The dramatic downturn in the Canadian labour market has forced employers to be resourceful in order to keep their businesses afloat and their employees on the payroll.
The unprecedented challenges brought on by the COVID-19 pandemic have forced us to reflect on the lessons learned and the practical considerations that may be implemented in order to provide clearer avenues for employers and to decrease their overall risk and liability.
Specifically, by improving their employment agreements, employers can seek to limit their liability both in the future and throughout the remainder of the pandemic. The following are some tips for consideration.
Throughout the course of the pandemic, we have witnessed an unprecedent number of layoffs. However, without an express clause allowing an employer to layoff an employee, the common law generally dictates that employers are not entitled to place employees on a layoff. Therefore, many employers effectively increased their liability by placing their employees on unauthorized layoffs, and running the risk of constructive dismissal claims.
To avoid this risk and manage their liability, employers may wish to include a layoff provision in future employment agreements, which authorizes the employer to place the employee on a layoff pursuant to the Employment Standards Act, 2000 (“ESA”). This may allow employers to rely on the clause to effect legal layoffs and to reduce their overall liability with respect to constructive dismissal claims.
Employers interested in amending their employment contracts should contact an employment lawyer to ensure that it is drafted in accordance with the legislation and is likely to be found enforceable by the courts.
Work from home provisions
The COVID-19 pandemic has greatly changed the landscape of the workplace, and there has been a major shift towards work from home arrangements. Remote work is likely to remain given that we are continuing to manage the pandemic, and this arrangement reduces health and safety risks for individuals and workplaces. However, for remote work to be successful, there is a high level of trust and accountability between the employer and employee.
Employers are encouraged to develop and clearly outline their expectations with respect to work from home arrangements in future employment agreements. Specifically, employers should consider outlining specific policies with respect to the following:
- Work environment and location;
- Hours of work and overtime;
- Equipment and supplies; and
- Family responsibilities and accommodation.
Employers are encouraged to work with an employment lawyer in drafting and/or updating their policies with respect to work from home policies to ensure that they remain in compliance with the ESA and any other applicable legislation.
The ESA authorizes employers to assign vacation to their employees, and as such, we have continued to see employers place employees on vacation to mitigate their financial losses.
If an employer wishes to rely on this provision of the ESA, it is generally good practice to include language in the employment contract that outlines the right of the employer to assign vacation time. This also provides employees with the expectation that they may not be able to select their own vacation time.
In light of the pandemic, employers may also wish to consider including language in future employment contracts that contemplates employees travelling outside of the country during the pandemic. Specifically, for employees who are actively attending the office, a one-week vacation could turn into a much longer vacation if the employee is subjected to a period of quarantine/self-isolation.
Employers looking to amend or add a vacation provision, including with respect to travel outside of Canada, should speak with legal counsel.
Employers looking to amend and update employment contracts with current employees should be mindful of the elements that must be satisfied for the agreement to be found valid and enforceable. Specifically, there must be an offer, acceptance and “fresh” consideration for the amended employment contract to be valid. Without “fresh” consideration, such as a signing bonus or increase in the employee’s annual salary, an employer may not unilaterally alter the terms of the employment contract without running the risk of a constructive dismissal claim.
Given this, employers looking to amend employment contracts, whether for current or future employees, may wish to speak to an employment lawyer so that they can advise on the language of the new and/or amended provisions, as well as assess the enforceability of the provisions and/or contract a whole.
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