March 2020

Legal Considerations for Employees, Employers, and Businesses in the COVID-19 Era

Legal Considerations for Employees, Employers, and Businesses in the COVID-19 Era

While SARS and H1N1 were significant health issues, Canada has not before experienced a pandemic of this scale.  COVID-19 may require that Canadian law be applied to some novel issues that arise.  However, we address below some of the main legal issues that are expected to arise for DAS customers as a result of COVID-19.

Both employees and employers are facing a great deal of strain and will want to understand their rights and obligations. Will employees be paid if they are unable to work because they are quarantined? What if they are unwilling to go to work for fear of illness? If a business experiences a slow-down, can employees be laid off or terminated? Employers will want to know what to do if employees cannot, or refuse to, perform their work. Can employers force employees to stay home or take their temperature when they come to work? Can they restrict their employee’s personal travel and leisure activities?

The answers to many of these questions depend on the applicable contract of employment or the terms of the applicable provincial employment standards legislation. In addition, it is important to know that governments are in the process of drafting emergency legislation to address these kinds of issues in the COVID-19 context. This legislation may override clauses in employment contracts and existing employment standards.

Generally speaking, employees have the right to a safe workplace. This means that if the workplace is deemed to be unsafe, by reason of COVID-19 or otherwise, they may refuse to work. However, the fact that Canada is experiencing an outbreak of COVID-19 does not automatically mean that workplaces are unsafe for the average worker. In order to maintain safe workplaces, employers should take measures to keep their employees safe such as, when possible, implementing work from home policies, taking extra cleaning precautions, requiring sick workers to stay home, and other reasonable measures depending on the workplace.

With respect to termination, generally speaking, employees can be terminated due to a business closure or a reduction in profits - these kinds of terminations are called “not for cause” terminations. In “not for cause” terminations, employees are entitled to severance pay. The amount of severance pay that an employee is entitled to is dependent on a number of factors including: the employee’s contract of employment, and the amount of time they spent with the employer as an employee. In the context of COVID-19, employers should be mindful that they are not infringing on human rights legislation by terminating employees who are unable to work due to family status such as having to care for children or elderly parents.

Contract Disputes
If a large proportion of their workforce becomes ill or is quarantined, businesses may not be able to supply goods or services that they are bound by contract to deliver. Alternatively, a company’s clients might refuse to pay for and accept delivery of products or services that they ordered prior to the outbreak of COVID-19.  Unfortunately, this pandemic is likely to lead to disputes between contracting parties. So how can businesses deal with COVID-19-related contract disputes?

The wording of the contract and the details of the situation will determine whether the parties remain bound by the contract or what remedies are available. The circumstances of COVID-19 may make a contract impossible to perform or frustrated, or may trigger a contract’s force majeure clause permitting the contract to end without responsibility or remedy. 

Is a significant amount of legal action on the horizon?
As always, the first step should be to reach out to our employees, employers and business partners and have a conversation. Often, simply speaking to other parties to work out a reasonable path forward leads to the best end result for all involved. The Federal and Provincial Governments may also pass special legislation to address some of consequences caused by state of emergency declarations. These reasonable actions may help flatten a potential wave of legal actions after the COVID-19 pandemic has passed.

If the first step of having a conversation with the other party does not lead to a reasonable and agreed result, DAS insureds can use our the Legal Helpline to seek some help with the next step. Thereafter, contract or employment-related disputes resulting in a Claim will be handled in the same manner as before the arrival of COVID-19; with reasonable prospects, legislative requirements and common law precedents being applied during the entire claims handling process. 

The foreseeable future is uncertain at this time, but DAS will continue to emphasize our service and responsiveness to our insureds that is essential to our offering. In the meantime, let’s focus on staying at home and staying well, to protect ourselves, the ones we love and respect and our communities and country as a whole.

Posted: 3/27/2020 11:31:37 AM by Alexandrea Sharpe

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