Further to the Quebec government directive of March 23, many Quebec companies must revaluate their workforce and some are even forced to simply suspend their activities no later than Tuesday, March 24th, at midnight, until April 12th, inclusively.
Loranger Marcoux is one of the companies which will continue its activities after March 24. All our professionals therefore remain available to receive and answer employers’ questions on this subject. In addition, we remain available to assist them in all aspects of their human resource management. We support our clients every day, at any time.
*Update: On March 24, the government modified the directive by stating that “businesses which provide non-priority services, excluding stores, can maintain minimal operations to ensure the resumption of their activities, bearing in mind the directives issued by public health authorities”.
We have prepared a practical list of Questions & Answers to help employers navigate these exceptional circumstances.
It should be noted, however, that if there is currently a collective agreement in effect, the employer may also have to refer to the specific rules it might contain regarding layoffs and workforce reduction.
1. Which companies are affected by the temporary closure imposed by the Quebec government?
A. These are companies that are not considered to offer priority or essential services (Link: https://www.quebec.ca/en/health/health-issues/a-z/2019-coronavirus/essential-services-commercial-activities-covid19/). Note that the non-essential activities of these companies may nevertheless continue through remote work.
2. What is a temporary layoff?
A. A temporary layoff temporarily suspends the employment contract between the employer and the employee. The layoff does not end the employment contract. The laid off employee can be recalled to work. He retains his employment relationship for the duration of his layoff.
3. When an employee is laid off, is he entitled to the payment of his accrued vacation and to the payment of 4% or 6%, as the case may be, of the gross salary he earned during the reference year in progress?
A. No. Since the layoff does not end the employment contract, these amounts do not have to be paid at this time. The Act respecting labour standards provides that it is only when the employment contract is terminated that such sums are due.
4. Does the temporary layoff end the employment contract when it reaches six (6) months?
A. No. But when it reaches six (6) months, an employer must pay the laid-off employee the minimum compensatory indemnity provided for in the Act respecting labour standards, according to the employee’s length of service with the company. However, it should be noted that this compensatory indemnity does not have to be paid when the layoff is due to superior force (force majeure).
5. During the layoff, does the employer have an obligation to maintain group insurance coverage?
A. The Act respecting labour standards does not provide for this obligation. However, when the applicable group insurance contract allows it, an employer could decide to maintain coverage for his laid-off employees.
6. During a temporary layoff, is the employer required to send a letter to his employees?
A. The Act respecting labour standards does not require that a letter be provided. However, we recommend that each laid-off employee receive one which includes an explanation as to what constitutes a layoff, the reasons for it, the expected duration of the layoff (if it is possible to determine it at this time) and lists the organizations to contact if necessary, etc.
7. Do I have to issue a Record of employment for my laid-off employees?
8. What code should I enter in box 16?
A. Code “A”, Shortage of work
9. How can I produce it?
A. In paper format or electronically.
10. What are the deadlines to produce it?
A. If it is in paper format, it must be provided within five (5) civil days of the first day of income interruption.
In electronic format, it must be produced no later than five (5) civil days after the end of the pay period during which the employee’s income was interrupted.
11. If, due to the strict deadlines imposed by Premier Legault for closing businesses, an employer is unable to provide or produce the Records of Employment to its employees, what will happen?
A. Section 19 of the Employment Insurance Regulations provides that when an employer has failed to deliver a record of employment to an insured person, or the employer is not available or is unable to provide information respecting the hours of insurable employment and the insurable earnings of a claimant, because the employer’s records are destroyed or lost, the claimant may provide, with respect to his employment and his insurable earnings, a statement with supporting evidence.
This should not consequently deprive the employee of obtaining his employment insurance benefits.
In addition, the employer’s liability that a complaint will be allowed against him for not respecting the deadlines previously mentioned appears to us to be very low given the current exceptional situation.
12. In general, does an employee who is laid off have the right to employment insurance benefits?
A. Generally, for all regions of Quebec (except that of Gaspésie-Îles-de-la-Madeleine), an employee must have accumulated 700 hours of work in the last 52 weeks preceding the request to benefit from employment insurance.
The Employment Insurance Act provides for an extension of the reference period by an additional 52 weeks for people who were, for example, on maternity leave, sick leave, etc.
In addition, the government has announced that the rules will be softened for people who would normally not be eligible for employment insurance, given its announcement closing businesses for a minimum period of three (3) weeks, from March 24th to April 12th inclusively.
13. When should an employee file an application for employment insurance benefits?
A. As soon as he stopped working, even if the employer has not yet given him his Record of Employment. Indeed, a delay of more than four (4) weeks before proceeding to the request can lead to a loss of benefits.
14. How much will an employee receive?
A. For most people, the base rate used to calculate benefits is 55% of average weekly insurable earnings, up to a maximum amount.
As of January 1, 2020, the maximum annual insurable earnings are $54,200. This means that an employee can receive a maximum amount of $573 per week.
15. Do employees have to wait a certain period before being paid?
A. Usually, the first payment will be made within 28 days of Service Canada receiving the claim. In addition, the employee will have to absorb a waiting period of one week where he will not be covered. At present, the only cases in which the waiting period has been withdrawn are those resulting from the forced isolation of employees due to the coronavirus.
16. How long will employees receive employment insurance benefits?
A. Between 14 and 45 weeks, depending in particular on the number of insurable hours an employee will have accumulated during the reference period.
17. Can the employer terminate an employee during the temporary layoff?
A. Yes. Especially if the employer concludes that he will definitely no longer need the position occupied by the employee and that, consequently, he chooses to abolish it. In the event of a legal dispute, the employer may have to demonstrate that its decision is based on objective criteria.
18. What happens if, within two to three months, an employer realizes that it will not be able to recall at least ten (10) employees from the same establishment within six (6) months after layoffs?
A. The Act respecting labour standards outlines specific obligations for employers who carry out a collective dismissal.
A collective dismissal occurs when an employer terminates the employment of 10 or more employees of the same establishment over a period of two (2) months, or lays off at least ten (10) employees of the same establishment for a period of more than six (6) months.
The Act respecting labour standards establishes the procedure to be followed and the deadlines to be observed for sending a notice of collective dismissal. These deadlines depend on the number of employees impacted. The Act also provides for modalities related to the occurrence of unforeseen situations or superior force (force majeure) preventing the observance of deadlines provided for in the Act.
19. Rather than layoffs, does an employer have other alternatives?
A. Yes. Among other things, there is a “work-sharing” program. It is an accommodation program designed to help employers and employees avoid layoffs due to a temporary decrease in the company’s normal activity levels that is beyond the control of the employer.
This measure provides income support to employees eligible for Employment Insurance benefits who temporarily reduce their work week during the business turnaround period.
Other measures may also be considered by an employer on a temporary basis, such as reducing working hours, reducing wages, etc.