The Coronavirus: Its Impact
Update from Lancaster Brooks & Welch Partners
By Alexandra Del Vecchio and Leanne Standryk
Previously, we provided a summary of the Applicant Guide for the Work-Sharing Program for Downturn in Business Due to COVID-19. As part of the Federal Government’s work-sharing temporary special measures to support employers and workers impacted by COVID-19, there have since been revisions to the COVID-19 work-sharing agreement application process. As a result, we take this opportunity to provide an updated summary of the COVID-19 Work Sharing-Temporary Measures and application process.
- Work-Sharing (WS) is an Employment Insurance (EI) program intended to help employers avoid layoffs due to experiencing a temporary downturn in business
- Eligible employees who voluntarily agree to reduce their normal working hours and share available work, while their employer has an opportunity to recover, may be eligible for EI benefits
- The goal is to return all employees to normal hours by the end of an agreement contemplated by the WS provisions
Temporary Special Measures
- Effective March 15, 2020 to March 14, 2021, the Federal Government introduced the following temporary special measures for employers experiencing a downturn in business due to COVID-19:
- extend the maximum duration of WS agreements from the current 38 weeks to 76 weeks
- waive the mandatory waiting period between agreements
- reduced the application timeline, requesting that that employers submit their application 10, rather than 30, calendar days prior to their agreement’s requested start date
- reduce the previous requirement to submit a recovery plan attachment, replacing it with a single question regarding recovery plans in the application form
- To be eligible for a work-sharing agreement a business must:
- be experiencing a downturn in business activity related to COVID-19
- demonstrate the shortage of work is temporary, beyond their control and not cyclical/recurring in nature, i.e. the shortage cannot be as a result of a labour dispute, seasonal shortage, or pre-existing/recurring production slow down
- have been a year-round business in Canada for at least one year
- be a private business, publicly held company or not for profit
- have at least 2 employees in the WS unit
- To be eligible for WS employees must:
- be a year-round, permanent, full time or part time employee, needed to carry out the day-to-day functions of the business (i.e., core staff)
- be eligible to receive EI benefits according to the general rules of eligibility
- voluntarily agree to reduce their normal working hours by the same percentage and share available work
- Employees are not eligible if they are:
- seasonal, casual, on-call or temporary help
- needed to help generate work or are essential to the recovery of the business (senior management, executive level marketing/sales agents, outside sales representatives, technical employees engaged in product development, etc.)
- hold more than 40% of the voting shares in the business
- A WS agreement is composed of WS Units
- WS Units are groups of at least 2 employees with similar job duties who reduce their hours of work over a specific period of time
- Supervisors and managers not involved in recovery efforts may be included in WS Units
- Each unit must authorize an employee-member to represent them in the WS agreement
- this representative acts as the voice for all employees in the Unit and works with the employer in the WS application process
- they also ensure employees know what to expect when participating in WS and provide them with a copy of the signed agreement and employee guide
- ALL employees in the same job description must participate in WS, i.e., a restaurant could not have 1 out of 4 servers decline and continue to work full hours, while having the remaining 3 servers participate in a WS reduction
- Equal Sharing of work is a requirement – all members of a WS Unit must agree to reduce their hours of work by the same percentage and to share the available work
- WS Units must reduce their hours by a minimum of 10% (one half day) and to a maximum of 60% (3 days) and the reduction of hours can vary from week to week as long as the average reduction over the life of the agreement is in the 10%-60% range
- The proposed reduction should match the number of anticipated temporary layoffs if the agreement were not approved i.e. if seeking a 30% reduction, there should be a need to layoff approximately 30% of the impacted workforce
- A WS agreement must be at least 6 consecutive weeks and up to 26 weeks, and as part of the COVID-19 temporary measures may be extended (by request for extension) up to 76 weeks
- A completed application with both components should be submitted at least 10 days before the agreement’s requested start date
- Applications are to be sent by email to the email address designated for their business location
- When applying for a new agreement the parties must submit 2 items:
- Application for a Work-Sharing Agreement form (EMP5100), and
- Attachment A: Work-Sharing Unit form (EMP5101)
- This lists all employees participating in the WS agreement (all WS Unit members)
A completed application with both documents must be submitted at least 10 days before the requested start date. Applications are reviewed to ensure that all required information is provided, correct and meets program requirements. Service Canada will inform the parties of the status of their application and confirm rejection or approval in writing. All decisions are final and there is no appeal process. Once an application is approved, Employers should adhere to the ESDC Employer Responsibilities Guide for information on managing the agreement.
Generally, employers cannot increase the size of their workforce during a WS agreement, though they may replace core-employees who choose to leave.
Skill enhancement can occur during a WS agreement, but salary costs of employees participating in training during normally scheduled workdays are not compensated through a WS agreement; employees can take part in training during non-workdays/hours.
In the event of a partial or full return to normal business levels, if recovery could be impeded by continued participation in training, employees may be asked to return to work.
Typically, all WS agreements are monitored at least once by Service Canada in order to verify and determine the extent to which the WS program objectives are being achieved and the agreement is implemented as agreed to. Service Canada will contact the employer and employee representative directly and employers may be asked for payroll records.
During the WS agreement, the employer must submit a weekly Utilization Report, reporting the total hours worked, hours missed due to participation in WS and hours missed for any other reason, for each member of the WS Unit.
If you are impacted by this pandemic, the Labour & Employment team at Lancaster Brooks & Welch LLP, are available to provide legal advice. They may be contacted at 905-641-1551
This document is provided as a general summary and guide to the Work Sharing Program and we encourage individuals to reach out to their legal counsel for advice in response to their circumstances.