimum notice and severance obligations on employers when they terminate an employee’s contract. GP’s Dan Sheppard summarized Bill 186, which amended the ESA in response to COVID-19, here.
  • “CLC” – The Canada Labour Code is legislation that applies to workers in federally regulated workplaces, such as banks, airlines, railways and telecommunications. Protections under the CLC are different than those under the ESA. Click here to find out more about the CLC’s job protections. This memo focuses on Ontario’s ESA protections.
  • “OHRC” – The Ontario Human Rights Code is legislation that protects Ontarians from discrimination in the workplace. For instance, if you are fired or mistreated because you have COVID-19 or are perceived to have it (discrimination based on disability) or because you have to care for your children or family members (discrimination based on family status), the OHRC may protect you. More information here.
  • “OHSA” – The Occupational Health and Safety Act is legislation that protects the right of Ontarians to a safe and healthy workplace. Among other things, it imposes duties on employers to ensure health and safety for their workers, and gives workers a limited right to refuse unsafe work. It also protects workers against “reprisal” when they are exercising their rights under the OHSA.
  • “WSIB” – The Workplace Safety and Insurance Board is Ontario’s workplace compensation board. If a worker is in an industry with mandatory coverage or if their employer has paid WSIB premiums, they may apply to the WSIB for compensation for injuries that occur in the workplace. WSIB may be available to certain workers who contract COVID-19 in the workplace. Obtaining WSIB benefits may enable workers to recover a greater percentage of their usual earnings than EI, CERB or CEWS.

2.  I’ve been laid off

a)  What benefits are available?

You may be eligible for EI regular benefits – up to 55% of your insurable weekly earnings to a maximum of $573 per week – if you meet the eligibility criteria:

  • The job loss must not be because of any choice on your part (e.g. resignation) or because of your own misconduct;
  • You must have been employed in insurable employment and worked a minimum number of insurable hours in the last 52 weeks (the minimum varies by region but ranges from 420 to 700 insurable hours);
  • You can access more information and apply online at the Service Canada website.

Many workers will not qualify for EI because they are independent contractors or self-employed workers, or otherwise fail to meet the minimum number of insurable hours. Such workers may qualify for the recently announced recently announced Canada Emergency Response Benefit to receive $2,000 per month for up to four months. The CERB applies to workers who have stopped working for 14 consecutive days for reasons related to COVID-19. This could include:

  • You were terminated or temporarily laid off for reasons related to COVID-19;
  • You stopped working because you are sick, quarantined, or taking care of someone who is sick with COVID-19, or you are a working parent and must stay home without pay to care for your children who are sick or at home due to school or daycare closures;
  • You still have employment but are not being paid because there is not sufficient work and your employer asked you to stay home.

In order to qualify, you must have received no more than $1,000 in income (including EI benefits) for 14 consecutive days within the four-week period of your claim, and you must prove that you earned at least $5,000 over the past year. The CERB applies to contract and self-employed workers, regardless of whether they would be eligible for EI.

UPDATE: For a more detailed guide on CERB and EI, see this blog post by Daniel Sheppard and Natasha Abraham.

UPDATE: For information on various income supports you may qualify for, see this blog post by Mariam Moktar.

UPDATE: If you are a student and are unable to find full-time summer employment as a result of COVID-19, you may be eligible for the Canada Emergency Student Benefit, which provides monthly payments of $1,250 to $2,000 if certain conditions are met. For more information, see this blog post by Anna Goldfinch.

b)  Am I entitled to notice or severance from my employer?

The ESA establishes minimum protections following termination of employment, including with respect to termination pay and severance pay. If your contract of employment does not specify that you are only entitled to ESA minimums, then you may be entitled to more generous notice pay under the common law. However, in the circumstances of a global pandemic, there is a potential wrinkle since some employers may seek to argue that their contracts were “frustrated” and no notice is owing. Here are some basics on ESA notice and severance, common law reasonable notice, and the doctrine of frustration:

  • ESA notice and severance: When an employee is terminated, the ESA guarantees minimum standards for termination and severance pay, unless you were fired for wilful misconduct: (i) termination pay is generally one week per year of service up to a maximum of 8 weeks, or higher in the case of mass terminations; and (ii) severance pay is generally one week per year of service up to a maximum of 26 weeks (but severance pay only applies if you have been working for 5 years and other conditions are met);
  • Common law reasonable notice: Unless your contract specifies that you are only entitled to the ESA minimum standards for notice and severance, then you may be entitled to reasonable notice under the “common law”, which is typically more generous. Common law notice depends on a number of factors, including your age, how long you have been employed, the nature of your job, and the availability of similar employment elsewhere. Common law notice may be as high as one month per year of service, or even higher in some cases;
  • Frustration concerns: Some commentators have suggested that employers may not have to pay common law notice or ESA termination pay to employees terminated as a result of COVID-19 because of the legal doctrine of “frustration”. If your employer is relying on frustration to avoid paying notice or termination pay, it may not have the right to do so, and even if it does, it has the onus to prove that COVID-19 made fulfilling its contractual obligations impossible. Showing temporary hardship is not enough; employers must generally prove that their business was permanently disrupted. If your employment has been terminated and your employer refuses to pay notice or termination pay, we recommend you speak with an employment lawyer about how to respond.

Note: the above answers only apply to workers who are subject to the ESA. Some workers are excluded from the ESA, and federally regulated workers have different protections under the CLC.

c)  Was my termination unlawful?

For workers in Ontario who are not unionized (and are not federally regulated workers covered by the CLC), there is no requirement of just cause for dismissal. This means employers can generally terminate employment contracts for any reason, or for no reason at all, so long as they provide the required amount of notice under either the ESA or the common law (see Question 2b). In most cases, challenging wrongful dismissals is a matter of determining the required amount of notice (note that the situation may be different if you have a contract for a fixed term without a termination provision). However, there are a few exceptions where a termination may be found to be unlawful and workers may even be reinstated to their jobs:

  • Breach of statutory leaves: If an employee is on a statutory leave of absence from work under the ESA (e.g. sick leave, caregiver leave, or emergency leave) they cannot be terminated for reasons relating to the leave. For instance, if you are on a protected sick leave and your employer fires you because you went on that leave, that is a violation of the ESA and there may be remedies under the ESA, including compensation or reinstatement in your job. This does not mean that you cannot be fired during a statutory leave, but the reason for the dismissal cannot be related to the leave.
  • Breach of human rights: If an employer terminates an employee for discriminatory reasons, this may be a violation of the Ontario Human Rights Code and a tribunal may order reinstatement. There are two grounds of discrimination that may apply in these circumstances. First, the OHRC prohibits discrimination on the ground of disability. COVID-19 is arguably a disability (the Ontario Human Rights Commission released a statement that it is, although this is not binding on the Tribunal). If you are terminated because you have COVID-19 or are perceived to have it, your termination may be discriminatory in breach of the OHRC. Second, the OHRC prohibits discrimination on the ground of family status. If you miss work because you have to care for your children, or a sick family member, as a result of COVID-19, and you are fired as a result, this may be a breach of the OHRC.
  • Breach of health and safety rules: Workers who advance their rights under the Occupational Health and Safety Act are protected from reprisal. This means you cannot be fired, disciplined or intimidated for reasonably exercising a health and safety right. If you are fired for raising concerns about unsafe work, or for reasonably refusing unsafe work, you may have rights under the OHSA to challenge your dismissal. If you are considering refusing work based on concerns about COVID-19, we recommend you speak with an employment lawyer in advance if possible. There are limits on the right to refuse unsafe work and certain types of workers, such as emergency responders and certain health care workers, are not covered.

d)  What if I’m not an “employee,” do these protections apply to me?

While some protections for terminated workers are limited to employees, and exclude contractors, there are also benefits available to contractors, including the CERB benefits and, in some cases, notice pay:

  • Benefits: The CERB applies generally to all workers including self-employed and contractors, so long as you meet the rest of the eligibility criteria (see Question 2a). Generally, only employees are eligible for EI (although self-employed workers may be eligible for EI special benefits if they registered and worked insurable hours).
  • Termination: Protections in the ESA apply to employees, not independent contractors. However the mere fact that you are described in your contract as an independent contractor does not make it so. The question depends on the reality of your work, for instance, does the employer control the conditions of your work and are you economically dependent on the employer. In addition, there is a hybrid category of “dependent contractors” who are genuinely self-employed, but highly dependent on the employer for work. In that situation, you may be entitled to protections including notice and severance. If you are a contractor or gig worker and want to know whether you are entitled to ESA protections, we recommend you speak with an employment lawyer.

e)  Can my employer access the Canada Emergency Wage Subsidy and rehire me?

If you were laid off after March 15 for reasons related to COVID-19, it appears that your employer may be able to access the Canada Emergency Wage Subsidy to rehire you, with up to 75% of your wages covered. The CEWS, details of which were announced on March 30, replaced the much narrower Temporary Wage Subsidy for Employers which only offered up to 10% of employee wages and was restricted to small or medium sized businesses. On March 30, the government released the following information about the CEWS:

  • CEWS is available to any employer whose business revenues decreased by at least 30% as a result of COVID-19;
  • Non-profit organizations, registered charities and companies big and small may all apply. The number of employees will not determine eligibility. However, on April 1, Prime Minister Trudeau said it does not apply to publicly-funded businesses;
  • The CEWS provides up to 75% of employee wages on the first $58,700 you earn. That means up to $847 per week;
  • Employers will have an obligation to attest that they are doing everything they can to pay the remaining 25% of your wages;
  • Importantly, the CEWS was backdated to March 15. This means employers can hire back workers who were laid off due to COVID-19 and have 75% of their wages covered. Addressing employers, Prime Minister Trudeau said: “You should make every effort to top up their wages and every effort to hire back those workers who have been laid off due to COVID-19.”

3.  I’ve been laid off temporarily

a)  What benefits can I access?

The rules for “temporary layoffs” are set out in the ESA. Generally, a temporary layoff is defined as a layoff of not more than 13 weeks in a 20-week period, or a layoff of more than 13 weeks in a 20-week period if certain conditions are met (such as continuing to receive benefits or substantial payments during the layoff). When the time period for a temporary layoff expires, it is considered to be a termination and the employer must meet its obligations upon termination, including notice and severance.

Qualifying employees are entitled to EI during a temporary layoff. As discussed in Question 2a, employees who do not qualify for EI may access the CERB. If based on your salary EI offers you less than $500 per week, then you may wish to apply for the CERB instead as it provides a greater benefit.

b)  What if my contract doesn’t allow temporary layoffs, is this a wrongful dismissal?

In normal times, the answer to this question would probably be yes. Generally, an employer can only rely on the temporary layoff provisions in the ESA if the contract of employment expressly permits temporary layoffs, or the employee and employer agree in writing to a temporary layoff, or the employer has had a custom or practice of invoking temporary layoffs at certain times. Where the contract doesn’t provide for temporary layoffs, the law generally held that a temporary layoff is a serious or significant breach of a fundamental term of the employee’s contract. This is called a constructive dismissal. An employee who is constructively dismissed has the option to walk away and sue for wrongful dismissal damages.

However, these are not normal times. There are many considerations to take into account before an employee decides to claim that they have been constructively dismissed:

  • Leaving your employment and making a claim for constructive dismissal can be a risky decision to take, because if the claim is denied by the courts, then it is treated as a resignation and no termination entitlements are owing at common law or under the applicable statute;
  • You may also lose the right to EI or CERB benefits if you resign and cannot establish that a constructive dismissal occurred;
  • Some commentators have argued that because of the global pandemic, courts may find that employers have an “implied” right to use temporary layoffs even if the contract does not allow it;
  • Claiming constructive dismissal would mean giving up the right to return to work if business picks up. If the business has not dissolved and there is a realistic chance of returning to work, the employee may simply decide to do nothing until the end of the period of the temporary layoff.

A decision of this nature is obviously a very important decision with very important consequences and should not be made without seeking legal advice, and very carefully laying out your situation to the lawyer.

4.  I’ve lost wages

a)  My employer cut my wages or reduced my hours, what can I do?

Any fundamental change to your contract of employment by your employer, such as cutting your wages, may amount to a “constructive dismissal”. Depending on the nature of the changes, the employee may have the option of treating the contract as having been terminated by the employer and suing for wrongful dismissal. However, there are many considerations to take into account before making that decision (these are discussed in Question 3b).

In addition, not all changes to an employee’s terms and conditions of employment are considered sufficiently fundamental to amount to a constructive dismissal. For instance, although courts have not been consistent in their rulings on this, some courts have held that a wage cut of less than 20% may not be a constructive dismissal. The circumstances of COVID-19 may further complicate the issue.

Depending on what termination entitlements are owing and what other employment alternatives are available to the employee, it may be preferable for an employee to simply give the employer notice that they are not accepting the change in the terms of their employment but that they will continue to work for the employer under those changed terms – and bide their time until their personal situation changes. This avoids many of the risks of claiming constructive dismissal.

As mentioned in Question 3b, it is very important to meet with a lawyer before claiming that you have been constructively dismissed.

Note: If your employer suffered revenue losses, it may qualify for the Canada Emergency Wage Subsidy and you should encourage them to apply for it (see Questions 1e and 4b).

b)  Can my employer access the Canada Emergency Wage Subsidy?

Whereas the previous Temporary Wage Support was restricted to small and medium-sized businesses, the CEWS is open to non-profits, charities and businesses of any size who have lost at least 30% of their revenues due to COVID-19. Details of the CEWS are discussed in Question 1e above.

c)  Can my employer access the EI Work-Sharing program?

Where there is a temporary decrease in business activity, an employer may be able to apply to the EI Work-Sharing program. The program provides federal income support to employees eligible for EI who work a temporarily reduced work week while the business recovers. Affected employees must all agree to an equal reduction of wages and to share available work over a specified period of time. There are a number of rules and restrictions on the program, including that each participating employee must be eligible for EI. In response to COVID-19, the federal government extended the maximum possible duration of an agreement from 38 week to 76 weeks.

The newly announced Canada Emergency Wage Subsidy (see Questions 1e and 4b) is likely a preferable option to Work-Sharing for both employees and employers. It is important to note that while the government subsidizes 75% of employee wages under that program, the employer may still top up the remaining 25%.

d) Can I access the Canadian Emergency Response Benefit?

If your wages were reduced to less than $1,000 during a 14-day period, for reasons related to COVID-19, you may be eligible to apply for CERB. You should consult this blog post by Daniel Sheppard and Natasha Abraham for more detailed information on CERB, including how to apply

5. I have a job but can’t work

a) If I stay home for reasons related to COVID-19, can my employer fire me?

The short answer is yes and no. If an employee is home from work on a statutory job-protected leave, this means they cannot be fired or otherwise penalized because of the leave. However, an employer may be able to lay off an employee during a leave for good faith reasons unrelated to the leave, e.g. the company goes out of business for economic reasons. During a leave, employees continue to participate in any benefits plans. In Ontario, Bill 186 amended the ESA to expand an unpaid Infectious Disease Leave for most workers who are unable to work for reasons related to COVID-19. This leave covers the following situations:

  • Employee is under medical investigation, supervision or treatment for COVID-19;
  • Employee is following an order under the Health Protection and Promotion Act;
  • Employee is in isolation or quarantine based on a direction or recommendation from public health officials, medical practitioners, government or others;
  • Employee is directed by their employer not to perform job duties due to a concern they may expose others to COVID-19;
  • Employee needs to provide care to a person for a reason related to COVID-19 such as school or daycare closure (the “person” the employee is caring for is broadly defined as anyone the employee considers “like a family member”);
  • Employee is affected by travel restrictions and cannot reasonably be expected to travel back to Ontario.

An employee who is off work for any of these reasons cannot be fired or penalized for those reasons. Importantly, the Infectious Disease Leave for COVID-19 was backdated to January 25, meaning if you stopped working sometime after that date for any of the above reasons, you are deemed to have taken an Infectious Disease Leave and may have remedies if you were terminated or penalized. Employers are prohibited from requiring a medical note for an employee taking an Infectious Disease Leave. Note however that the Infectious Disease Leave is only available to workers covered by the ESA, which excludes independent contractors and volunteers and certain kinds of workers such as police officers.

In addition to the Infectious Disease Leave, the ESA provides for other leaves including:

  • sick leave,
  • family responsibility leave,
  • family medical leave,
  • family caregiver leave, and
  • critical illness leave.

More information about these leaves can be found at the Ministry of Labour’s website.

UPDATE: For more detailed information on job-protected leaves under the ESA, see this blog post by Kelly Doctor and Natai Shelsen.

If you are terminated or penalized for reasons related to disability (e.g. you have COVID-19) or your family status (e.g. you have to take care of your children or family members), you may also have protections under the Human Rights Code. An employer has a duty to accommodate an employee’s disability or family status up to the point of undue hardship. Such accommodation could include, for instance, facilitating work-from-home if it is feasible.

UPDATE: For more information on your rights as a caregiver, see this blog post by Kelly Doctor (about rights of caregivers) and this blog post by Kirsten Mercer (about human rights generally during the pandemic).

The federal government also created a COVID-19 leave entitlement for workers in federally regulated workplaces

b)  If I stay home for reasons related to COVID-19, can I access benefits?

As noted, the Infectious Disease Leave is unpaid, as are other ESA job-protected leaves. However, you may be able to access benefits from other sources, including:

  • EI if you meet the eligibility criteria (discussed in Question 2A)
  • CERB if you meet the eligibility criteria (discussed in Question 2A)

If you are personally ill or disabled as a result of COVID-19, you may also consider inquiring into WSIB benefits or disability insurance that you may have access to.

c) Can I stay home because I am worried about my health and safety on the job?

Ontario’s Occupational Health and Safety Act gives workers a limited right to refuse work that is likely to endanger themselves (or in some cases others).

For information on the work refusal process and whether you may have a right to refuse unsafe work, see this blog post by Kirsten Mercer. We strongly encourage any employer who is considering a work refusal to contact a lawyer in advance of doing so. As Kirsten explains:

Most of the time, employees who refuse to follow their employer’s directives risk being disciplined or terminated.  The right to refuse unsafe work is an exception to this rule.  But there are procedures that govern when and how workers can refuse unsafe work, so it is important to know what to do. Unless the proper procedures are followed, a worker who refuses their employer’s direction to attend or perform work risks being disciplined or even fired.

6.  More questions?

Here are some resources available to workers:

Lawyers

Louis Century

Practice Areas

Employment Law, Human Rights Law