COVID-19 and the workplace: reducing payroll, responding to a positive diagnosis, and more

On March 13, we wrote about some of the key issues facing employers in light of COVID-19. Since then, the situation has escalated and continues to evolve in real time, with a myriad of new issues for employers to consider.

This is an update with more information on employer obligations, including emerging issues of critical importance to employers. You can find our dedicated bulletin on Québec-focused employer considerations here.

What you need to know

• Workforce reductions. Many employers are considering such measures as temporary layoffs, reductions in working hours and work-sharing to address the financial impact of COVID-19 on their businesses. In some circumstances, these decisions could trigger constructive dismissal risks.
• Temperature checks prior to reporting to work. It is unclear how regulators across Canada (including human rights tribunals) will view an employer practice of taking employees’ temperatures prior to work, particularly in light of competing legal rights under privacy, human rights and occupational health and safety laws. Depending on the nature of the employer’s business, this practice may be acceptable in Canada under the circumstances, provided it is done in a minimally invasive manner that respects employee dignity and privacy.
• Responding to a positive diagnosis, etc. Employer obligations to its employees will depend on whether an employee has reported a positive diagnosis, had contact with an individual who received a positive diagnosis, exhibits flu-like symptoms or has been in contact with an individual with flu-like symptoms. Generally, however, employers should take a cautious approach when considering how to respond to such information.
• Work-from-home occupational health and safety obligations. With employees increasingly working from home, employers must ensure they continue to comply with their obligations under occupational health and safety legislation, including the obligation to report workplace injuries.

What options are available to employers to reduce their payroll obligations?

Employers in non-unionized workplaces have a number of different options to reduce their overall payroll liability, with a view to costs savings during the COVID-19 pandemic. These include such potential measures as: (i) terminations of employment; (ii) temporary layoffs; and/or (iii) reducing employee hours (including through a work-sharing arrangement). We discuss each of these options below.

Terminations

Common law employers generally have the right to dismiss their non-union employees without cause at any time, subject to the provision of notice of termination (or pay in lieu) and severance pay (if applicable). These obligations—which can be significant—must be assessed under statute, contract and common law, as applicable. Employers should also ensure that the terminations cannot be perceived to be based on any prohibited ground of discrimination (including disability and family status) or related to an employee’s request to take a leave of absence in connection with COVID-19—particularly in light of legislation being passed across the country that seeks to protect the jobs of employees taking such leaves.

Employers who are considering the dismissal of a significant number of employees should also ensure they are complying with the mass-termination rules in the relevant provincial employment statutes.

Temporary layoffs

While most provincial employment statutes provide employers with a right to temporarily lay off all or part of a workforce for a period of time without triggering a termination, there is case law that suggests that a temporary layoff of non-union employees without pay may amount to constructive dismissal in the absence of (i) a contractual right to do so, or (ii) an employee’s consent to the layoff. In British Columbia, a temporary layoff is only permissible under the statute in those circumstances; otherwise, it may be regarded as a dismissal. In the current environment, employers should weigh the risks and/or benefits of a layoff in deciding whether to implement one.

The provincial employment statutes differ slightly with respect to the mechanics of a temporary layoff. We discuss some of the key differences below. However, employers considering implementing a temporary layoff should seek legal advice with respect to the particulars of their situation.

Length of a layoff

The permitted length of a temporary layoff under employment standards legislation varies by province. For example:

• In Ontario, a temporary layoff cannot exceed (a) 13 weeks in any period of 20 consecutive weeks, or (b) more than 13 weeks in any period of 20 consecutive weeks but less than 35 weeks in any period of 52 weeks where the employer provides certain defined assistance, the most common of which is continuation of payments for benefits or a legitimate retirement or pension plan.
• In Alberta, a temporary layoff must be in writing and cannot exceed 60 days in a 120-day period. This period can be extended if the employer makes regular payment to or on behalf of the employee, such as continuing to pay wages, employee pensions or benefits and the employee agrees to these payments in lieu of a firm limit of the length of the layoff.
• In British Columbia, a temporary layoff cannot exceed 13 weeks in a consecutive 20-week period.

Generally, layoffs that extend beyond the statutory layoff period are deemed to be terminations, triggering notice of termination and severance pay (if applicable), and potentially the mass-termination rules under applicable employment statutes (depending on the number of employees deemed to be terminated).

Notice of a layoff

In some provinces, including Ontario and British Columbia, there is no statutory requirement to provide advance notice of a layoff. In other jurisdictions, there are statutory notice requirements. For example, in Alberta, a notice of layoff must be given to an employee in writing one to two weeks in advance of the layoff, depending on the employee’s length of service. The notice must also set out the date the layoff will commence and include certain specified language; however, this requirement may be waived in unforeseeable circumstances.

Compensation and benefits during a layoff

Subject to an employment agreement or policy that states otherwise, employers are not required by legislation to pay an employee—or continue their benefits—during a period of temporary layoff. However, as noted above, in some jurisdictions (including Ontario and Alberta), a layoff may be extended if the employee continues to receive substantial payments from the employer or the employer continues the employee’s benefits, subject to certain other statutory requirements.

Reductions in working hours and work-sharing

As an alternative to terminations or layoffs (or in conjunction with them), some employers are considering requiring employees to work reduced hours to offset the financial impact of COVID-19. A significant unilateral change to an employee’s working hours and therefore their overall compensation may lead to a claim for constructive dismissal. In some cases, a significant reduction in an employee’s compensation may constitute a temporary layoff under provincial employment statutes. For example, under British Columbia legislation, an employee is deemed to be on layoff as soon as they earn less than 50% of their weekly wages.

The Government of Canada has a Work Sharing Program that eligible employers may take advantage of in order to ameliorate the effect of reduced hours on their employees. Detailed information about this program, including how to apply, may be found on the Government of Canada website.

Can employers take their employees’ temperatures prior to permitting them entry into the workplace?

Employers are increasingly considering asking employees to undergo temperature checks prior to being permitted to enter the workplace. Human rights and privacy legislation across Canada places restrictions on an employer’s ability to require medical examinations or health testing. Unless the examination or testing is reasonably required to assess the employee’s ability to work, compulsory testing of employees through temperature checks normally would not be permitted. By contrast, occupational health and safety legislation requires employers to take reasonable care to ensure a safe and healthy work environment.

Arguably, taking temperatures of employees may be reasonable under the circumstances and necessary to meet an employer’s occupational health and safety obligations. On the other hand, many people with COVID-19 do not present with a fever, such that temperature checks may not actually be effective at screening employees with COVID-19. Notably, in the U.S., the Equal Employment Opportunity Commission has expressly permitted U.S. employers subject to the Americans with Disabilities Act to both check employees’ temperature and ask employees about COVID-19 symptoms. In Canada, employers do not have such guidance and must balance competing legal considerations before deciding whether to unilaterally take employee temperatures. Employers who decide to take employee temperatures should, among other things, do so in a minimally invasive manner that respects employee dignity and privacy

Employer obligations regarding employee positive diagnosis, symptoms, or close contact

An employer’s obligations to its employees upon receiving information relating to a diagnosis of or exposure to COVID-19 will depend on the information reported by the employee, as well as the nature of the particular workplace. Generally, we suggest employers take a cautious approach—which respects employee privacy rights—when considering issues such as disclosure to other employees, office closures, directions to work remotely, etc. However, employers should seek legal advice with respect to these issues, as the approach (and an employer’s obligations) may differ depending on the nature of the workplace, information disclosed, etc.

• If an employer learns that an employee has tested positive for COVID-19 or has been in close contact with an individual who has received a positive diagnosis, it should consider taking the following steps:
  • Suggest that the employee seek medical advice (if they have not already).
  • Ensure that the employee not attend the office: (i) in the case of an employee who has received a positive diagnosis, until cleared to do so by a medical professional; and (ii) in the case of an employee who has had close contact with an individual who has received a positive diagnosis, for at least 14 days since the employee’s last contact with the individual.
  • Determine, in consultation with the employee if possible, what other employees may have been in contact with him or her and: (i) notify those employees that a “co-worker” received, or was in close contact with an individual who received, a positive COVID-19 diagnosis; and (ii) require those employees not to report to work for at least 14 days from their last contact with the relevant employee.
  • Consider what other measures may be appropriate in the circumstances, having regard for the employer’s office setting and the information that was disclosed—for example, closing the office in its entirety; asking an entire floor of an office to work remotely; arranging for additional cleaning all high touch services; etc.
• If an employer learns that an employee is experiencing flu-like symptoms or has been in contact with an individual experiencing flu-like symptoms, it should consider suggesting that the employee seek medical advice and if the employee is experiencing flu-like symptoms, ask him or her to leave the office to seek such advice. It may also be appropriate, depending on the circumstances, to:
  • Ask an employee who is experiencing flu-like symptoms not to report to work for 14 days.
  • Notify other employees of the issue and/or take other steps (including those described above).

We note that although the employer does not have an obligation to report to the Public Health Agency of Canada, if an employee reports experiencing symptoms of the virus, it should encourage the employee to do so.

What are an employer’s health and safety obligations to employees working from home?

Employers normally have obligations under provincial occupational health and safety legislation to ensure the workplace meets certain health and safety requirements and to report injuries which occur in the workplace. With an increasing number of employees working remotely in light of COVID-19, employer obligations in this regard have become more difficult to ascertain. However, employers should not lose sight of these obligations and should seek legal advice in respect of them.

We note that some provincial occupational health and safety regulators have developed guidance to assist employers in the circumstances. For example, WorkSafeBC has recommended that employers ensure they have a health and safety policy for working from home which, at a minimum, requires employees to conduct an assessment of their workplace and report any hazards to their manager. Similarly, WorkSafeBC has noted that key health and safety roles, rights and responsibilities are just as applicable for at-home workers, including reporting workplace injuries (although no guidance has been provided to assist employers in assessing whether injuries which occur while an employee is at home technically constitute workplace injuries).

An evolving situation

As the COVID-19 situation continues to evolve, the guidance provided in this bulletin may also be subject to change. We therefore recommend that employers seek legal advice in respect of the issues noted below, and other employment-related decisions being considered in connection with COVID-19.

Read all our coronavirus-related updates on our COVID-19 guidance for organizations resource page.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

© 2024 by Torys LLP.

All rights reserved.