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Over the course of the past year, many people have had reductions in earnings and received some form of government income assistance - EI, CERB or Canada Recovery Benefit (CRB). In some cases, employees who initially thought that their interruption or reduction in earnings was temporary have had their employment terminated.  In almost all termination situations an employee will be entitled to some form of termination payment from the employer. Employees who are also receiving government income assistance may wonder how their government payments will be impacted by their termination packages.  While not everything is crystal clear at this point, we have some thoughts! Layoffs and the Deemed IDEL  As noted, in some circumstances, employees have been temporarily laid off. During 2020, these layoffs converted into Deemed Infectious Disease Emergency Leaves (IDEL). Unless an employee is terminated, these Deemed IDELs will continue during the COVID-19 Period, which is presently set to end July 3, 2021.  While an employee is not receiving income, or while they are receiving 50% or less of their pre-COVID income due to COVID-19 reasons, they will typically be eligible for EI or the CRB.  Employees who have not had their employment ended at the end of the COVID-19 Period can expect to either be recalled to work or be placed on a temporary layoff. A temporary layoff can continue for up to 35 weeks if the employer continues the employee benefits. An employee can expect to continue to be eligible for CRB or EI after the COVID-19 period should they be continued on a layoff.  Terminations, EI, CERB and CRB An employee who is terminated while on the Deemed IDEL should receive their termination entitlements up to the date of their termination. This means that for the purposes of calculating length of service the employee’s time on the Deemed IDEL should be included. This should also mean that the income replacement benefits that the employee received prior to their termination date should not be required to be paid back, for reasons of double-dipping. The termination package should cover a time period after the termination date and therefore not impact the benefits received prior to the termination date.   While it is not 100% clear how the CRA will treat an employee’s continued entitlement to income replacement benefits following the termination date after the employee receives a termination package there are a few general principles:  EI - Typically an employee will not be entitled to EI when they are receiving income from the employer, and EI will regard termination payments as income. However, the government’s EI FAQs state that “As a temporary measure most separation monies received when you are laid off will not affect the payment of your EI benefits for the claims established on or after September 27, 2020 for one year.” This suggests that EI payments with respect to COVID-19 may be treated differently.  CERB - While the period for which employees could receive CERB is over, the government CERB FAQs indicate that “A severance payment does not impact an individual’s eligibility for the Canada Emergency Response Benefit.” This suggests that receiving a termination package will not disentitle an employee from their CERB. In a recent decision the Ontario Superior Court agreed - see Iriotakis v. Peninsula Employment Services Limited, 2021 ONSC 998. CRB - The CRB will likely be treated similarly to the CERB, and we expect that an employee will not have to repay the CRB if they also receive a termination package so long as they continue to maintain eligibility. An employee will be required to re-pay $0.50 of CRB for every dollar of net income earned above $38,000 in the calendar year.  Terminated employees who have been receiving income replacement benefits should get advice so that they can understand the impact of their termination packages on their entitlements to these benefits.Over the course of the past year, many people have had reductions in earnings and received some form of government income assistance – EI, CERB or Canada Recovery Benefit (CRB).

In some cases, employees who initially thought that their interruption or reduction in earnings was temporary have had their employment terminated. 

In almost all termination situations an employee will be entitled to some form of termination payment from the employer. Employees who are also receiving government income assistance may wonder how their government payments will be impacted by their termination packages. 

While not everything is crystal clear at this point, we have some thoughts!…
Continue Reading Termination Payments and Repaying Government Benefits – EI, CERB and CRB

IDEL extension July 3, 2021
Photo by Martin Sanchez on Unsplash

We had a feeling this might happen! And it has. The Ontario government has extended the length of the Deemed Infectious Disease Emergency Leave (IDEL) AGAIN! Enacting O. Reg 765/20, amending O. Reg 228/20 both under the Employment Standards Act (ESA). 

We have been warning our clients – and webinar attendees – about the upcoming January 2, 2021 end to the Deemed IDEL – it has now been extended to July 3, 2021. 

What is a Deemed IDEL? 

Employees who were laid off or had their hours reduced from March 1, 2020, until July 3, 2021, are on a deemed IDEL. During normal times, we would consider these employees to just be laid off but these regulations convert any reduction in hours – including all the way to ZERO hours and ZERO pay – to be deemed IDELs and not layoffs. …
Continue Reading New! IDEL Extension Until July 3, 2021

employee tests covid-19 positive
Photo by Kelly Sikkema on Unsplash

As case numbers rise, employers and employees alike may wonder what they should do if an employee or a co-worker tests Covid-19 positive. 

If An Employee is COVID-19 Positive

Obviously, an employee who has tested positive for COVID-19 should not return to work until they are no longer COVID-19 positive. In Ontario, workplaces are currently required to administer the daily screening tool, which ideally catches any infected employee early. 

Employers should assess the infected employee’s past actions and potential contacts. It may not be necessary to close the entire workplace, but it may make sense to close off their work area or the bathroom they used for a time and then to thoroughly disinfect the area.…
Continue Reading Covid-19 Infections At Work

executive termination package entitlements
Photo by Bernard Hermant on Unsplash

Unfortunately, lots of terminations are coming across our desks these days. While most employers understand that they need to provide notice of termination, many employees have a variety of different types of compensation which may or may not continue during the notice period. As with many things in law, it depends! 

Let’s go over some of the common aspects of executive termination packages.

A Primer on Notice

It all starts with notice! Unless an employee is being terminated for cause, they are entitled to notice of termination. “For cause” or “with cause” terminations are rare, so in most cases and absent egregious employee behaviour, employers will owe employees notice.
…
Continue Reading Termination Entitlements: Benefits, Bonuses and Commissions

New recovery benefits replace Canada Emergency Response Benefit
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So long, CERB! The Canada Emergency Response Benefit (CERB) has officially ended.

Those who were receiving the CERB can now apply for the new recovery benefits. These benefits are retroactive to September 27, 2020, and available until September 25, 2021.

The Canada Recovery Caregiving and Sickness Benefits

As of this Monday, October 5, 2020, the following benefits are now open for applications through the Canada Revenue Agency (CRA). Here is some information on these new benefits:…
Continue Reading Life After CERB: New Government Benefits

government income replacement programs post-CERB
Photo by Christina @ wocintechchat.com on Unsplash

Buh-Bye CERB

The federal government has introduced a suite of new income replacement programs which will take over from the Canada Emergency Response Benefit (CERB) once it ends on October 3, 2020. Note that individuals can still apply for the CERB until December 2, 2020, but the benefit application must be for income lost during the time period March 15, 2020 to October 3, 2020. FAQs about the CERB and the various application processes can be found on the government site here. 

Remember that while it has been very easy to get the CERB, it is not properly available to those who refuse to return to work or who quit their jobs because being on the CERB is more lucrative than working.…
Continue Reading New Government Income Replacement Benefits

Many restrictive convenants in agreements unenforceable
Image by Edar from Pixabay

We get a lot of questions from employers and employees about restrictive covenants. Many employment contracts include a restrictive covenant – a contractual clause that seeks to limit an employee’s ability to solicit the employer’s clients and/or employees and/or to compete for those same clients in the same geographical area once the employee leaves the employer.

Courts generally find restrictive covenants in employment agreements unenforceable, unless they are reasonable between the parties and not adverse to the public interest. Typically, if a restrictive covenant is ambiguous with regards to time, activity or geography, it will not be enforceable. Let’s take a look at non-solicit agreements.…
Continue Reading Non-Solicit Provisions in Employment Contracts – What You Need to Know

The CEWS, the CERB and Returning to Work
Photo by Ewien van Bergeijk – Kwant on U

As we look towards returning to work and re-opening businesses we thought we would re-visit the CEWS and CERB, both of which have recently been extended. 

The CEWS (Canada Emergency Wage Subsidy) continues to provide employers with a wage subsidy to bring employees back. The CERB (Canada Emergency Response Benefit) may be working against employers in some instances, where employees do not want to come back or serve to make more money by not working and staying on the CERB. 

Extension of the CEWS

The government has doubled the length of the CEWS program to now extend until August 29, 2020. Eligibility for the CEWS is broken down into periods, where an employer needs to demonstrate a specific revenue reduction for that period. Periods 5 (July 5 – August 1) and 6 (August 2 to August 29) are expected to require a 30% reduction in revenue, however, details have not yet been announced.…
Continue Reading The CEWS, the CERB and Returning to Work