Ontario has now extended the state of emergency through to April 23, 2020. A further extension of the maximum term of 14 days will likely follow. Schools throughout the province remain closed until at least May 4, and non-essential businesses are also shuttered indefinitely. As the shutdowns continue, more and more people are having work-related issues from layoffs to disability claims to leaves of absence to care for children or sick relatives. Below, we provide an update for both employees and employers on how these issues are being addressed.
Wage Subsidies and Business Loans
The federal wage subsidy program is now in operation and will run retroactively from March 15 through to June 6, 2020. The payment will cover up to 75% of an employee’s wages, to a cap of $847 per week. Employers will also receive a refund of CPP and EI premiums for this period. Employers are required to demonstrate minimum thresholds of business loss for the relevant period in order to qualify.
The Canadian Government has also enacted a program known as the “Canada Emergency Business Account”, which provides interest-free loans of up to $40,000 to small businesses, to help cover their operating costs during a period where their revenues have been temporarily reduced. The applicant must show that it paid between $50,000 and $1 million in payroll in 2019 to be eligible.
Wrongful Dismissal Lawsuits and Coronavirus
It remains to be seen what impact that this situation may have upon pending or recently started wrongful dismissal cases. The determination of the relevant fair notice period at common law is more of an art than a science. It obviously is not the moment to be unemployed and seeking new employment in most sectors of the economy. What impact might this have upon a judge’s assessment of the notice period? It may be unfair to cast this burden on the employer, at least for fact situations which pre-dated this crisis.
It remains anyone’s guess as to how an appropriate notice period may be determined, given the current circumstance. At one time in Ontario for cases involving an illness, the court put the notice period “on hold” for the period of the illness or injury. For example, if an employee became ill in month 3 of a 12-month notice claim, then the clock stopped at month 3 and then was alive again when the illness was over. If the plaintiff recovered at month 7, then effectively 4 months was added to the end of the 12 month period. Would the same principle be applied in this context? It’s hard to predict, but this is the beauty of the common law, as it adjusts to each new setting. This will take some time to figure out, which is the downside, as it may well require a Court of Appeal decision to set the law on this.
Ontario law was revised recently to include employee protection for a termination due to a coronavirus infection, quarantine or related issue, such as the need to be off work to attend to family duties. The remedy for wrongful termination owing to COVID-19 issues under the Employment Standards Act will lead to possible reinstatement and back pay. It will not, however, provide for payment of aggravated or moral damages to compensate for injured feelings for such unfair conduct.
For those seeking such a remedy, a civil lawsuit claiming unfair conduct at the time of termination, such as a coronavirus related issue, the claim for fair severance can be made by civil action in which a claim for aggravated damages can be made. Medical evidence, while certainly preferred, need not be required.
Punitive damages, designed to punish the wrongdoer for deliberate and intentional wrongdoing, remain rare, but when awarded can be significant. Aggravated and punitive damages have each separately exceeded $100,000. They are also non-taxable. Each situation is unique so those who feel they may have a claim should consult as soon as possible with an experienced employment lawyer to review their options.
Disability Insurance Claims
Insurance contracts require an insurance company to act in good faith when deciding on a claim. This duty relates not just to the yes or no decision on the claim but applies to all aspects of the claim and how it is handled. The failure to do so may result in additional claims for mental distress. Insurers, who may currently be overwhelmed by the volume of claims, may not necessarily welcome the staggering liabilities. They must be careful and honourable as to how they deal with these cases. An employer acting as a self-provider of insurance benefits as an ASO (Administrative Services Only), in which it takes on the role of the insurer, has the same obligations.
Get Advice and Know Your Rights
This is a moment requiring a steely determination from both employers and employees. This is not the time for rash behaviour, needless to say. Businesses are in survival mode. Employees are experiencing stress related to health matters, family and, in many cases, financial instability. This is the time for clear heads to prevail.
We are here to provide solid legal and practical insight in a time of uncertainty, no matter your perspective. For advice on COVID-19 issues and all employment law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.
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