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I want to pay my employees the 75% provided by the government, but no more. Can I?

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I want to pay my employees the 75% provided by the government, but no more. Can I?

When the coronavirus crisis ends, many “laid off” employees will never be recalled.

Many employers are using the COVID-19 crisis to rid themselves of employees they had considered terminating for years, free of the stresses which accompanies building up cases for misconduct and of the inevitable discomfort and morale problems with which all dismissals are replete.

Employers will also find that they can make do with fewer employees. They will ultimately realize that some functions are redundant or not worth the cost of the salaries. Pregnant employees and those protected by human rights legislation are also being displaced under the guise of economic need.

Although a layoff is generally a wrongful dismissal at law, most employees are accepting them in the hope of being recalled amid the well-grounded fear that our post-COVID-19 future will prove singularly unpromising for job seekers.

Although they understand intellectually that they can treat their layoff as a dismissal and obtain wrongful dismissal damages, most are prepared to cease work with no pay, even though they can’t afford it, in the hope that their employer will eventually recall them.

Many employers intend never to recall some or most of their laid off staff. So why not simply terminate them now?

Their strategy is this: If their employees accept a layoff for, say, 35 weeks (the maximum in Ontario), by the time that transpires, many employees will have found other work and moved on. In that case, the employer avoids paying severance.

For those employees who remain ready to return, the employer can select the ones who can be discharged most inexpensively and pay them severance. The employee will not have had the compensation for their dismissal when they needed it most, when laid off without pay, and the employer will be paying when the payment is less burdensome.

Even large law and labour firms, while writing memos to clients advising that layoffs are dismissals at law, are themselves laying employees off or reducing their income. And it’s still early days.

It is also interesting how #MeToo, human rights, toxic bosses and the other matters that we all found so riveting in the pre-coronavirus era, seem so comparatively insignificant now.

Conduct that would have resulted in companies hiring crisis management firms to protect their “brand” is now simply lost in the noise.

A Statement of Claim describing contumelious employer conduct, which would have garnered headlines before, now barely attracts attention, with the media focused on COVID-19 all the time with little bandwidth for anything else.

With mass unemployment and fear of economic ruin for so many, stories of one bad boss or a sexually harassing manager seem less relevant to most peoples’ lives.

When I pointed out to one client how her employer laying off older employees could lead to additional human rights damages, her response was, “who cares about that these days?” But such complaints, and how a court will deal with them, are no less serious or different.

I don’t intend to single employers out for castigation. On my daily Newstalk 1010 show with Jerry Agar discussing CVOID-19 last Thursday, I remonstrated with callers that they should not be viewing this crisis as an opportunity for a boondoggle.

Whether it was employers asking if they could obtain the 75 per cent wage subsidy for their employees while staying home themselves and collecting the CERB benefit, to asking if both spouses could stay home to look after their child and get that benefit, to whether employees could quit their jobs without any real cause to get on the government payroll, several callers were seeking ways to fraudulently take advantage of emerging government programs.

With these evolving ruminations, here are answers to reader questions:

Q: The company let us work from home initially but now wants us back. We are working too close together for my comfort. Can I refuse to return?

A: After the right to treat a layoff as a wrongful dismissal, this, or some variant of it, is the most common question I have received.

If the employer is operating, it has a right to require employees to attend work. It does not have the obligation of permitting employees to work from home, even if working from home can be performed efficiently.

The only caveat is that an employee has the right to an objectively safe workplace. If there is a dispute, either party can call in a health and safety inspector. The employee need not work until that inspector attends and a ruling made as to whether it is safe. If ruled unsafe, the inspector should advise what adjustments should be made to ensure safety, whether more distance between employees desk, barriers etc.

But once found to be safe, a refusal to attend work can be cause for the employee’s discharge without compensation, including employment insurance.

Q: As work has been reduced, I have been assigned different work that I do not like and consider to be lesser work. Is that a constructive dismissal?



A:
If the change is only for the period of the crisis, and there is nothing inherently dangerous or demeaning in the new work, in my view, a court would have little sympathy for an employee’s claim of constructive dismissal.

Q: Does the Canada Emergency Response Benefit apply to students who were going to start a summer job, to seasonal workers and to employees who are between jobs?

A: In order to collect CERB you have to have been laid off as result of COVID-19 for at least 14 days. If you had not started your job yet, it will not apply. Similarly EI will not apply flowing from this new job.

Q: I want to pay my employees the 75 per cent provided by the government, but no more. Can I?

A: Any reduction in remuneration of more than 16 per cent is a constructive dismissal, so if you do not pay them at least another 10 per cent, the employee could take the position that they were discharged and seek wrongful dismissal damages.

But any reduction in earnings at all could lead to the employee suing for the difference. The legislation is not yet fully determined and the government is encouraging employers to make up the 25 per cent difference if they can. The ultimate legislation may have consequences for failure to do so.

I will be answering readers questions every Saturday. Send your questions to hlevitt@levittlllp.com.

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