March 27, 2020

It is very challenging to keep up with the ever changing updates and announcements that directly impact your business but we are doing our best to keep you informed.  Please keep in mind that the information below is for awareness only and are always subject to change until they have been formalized by the federal government or regulatory bodies making these directives.

Today, two very important announcements were made:

  1. The 10% wage subsidy for small business that was recently announced has been increased from 10% to 75% and will be retroactive to March 15th.
  2. The 8 week maximum temporary layoff period that has been in place per Manitoba Employment Standards is changing.  Temporary layoffs that are occurring due to the Covid-19 impact will be exempt from the 8 week layoff cap.

We do not have all of the answers yet as to how this will work or the time frames for implementation as they are in the “proposed” stage with more information that is supposed to come this weekend.  Please find below the links for your reference to learn more about these two key items.

Wage Subsidy Increase: https://www.cbc.ca/news/politics/trudeau-covid19-mar27-business-1.5512151

Layoff Extension: https://news.gov.mb.ca/news/index.html?item=47284

Other Important Areas To Consider

As a small business, you are likely looking at immediate ways to reduce your costs – specifically wage costs.  You are likely considering one or a combination of the following:

  • Layoffs
  • Reduced Hours
  • Reducing Wages
  • Terminations

It is critical to understand that all of the above actions present a level of risk.  You may feel that you have “no option” right now but to lay off staff immediately because you have either been required to close your business or you simply do not have ongoing business to support the need for your staff.  You can however help mitigate your risk of constructive dismissal legal action from laid off or terminated employees in the future by undertaking some basic steps.

  • Layoffs
    • Have a layoff agreement with your staff, in writing, with the terms and conditions of the layoff defined (ie. temporary layoff, will benefits continue etc)
    • Understand the difference between a permanent and temporary layoff and consider options such as continuing to pay employee benefits throughout the layoff.
    • If employees do not agree to be laid off, you have some decisions to make and have to weigh out your risk.
    • If employees ASK YOU to lay them off but you have work for them, make sure this voluntary layoff is well documented indicating that you are not requiring the layoff but rather, the employee requested it.
  • Reducing Hours and/or Reducing Wages
    • Altering the “fundamental terms of an employee’s employment” can result in a constructive dismissal claim. Altering hours and/or altering wages without agreement by the employee could result in constructive dismissal claims that you will want to protect against if this is what you are intending to do.  Employers, once they have entered into an agreement with an employee, cannot simply unilaterally change the fundamental employment terms without consent.
    • If you want to keep your employees employed but CANNOT support their current wages or the hours, you may wish to enter into a workshare agreement.  Please click the link below for information on this program that can be an excellent option right now.

https://www.canada.ca/content/dam/canada/employment-social-development/migration/documents/assets/portfolio/docs/en/work_sharing/Work_sharing_applicant_guide.pdf

  • Terminations
    • Do not use Covid-19 as a reason to terminate your employees.  Beware of issues relating to wrongful dismissals and consider other options first.
    • If you are intending to terminate an employee for any reason, notice provisions still apply (MB Employment Standards at minimum) and all factors must still be weighed out before making this decision.

These areas all require detailed discussion as they relate to each specific employment situation. The information provided is for general knowledge only and should not be used to make important decisions without a thorough case by case assessment.  Do not hesitate to contact us to discuss your questions or concerns.

Employer Notes:

Additional items to raise for your immediate awareness are also:

 Working Alone Legislation

  •  Be aware of federal and provincial legislation that requires employers to have certain safety protocols in place for workers working alone.  This has always existed BUT now with more people working remotely, employers should be aware of their obligation to protect workers who are working at home (which is considered working alone).
  • Please check out these links and ensure YOUR ORGANIZATION IS COMPLIANT – serious fines may be imposed.

Workers Compensation Coverage Costs

  • WCB premiums may be reduced if your workforce has been reduced or eliminated. WCB annual estimates for many are now likely over-stated.
  • In cases where businesses have reduced their work force or shut their doors, they should contact WCB to update their estimated annual payroll.  This will result in reduced premiums.
  • WCB has also deferred the March 31 instalment to May 31.

The information contained on this site is provided for informational purposes only. F. H. Black & Company is not responsible for any information contained in this email that may become changed or incorrect. With details and program information changing daily, it is important not to act until more information and clarity is provided.

Sincerely,

FHB Partners