Is your business feeling the effects of Coronavirus and rail blockades? There’s a government program for that

February 27, 2020 | Lisen Bassett, Gary S. Rosen

The reverberations of the recent CN railway blockades, which have caused delays in the movement of goods, as well as the impacts of the Coronavirus on the importation of goods from Asia, are being felt by businesses across Canada.

If your business is experiencing a temporary decline as a result of the rail blockades or the spread of the Coronavirus and you are considering your options, here’s one you should know about.

The Federal Work-Sharing program is a program offered through Employment and Social Development Canada, which is intended to help companies experiencing a temporary reduction in their normal levels of business activity (think revenue, sales, production etc.).

When employers experience financial difficulties, layoffs are often one of the cost-cutting measures that are implemented. While this might address an employer’s immediate cash flow concerns, it often results in the permanent loss of the affected employees who find other jobs during the layoff. The loss of employees is not one which is easily recoverable for employers who invest considerable time and resources in their employees and must face today’s labour market shortages.

The Work-Sharing program can assist employers in retaining their employees during a temporary reduction in normal levels of business activity by providing income support for employees eligible for Employment Insurance who agree to work fewer hours for the duration of the employer’s participation in the Work-Sharing program (such a group of employees is referred to as the “Work-Sharing unit”).

Employees who perform similar tasks, have the same job description, or whose work impacts one another may be placed within a Work-Sharing unit. The employees within the Work-Sharing unit must agree to reduce their normal work hours for the duration of the employer’s participation in the program and to share the available work equally amongst themselves. Information on the equalized reduction in hours and the implementation of the program in a unionized workplace can be found in the Work-Sharing applicant guide.

Only certain kinds of employers and employees are eligible to benefit from the Work-Sharing program. Below is a brief outline of the eligibility criteria. If you think you may fit the bill, please contact a member of Miller Thomson’s National Labour and Employment group for assistance with the process involved in applying for same, including strategies for obtaining consent of the affected employees.

Eligibility – Employers

Only publically held companies, private sector businesses, and not-for-profit organizations are eligible for the program.

Further criteria employers must fulfil to be eligible for the program include :

  • operating a year-round business in Canada (i.e. not seasonal work);
  • operating for at least 2 years;
  • demonstrating a recent decrease in business activity (approximately 10% reduction in sales or production);
  • demonstrating the decrease is temporary, beyond the employer’s control, and not cyclical; and
  • submitting and implementing a recovery plan designed to return the Work-Sharing unit employees to normal working hours.

Employers will be considered ineligible where the reduction in their business activity is related to:

  • a labour dispute (e.g. a strike, lockout etc.);
  • seasonal shortage of work or other reoccurring production slowdowns; or
  • a recent increase in the workforce (e.g. having doubled your employees and then discovering there is not enough work to fill their hours).

Eligibility – Employees

Only employees who work year-round (full time or part time), who are eligible for Employment Insurance benefits, and who agree to a reduction in their normal working hours as well as to share the hours amongst the Work-Sharing unit are eligible for the Workshare program.

Seasonal employees, students hired for a summer or co-op terms, casual or on-call employees, and shareholder-employees (who control more than 40% of the voting shares of a company) are not eligible for the Work-Sharing program.

Length of the Program

Work-sharing agreements can last between 6 and 26 weeks, with an option to extend by 12 weeks.

Employers must apply for an extension at least 30 days prior to the end-date of the Work-sharing agreement, indicating reasons for their failure to achieve recovery and demonstrating that the continued reduction in business activity will result in the layoff of, at minimum, one employee.

Applying

To apply for the Work-Sharing program, employers must fill out various forms, the links to which are provided here:

Note that a copy of Attachment A must be provided to your employees before submitting an application.

The completed application must be sent a minimum of 30 days before the requested start date and must be sent by mail to the following address, depending on your province:

Quebec

Quebec Processing Centre
Service Canada
1305 du Blizzard Street, Topaze building
Quebec, QC G2K 0A1

Ontario

Employer Program Supports
Service Canada Processing Center
PO Box 6500
Station Don Mills
Toronto, ON M3C 0L4

Western Canada

Vancouver Programs Unit
Service Canada
125 10th Avenue East
Vancouver, BC V5T 1Z3

For more information and details, you may consult the Federal Work-Sharing government webpage.

 

Miller Thomson is closely monitoring the COVID-19 situation to ensure that we provide our clients with appropriate support in this rapidly changing environment. For articles, information updates and firm developments, please visit our COVID-19 Resources page.

Disclaimer

This publication is provided as an information service and may include items reported from other sources. We do not warrant its accuracy. This information is not meant as legal opinion or advice.

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