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The current COVID-19 pandemic has caused considerable upheaval and uncertainty for the economy. This uncertainty, upheaval, and the responses thereto affect both employers and employees.
Given the communicability of the virus, federal and provincial health authorities have recommended that all Canadians self-isolate and practice drastic social distancing to assist in slowing the spread of COVID-19. These precautions have had the unfortunate effect of interrupting consumer and supplier activities, causing businesses to experience a loss in not only profitability, but more immediately, revenue streams.
In these circumstances, businesses need to be able to quickly respond to market downturns to safeguard their continued economic viability. However, employers owe a number of legal obligations to their employees, which must be observed. In this article, we explain an employer’s rights and obligations in the termination of an employment relationship, and the measures that the Government of Canada (the “Government”) has put in place to aid both employers and employees during this period of economic uncertainty.
Temporary layoffs and the termination of employment relationships.
In British Columbia, an employee is considered to have been “laid off” when they earn less than 50% of their regular weekly wages, averaged over the previous 8 week period. Depending on the circumstances of the employment, a lay off may be invalid and immediately deemed a termination of employment, triggering the employer’s obligation to provide reasonable notice of termination or pay in lieu.
The British Columbia Employment Standards Act (the “Act”)[1] does not provide a statutory right to lay off their employees.[2] However, in certain circumstances an employer may temporary lay off its employee, without running afoul of the Act. “Temporary Layoff” is defined under the Act as:
(a) in the case of an employee who has a right of recall, a layoff that exceeds the specified period within which the employee is entitled to be recalled to employment, and
(b) in any other case, a layoff of up to 13 weeks in any period of 20 consecutive weeks.
Any lay off that is not a “temporary layoff” as defined by the Act constitutes a termination of the employment relationship.
However, employers must be cautious when considering whether to rely on the “temporary layoff” provisions of the Act, as Courts have consistently held that employers are not permitted to temporarily lay off an employee, for any length of time, unless:[3]
Similarly, the law in Ontario also prohibits employers from laying off their employees, absent an express or clearly implied term in the employment agreement to that effect.[4]
Ultimately, the employer bears the burden of proving that the contract of employment contemplated temporary layoffs or that the layoff in question was agreed to by the employee.[5]
We recommend that employers consult with our workplace lawyers before deciding to lay off their staff during the COVID-19 outbreak.
Assistance to businesses and employees
In response to the COVID-19 emergency, the Government of Canada (the “Government”) has rolled out a number of economic assistance plans for both businesses and employees. We do not provided an exhaustive list, and note that this list is likely to change in the coming days, weeks and months.
There have been considerable changes in the Government’s planned assistance packages over the last week. On March 25, 2020, the Government announced that it would be revising a proposed assistance package made up of the Emergency Support Benefit and Emergency Care Benefit in favour a more streamlined and accessible approach. The new Canada Emergency Response Benefit (CERB) is an amalgamation of the previous proposals and is intended to be more widely available and more easily administered than the initially announced benefits.
Canada Emergency Response Benefit.
The CERB is a taxable benefit which will provide $2000 per month, for up to four months, to workers who lose their income as a result of the COVID-19 outbreak, regardless of whether they are otherwise eligible for EI Benefits.
The CERB is available to all employees and wage earners, including self-employed people and independent contractors, who have lost a job because they are sick, quarantined, or are unable to earn income because they are taking care of a loved one who is sick or who requires care due to school and daycare closures. Moreover, workers who are still employed but who have lost income as a result of disruptions in their workplace due to COVID-19 are also eligible to receive benefits under the CERB. In short, income assistance under the CERB will be broadly available to all Canadians who have experienced a disruption in their ability to earn income due to COVID-19.
The Government intends to begin taking applications for the CERB, through the “My CRA” and “My Service Canada” online portals, in early April. Benefit payments under the CERB will begin within 10 days of the application and will continue to be paid every four weeks thereafter. The CERB benefit period will run from March 15, 2020 through October 3, 2020.
Individuals who are currently in receipt of EI Benefits (as of March 25, 2020) will continue to receive those benefits and should not apply for assistance under the CERB. Moreover, those individuals who have already applied for EI Benefits but whose application has not yet been processed need not reapply for the CERB.
Those who are currently in receipt of EI Benefits, and whose benefit period ends prior to October 3, 2020 may apply for the CERB if they remain unable to work due to COVID-19. Lastly, individuals who are eligible for EI Benefits and remain unemployed will still have access to those EI Benefits following the expiration of the CERB period of October 3, 2020.
More information about the CERB can be found here:
https://www.canada.ca/en/department-finance/news/2020/03/introduces-canada-emergency-response-benefit-to-help-workers-and-businesses.html
Regular EI Benefits
Regular EI Benefits are available to employees who have been laid off or lost their job through no fault of their own. Regular EI provides claimants with 55% of their average weekly earnings up to a maximum weekly benefit of $573, for up to a period of 45 weeks, depending on the Claimant’s geographic location.
EI Sickness Benefits
EI Sickness benefits are available to those employees who miss work due to sickness or quarantine. In light of the COVID-19 crisis, the Government has waived the general one week waiting period for new EI Sickness Benefit claims for those who are sick or quarantined, meaning that Claimants may now be paid for the first week of their claim. Moreover, people claiming EI Sickness benefits as a result of being quarantined are not required to provide a medical certificate as evidence of their inability to work.
The following are some of the benefits that are available to businesses affected by COVID-19:
Expanded work-sharing programs
The Government has extended the maximum duration of EI Work-Sharing Agreements to 76 weeks, allowing employers to keep staff on the payroll longer, despite the COVID-19 related economic downturn.
Small Business Wage Subsidies
Some small businesses are eligible for temporary wage subsidies for a period of three months. The Small Business Wage Subsidy will be equal to 10% of the remuneration paid during the three month period, up to a maximum of $1,375 per employee and $25,000 per employer.
Both employers and individuals should stay informed of the available economic assistance in order to ensure their financial security during this period of economic uncertainty.
[1] Employment Standards Act, RSBC 1996 c 113.
[2] Collins v Jim Pattison Industries Ltd., 7 BCLR (3d) 13; Logan v Numbers Cabaret Ltd., 2016 BCSC 1473 at para 16
[3] Rennie Equipment Inc., Re, 2017 CarswellBC 2065 at para 48
[4] Chea v CIMA Canada Inc., 2016 ONSC 1937 at paras 3, 20-24; Employment Standards Act, 2000, S.O. 2000 c. 41, ss. 54, 56
[5] Rennie, supra at para 49; Chea, supra.
As we learn more of the scale and scope of the COVID-19 pandemic we also see rapid changes to the legal landscape within Canada. These changes, many of which are intended to be responsive to the immediate needs of Canadians, have been introduced quickly and, for the most part, absent political manoeuvring. Ontario amended its employment standards legislation earlier in the month with the British Columbia Legislature following suit this week in order to implement further protections for employees, and to create circumstances of further certainty for employers, arising as a consequence of work absences occasioned as a direct result of COVID-19.
On March 23, 2020, Public Safety Minister Mike Farnworth presented amendments to the Employment Standards Act (the “Act”). Most significantly, these amendments provide a legislated job-protection, in the form of unpaid leave for absences related to COVID-19. The Act further provides some clarity regarding COVID-19-related rights of employees and corresponding obligations of employers, all of which are retroactive to January 27, 2020.
To summarize, an employee who is acting in accordance with the instructions of health professionals and / or an Order of the Provincial Health Officer or an Order made pursuant to the Quarantine Act (Canada), who requests leave, is entitled to unpaid leave if any of the following circumstances apply:
The definition for “eligible person” includes, but is not limited to, children as well as adults who are unable, due to illness, disability or another reason, to obtain the necessities of life and is under the day-to-day care and control of that employee. The employee is entitled to an unpaid leave for as long as one of these circumstances continue to apply.
Employers are, however, permitted to request reasonably sufficient proof that confirming that such circumstances apply. Concomitantly, employees are obliged to provide proof, as requested, as soon as practicable. However, an employer must not request, and an employee is not required to provide, a note from a medical practitioner, nurse practitioner or registered nurse at this time.
Employees terminated on or after January 27, 2020 but before these amendments came into force, due to a circumstance described above, must be offered reemployment into the same, or comparable, position and, on re-employment, the employee’s service is deemed continuous, and the period of absence is deemed to be a leave.
We note that the BC legislature has not made any changes to the length of temporary layoff but we expect that, should these circumstances continue, there may be further amendments to the Act. These amendments are purposive and critical to the global effort to slow the spread of COVID-19. Employers and employees will now feel more confident as they follow the directions of Provincial Health Officer, Dr. Bonnie Henry, without fear of losing their employees or their employment.
Even before the COVID-19 pandemic, estate planning was top of mind at Oscar time with the fantastic movie, Knives Out. Without spoiling anything, the family patriarch in that movie does show a palpable sense of calm, knowing that he has a professionally executed estate plan in place amid the whirlwind of his unconventional day to day home life. Who doesn’t love a thriller based around the hijinks of estate planning?
Your family need not be of the dysfunctional variety seen in that film. For one to be vigilant, they must ensure firstly that they have an estate plan in place, and secondly that their estate plan is up to date.
Apparently we are all going to have a lot more time to sit on our couch for the foreseeable future. Once you have watched a few good movies, you may have some time to think about your estate plan. Here are a few topics of interest to most of our clients.
Your Executor
You may have an estate plan in place that needs updating. One of the aspects of an estate plan that requires a fresh look several times over your life is your choice of executor. The person you previously chose may have died or become elderly. Or, your minor children may now be old enough that you would trust them with being appointed. Your life and family may have become complicated such that you prefer to appoint a professional trustee to act as your executor, rather than having a family member or close friend deal with your estate.
It is often the choice of executor that people find the most difficult when putting together, or updating, their estate plan. Often, all other decisions have been made but this one causes the delays and difficulties. Perhaps, rightly so. It is a crucial decision and one not to be taken lightly. First, you need to decide whether you are picking a person close to you, whether a family member or close friend, or picking a professional trustee. Acting as an executor is difficult work and will involve a significant time commitment and possibly the navigation of difficult family dynamics. You may not want to saddle anyone close to you with that role and so you might consider the professional trustee. Professional trustees will provide a high level of service, but they charge significant fees.
If your executor has moved out of country or even out of province, you should also pick a new person to appoint. If your estate ends up with an executor that lives out of the country, that could have unexpected and unwanted tax consequences for your estate. Plus it is much easier for the executor to be in the province in which your estate will be probated.
No matter who you choose, it is ideal that you advise the person you appoint of your intention to appoint them. That person may be adamantly opposed, they may not plan to live in the province for long or there may be some other reason they are not a great fit for the task. You may not know this unless you discuss the appointment with them prior to making it.
Guardian for your Dependants
The other difficulty facing parents of minor (or yet unborn) children is naming a guardian. Of course, in two-parent homes that is less of a concern because the surviving parent will be the guardian by law. The key is to plan for the, hopefully, unlikely death of the surviving parent, or in the (again hopefully unlikely) event that both parents pass at the same time or within a short period of time.
Again, pick somebody you trust and discuss the appointment with them so they are not blindsided.
Tax Planning
The current and recent federal governments have made several sweeping changes that have rendered some tax planning tools far less effective. Testamentary trusts (basically, a trust created by a will) no longer receive favourable tax treatment and are now typically only used sparingly. The tax advantages of a family trust are now somewhat diminished. You may wish to speak to your accountant as well as a lawyer to ensure your tax planning remains current.
Alter Ego/Joint Partner Trusts
The planning options expand upon reaching 65 years old. Among other advantages, you can use an alter ego or joint partner trust to defer taxation, enhance the certainty of your plan and avoid the need to probate your estate. By avoiding probate, you avoid paying probate fees and you do not have to file an application for probate at the probate registry, which is accessible by the public. If you or your spouse has reached this age, it may be worth speaking to a lawyer about the possible advantages of incorporating a trust into your plan.
Dual Wills
Speaking of avoiding probate fees, if you have significant value tied up in company shares you should consider drafting dual wills. The secondary will passes your company shares separately and no probate fees arise on that value. The primary will passes everything else. There are a few specific things that need to happen to ensure this scheme is effective. For example, you need to ensure you have different executors for the different wills. You would need a lawyer familiar with this tool to assist you to draft these wills.
Power of Attorney/Representation Agreement
Any comprehensive estate plan should include these two planning tools. Each allows you to appoint another person to step into your shoes and make decisions or carry out specific transactions on your behalf.
Depending on your preferences, you may grant a power of attorney to be used by the grantee while you remain mentally competent or you may draft the power such that it only takes effect when you are unable to act due to mental or physical impairments. The power of attorney may allow the grantee to carry out all manner of financial or legal transactions, such as banking, entering into contracts, retaining and instructing legal counsel. It can be as restrictive or broad as your prefer.
The representation agreement has a narrower focus. It allows you to appoint a “representative” to speak on your behalf to medical professionals to assist you with medical and end-of-life type decisions in the event you are not competent to make those decisions.
Both of these planning tools may only be used while you are alive. Once you have died, your will takes over.
While there is much going on in the world that may be capturing your attention in these strange times, it may be worth taking some time to consider the state of your estate plan. A bit of effort now can save your next of kin a lot of headache later.
In view of COVID-19, on March 20, 2020, the Attorney General of Ontario ordered the suspension of limitation periods and other procedural time periods. The Order is retroactively dated to March 16, 2020.
The provincial government has made this Order pursuant to s. 7.1 of the Emergency Management and Civil Protection Act [“Act”], which authorizes the Lieutenant Governor to make appropriate orders in cases of a provincial emergency with respect to the operation of the law of Ontario.
This Order also suspends any procedural time periods for steps to be taken in any proceeding in Ontario, subject to the discretion of the court.
Pursuant to s. 7.1 (4) of the Act, the length of the temporary suspension shall not exceed 90 days. However, the Lieutenant Governor has the power to make an order to extend the temporary suspension for another 90 days. It is currently not known how long the Ontario government intends to suspend limitation periods and procedural time periods.
This new legislation is yet another unprecedented move in the current climate of uncharted waters due to the COVID-19 outbreak.
Less than a week ago, the threat of COVID-19 seemed remote. Today, it no longer feels that way. The governments of British Columbia and Ontario have each declared a state of emergency and ordered dramatic measures aimed at slowing the virus. The Federal Government has ordered travel restrictions and is preparing a massive relief package (currently noted to be over $80 billion). It has also embarked on an “extraordinary procurement” process.[1] However, the Federal Government has so far not employed the most potent weapon in its arsenal: the Emergencies Act.
If the COVID-19 crisis deepens, Canadians may have an opportunity to experience this powerful legislation. Below, we consider how the Emergencies Act operates in the context of a pandemic, and describe how it could impact the construction industry.
The Emergencies Act
The Emergencies Act is the successor of the War Measures Act, famously invoked during the October Crisis of 1970. The Act sets out four types of emergencies in which it can be invoked, and defines the types of powers which are afforded to the Federal Government in each of those emergencies. For our purposes, the relevant emergency considered under the Act is the “public welfare emergency” which is defined as follows:
public welfare emergency means an emergency that is caused by a real or imminent
(a) fire, flood, drought, storm, earthquake or other natural phenomenon,
(b) disease in human beings, animals or plants, or
(c) accident or pollution
and that results or may result in a danger to life or property, social disruption or a breakdown in the flow of essential goods, services or resources, so serious as to be a national emergency.[2]
The qualification that the public welfare emergency constitute a “national emergency” is an important one. A “national emergency” is also defined in the Act:
For the purposes of this Act, a national emergency is an urgent and critical situation of a temporary nature that
(a) seriously endangers the lives, health or safety of Canadians and is of such proportions or nature as to exceed the capacity or authority of a province to deal with it, or
(b) seriously threatens the ability of the Government of Canada to preserve the sovereignty, security and territorial integrity of Canada
and that cannot be effectively dealt with under any other law of Canada.[3]
It is beyond the scope of this article to explore whether the COVID-19 pandemic meets these requirements and our intent is not to speculate.
A public welfare emergency affecting more than one province may be declared by the “Governor in Council” (the Governor General). In practice, this means that the federal Cabinet has the power to make such a declaration. In any event, prior to making that declaration, the Governor in Council must “consult” about the proposed actions with the “lieutenant governor in council of each province in which the direct effects of the emergency occur.”[4] Nothing in the Act, however, appears to give the lieutenant governor(s) a veto; they merely need to be consulted. The state of emergency expires after 90 days, unless it is renewed or discontinued before its expiry.[5]
What are the Federal Government’s Powers in a Public Welfare Emergency?
When a “public welfare emergency” is declared, section 8 of the Act sets out the powers available to the Federal Government:
8 (1) While a declaration of a public welfare emergency is in effect, the Governor in Council may make such orders or regulations with respect to the following matters as the Governor in Council believes, on reasonable grounds, are necessary for dealing with the emergency:
(a) the regulation or prohibition of travel to, from or within any specified area, where necessary for the protection of the health or safety of individuals;
(b) the evacuation of persons and the removal of personal property from any specified area and the making of arrangements for the adequate care and protection of the persons and property;
(c) the requisition, use or disposition of property;
(d) the authorization of or direction to any person, or any person of a class of persons, to render essential services of a type that that person, or a person of that class, is competent to provide and the provision of reasonable compensation in respect of services so rendered;
(e) the regulation of the distribution and availability of essential goods, services and resources;
(f) the authorization and making of emergency payments;
(g) the establishment of emergency shelters and hospitals;
(h) the assessment of damage to any works or undertakings and the repair, replacement or restoration thereof;
(i) the assessment of damage to the environment and the elimination or alleviation of the damage; […]
Clearly, these powers are very broad, and several have obvious implications for construction industry participants.
The word “essential” appears in sections 8(d) and (e). Specifically, section 8(d) allows the government to direct any person to render “essential services”, and section 8(e) refers to “essential goods, services and resources”. The word “essential” is not defined in the Act, however section 5 refers to a “breakdown in the flow of essential goods, services or resources, so serious as to be a national emergency.” It is submitted that “essential” could reasonably be interpreted to mean essential to the lives, health and safety of Canadians, or to the ability of the government to preserve the sovereignty, security, and territorial integrity of Canada.
Implications for Construction Industry Participants
Significant emergencies often require new infrastructure, changed supply chains, and manpower to effectively address the emergency. Given the nature of the threat posed by COVID-19, we can foresee the following possible implications for construction industry participants if a public welfare emergency were to be declared:
A failure to comply with an order or regulation made under section 8 can result in a fine or 5 years of imprisonment.[6]
Finally, it should be noted that the Federal Government “shall award reasonable compensation to any person who suffers loss, injury or damage as a result of any thing done, or purported to be done” in relation to an order or regulation made pursuant to section 8 of the Act.[7] However, the quantum and conditions for receiving that compensation appear to be entirely within the discretion of the Federal Government. It is possible that “reasonable compensation” for property damage, expropriations, or compelled service may not reflect fair market value, although it is to be hoped that market value would be the benchmark utilized.
Conclusion
The Emergencies Act is a significant piece of legislation with similarly significant consequences if invoked. While a declaration of a public welfare emergency would be unprecedented in Canada, these are unusual times. A pandemic of this scale has not been seen since 1918. COVID-19 has already caused the United States to invoke that country’s Defence Production Act.
If the Act is invoked, construction industry participants will undoubtedly fulfil their civic duty and rapidly comply with the orders and regulations made under the Act.
[1] Federal Government Press Briefing with Deputy Prime Minister Freeland, March 19, 2020.
[2] Emergencies Act, RSC 1985, c 22 (4th Supp) [“Emergencies Act“], s 5.
[3] Emergencies Act, s 3.
[4] Emergencies Act, s 14.
[5] Emergencies Act, s 7.
[6] Emergencies Act, s 8(1)(j).
[7] Emergencies Act, s 48.
Introduction
The recent and rapid development of the COVID-19 pandemic, both globally and nationally, has given rise to a myriad of significant concerns.
High among these concerns is employee health and safety, and an employer’s obligation to protect its employees. In part due to the unprecedented measures being taken at all levels of government (Federal, Provincial, and Municipal) to minimise the impact of the pandemic on the Canadian people, uncertainty has arisen regarding employees’ rights and obligations to attend at (or avoid) a work site given potential exposure to COVID-19. With that in mind, we outline some key considerations and suggestions for managing the work site from a health and safety perspective during this uncertain time.
Preliminary Note
Employers should bear in mind that, regardless of the presence of a COVID-19 risk, the designated Constructor (typically the Owner or a third party to whom it has delegated responsibility[1] or named as Prime Contractor or qualified coordinator[2]) of the work site is responsible for ensuring that all stakeholders comply with health and safety legislation. This responsibility includes, among other things, creating a schedule of regular health and safety inspections, as well as selecting a health and safety representative or (depending on the circumstances) establishing and managing a health and safety committee comprised of stakeholder representatives.[3]
Employees’ Right of Refusal
By operation of Provincial and Federal occupational health and safety legislation, generally, employers are obliged to provide a workplace that protects “workers and other persons present at workplaces from work related risks to their health and safety.”[4] Employees have a right to refuse to work at a site that fails to protect their health and safety, so long as employees have a reason to believe that their health is in danger or that the work site poses an undue hazard. In the present circumstances, the COVID-19 virus may, depending upon the circumstances, satisfy this test.
Where an employee exercises this right of refusal, the employer’s obligations are immediately triggered. On being notified of the employee’s refusal, the employer must advise other relevant persons (such as a health and safety representative and/or the appropriate governmental authority) of the refusal, determine whether the employee’s refusal is justified in the circumstances, and advise the employee of the employer’s determination.
Determining what is justified in the circumstances is complex at the best of times, and has only been made more complicated by the uncertainty and change that COVID-19 has brought (and continues to bring). Accordingly, we recommend that employers exercise caution as the COVID-19 pandemic continues to evolve and as our understanding of it, and governmental reaction to it, evolves as well.
Suggested Procedures
As an employer’s ability to manage work sites in response to COVID-19 is complicated by the uncertainty surrounding the virus itself, we recommend implementing a complete and robust procedure for addressing potential dangers to employees and the work site arising from the virus. Employers should bear the following considerations in mind in crafting procedures to address circumstances where staff have become aware of a precautionary quarantine or confirmed case of COVID-19:
1. Immediate Health and Safety: first and foremost, the employer must take all reasonable steps to ensure that workers at the work site (including those people working on site for suppliers, contractors, and/or consultants) and the public are not exposed to an immediate risk to their health or safety. Depending on the circumstances, initial steps may include shutting down all or part of a site and notifying the appropriate public health authorities. Should the course of action include shutting down the site, the employer must also ensure that the site is secure and that the site and associated risks have been remediated to the extent possible before vacating the site. Depending on the nature of the site, it may or may not be possible to clean the affected area.
2. Collection and Dissemination of Information: second, and beyond immediate health and safety, the employer is well advised to have a detailed plan in place to collect and disseminate information related to any COVID-19 risk and/or exposure. Such a plan may include:
Once this relevant information has been obtained, the employer should relay it to stakeholder representatives, and the relevant public authority where appropriate.
3. Debriefing and Communications: the employer must debrief stakeholders (including unions, employee associations, and owners) as soon as reasonably possible subsequent to collecting the above-mentioned information, in order to plan next steps in a manner consistent with public health and safety. Any such debriefing must observe social distancing procedures required and/or recommended by all levels of government or it may be that the debriefing needs to be conducted virtually.
4. Implementing Next Steps: debriefing is intended to result in a concrete plan for the implementation of next steps, including whether such steps are to be taken by the employer, other stakeholders, such as subcontractors or suppliers, or third parties. Any such plan should establish a methodology to eliminate the COVID-19 risk and reopen the work site, and should be based on the implementation of plans created by Response Groups, as described below. Such steps may also include establishing a regular meeting schedule to ensure that all stakeholders are up to date with respect to the COVID-19 risk (both to employees and the physical work site), and issuing a report or reports regarding the risk.
5. Reopening the Work Site: where the employer has closed the work site, the employer and all stakeholders should conduct a final, detailed review of the site prior to reopening so that stakeholders may satisfy themselves that the site no longer poses a risk to the health and safety of workers and the public, and that there is no risk of running afoul of the applicable health and safety legislation.
Additionally, employers should bear in mind that the work site may be shut down by a health and safety inspector where the inspector finds a danger or hazard to the health or safety of a worker. In that circumstance, the inspector may order that the work be stopped until the danger (e.g. the COVID-19 risk) is removed, and work may only resume after the inspector’s order is withdrawn or cancelled.[5]
COVID-19 Response Groups
Given the rapidly-evolving nature of COVID-19, many employers have already taken steps to create dedicated COVID-19 response groups in order to coordinate organizational plans with stakeholders and disseminate real-time updates and guidance with respect to working conditions as they arise. These response groups may set policies with respect to work site operations, such as splitting work shifts and staggering breaks in order to reduce physical contact between workers, reducing or eliminating meetings and employee travel to the extent possible, and implementing enhanced cleaning measures.
We recommend, for those employers who have not already implemented a COVID-19 response group, that they do so as soon as possible. These groups will not only facilitate the handling of existing site health and safety conditions, but may also be deployed to plan a response to other potential issues before they arise, such as supply chain disruptions and other business interruptions, as well as increased IT infrastructure requirements resulting from the increase in remote work.
It will come as no surprise to employers that the COVID-19 pandemic represents unprecedented circumstances for Canadian employees and employers alike – the construction industry is no exception to this. In these circumstances, caution and diligence will be necessary for the foreseeable future. We encourage employees and employers alike on construction projects to implement detailed procedures in order to address COVID-19 in a manner that protects the health and safety of all stakeholders.
[1] Occupational Health and Safety Act, RSO 1990, c O.1 at s. 23(1),
[2] Workers Compensation Act, RSBC 1996, c. 492, as amended, s. 118; and B.C. Reg 296/97, Part 20 – Construction, Excavation and Demolition.
[3] Occupational Health and Safety Act, RSO 1990, c O.1 at ss. 8 and 9.
[4] Workers Compensation Act, RSBC 1996. c. 492, as amended, Part 3, Occupational Health and Safety, s. 107; and B.C. Reg. 296/97 Occupational Health and Safety Regulation, s. 3.12. See also, Occupational Health and Safety Act, RSO 1990, c O.1 at s. 43.3(c).
[5] Occupational Health and Safety Act, RSO 1990, c O.1 at s. 57. See also, Workers Compensation Act, RSBC 1996. c. 492, as amended, Part 3, Occupational Health and Safety, s. 191.
It is hard to believe that the SARS epidemic, which until recently felt like a distant memory, occurred a mere 17 years ago. Unfortunately, it is with the recent outbreak of the novel coronavirus, COVID-19/COVID-19 that we are reminded of the speed and severity with which these viral outbreaks can arise, take hold, and severely impact lives, livelihoods, business, commerce, and global markets.
While the statistics for rates of infection are rising at an alarming, headline grabbing rate, it is crucial that employers are prepared to address the impact of COVID-19, and any new epidemic. Employers have legislative obligations requiring them to ensure that the workplace is safe. Failure to comply with this obligation may result in severe consequences including reputational damage and financial consequences including loss of human capital and fines.
An employer’s obligation to protect the health and safety of “workers” in the employer’s workplace is set out in the Workers Compensation Act (the “Act“) and the Act’s Occupational Health and Safety Regulation (the “Regulation”). It is likely that inadequate measures to prevent the spread of a deadly virus will constitute a danger to the health and safety of workers. In the face of an employer’s failure to meet its legislated responsibilities, employees have the right to refuse to work and cannot be disciplined for so doing.
Employers are further obliged under Human Rights legislation to provide a workplace that is free from discrimination and harassment. Discrimination in employment on the basis of certain protected grounds including, but not limited to, race, ancestry, place of origin, physical or mental disability is prohibited. When SARS was at its peak in 2003, the Ontario Human Rights Commission confirmed that SARS was included within the definition of ‘disability’ under the Ontario Human Rights Code.[1] Given that COVID-19 is in its early stages we have yet to see any similar statements issued however, we anticipate that the treatment COVID-19 will be similar to the treatment of SARS vis-à-vis any discriminatory conduct. Accordingly, employers must be mindful of differential treatment of employees with, or who are perceived to have, COVID-19, other than for the health and safety of the workplace.
A general best practice is to discourage employees from attending at the workplace if they are symptomatic of any contagious illness (flu, cold and COVID-19 included) given the risk they may pose to the health and safety of the workplace. To that end, employers ought to remind employees that they will not be penalized if they are ill and do not attend work. Accommodating sick or at risk employees through alternative work arrangements such as working remotely is encouraged. Employers should work with employees to facilitate any claims for sick leave (or short term disability if available). In the alternative, employers should allow employees to use vacation time or days in lieu.
Unpaid leave is ill-advised and should be the solution of last resort given the risk employees will attend work while ill to avoid financial hardships. Under the Employment Standards Act employees are entitled to up to 5 days unpaid leave to care for an ill family member. In Ontario, during the SARS epidemic, the SARS Assistance and Recovery Strategy Act was passed which allowed for addition leave to an employees. Again, we have not yet seen similar legislation in Ontario or any other provide but employers should be mindful of any legislative amendments and entitlements and encourage employees to utilize their paid or unpaid leaves where appropriate.
Finally, employers must balance these obligations with the employee’s right to protection of personal information including health status. Whether to breach confidentiality of employees who are diagnosed or symptomatic and possibly under quarantine for the safety of the workplace should be assessed on a case by case basis.
These epidemics are not infrequent; in the last 17 years we have experienced SARS, H5N1, Swine Flu, MERS, Ebola and Zika. Being prepared to address global health crises will significantly reduce the risk to employers and employees alike.
[1] http://www.ohrc.on.ca/en/news_centre/commission-urges-tolerance-and-respect-during-sars-health-emergency.
On March 11, 2020, the World Health Organization (the “WHO”) declared that the outbreak of COVID-19 is a pandemic. Earlier, on January 30, 2020, the WHO stated that the outbreak constituted a Public Health Emergency of International Concern.
General Effects on the Construction Contract
The virus has caused and will inevitably cause significant business and operational disruptions, including disruptions to supply and distribution channels, logistics, and labour. As a result of the outbreak, many suppliers will be unable to fulfill their contractual obligations.
In January the China Council for the Promotion of International Trade announced that it would be offering “force majeure certificates” to assist businesses when disputes with foreign trading companies have arisen as a result of the government measures imposed to tackle the COVID-19 outbreak. It has been recently reported that over 1,600 “force majeure certificates” have been issued.
In light of the potential implications to construction projects, it is important to review the respective rights of parties under the agreements they have entered into.
Force Majeure
Generally speaking, Force Majeure provisions provide for extensions of time if works are delayed by reason of circumstances beyond the control of the parties. As there is no universal definition of what constitutes Force Majeure, the determination of whether an event can be characterized as a Force Majeure event is dependent on the contract language used, including the scope of the Force Majeure clause at issue.
For example, Force Majeure provisions may include specific reference to issues such as “disease”, “illness”, “epidemics”, “pandemics”, or “quarantine” which could encompass COVID-19. Other definitions refer to “government order”, “government action”, “public health emergency” and “national emergency”, which may apply to certain COVID-19 related matters.
In any event, it is important to note that the onus will be on the affected party to establish that the circumstances surrounding the outbreak of COVID-19 entitles it to relief under the contract at issue. Further, many construction contracts will impose a duty to mitigate and notify, which a claiming party needs to adhere to.