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Coronavirus: What to know if you’ve been laid off or can’t work

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Uncertainty continues to grow around the COVID-19 outbreak and its impact on the Canadian economy. Both employees and employers across Canada are in precarious situations.

But employment laws continue to apply during the pandemic. While employers have to make difficult decisions with respect to their staffing requirements, such decisions may have significant legal consequences, giving employees the right to seek compensation.

Here are the legal principles employers and employees must be aware of when it comes to layoffs and inability to work.

Am I owed severance if I am let go due to the COVID-19 outbreak?

Businesses across Canada are being negatively impacted by the response to the pandemic. Many employers have chosen to permanently lay off employees to reduce the cost of payroll.

An employer can terminate an employee or let an employee go at any time for almost any reason, as long as the reason does not violate the employee’s human rights and is not discriminatory. This is what we call a termination without cause.

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In a termination without cause, the employee is owed payment in lieu of notice, otherwise known as severance. Every province’s respective Employment Standards Act determines the minimum amount of severance an employee should receive.

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Common law, however, sets the standard amount a laid-off employee should actually receive. Calculating severance under common law means considering the employee’s age, years of service with the company and position, and the terms of their employment agreement.

If you have lost your job due to the COVID-19 outbreak, you are likely owed severance under common law, which can mean quite a significant amount. An employment lawyer can help determine your full rights and entitlements.

READ MORE: 44% of Canadian households report lost work amid COVID-19 pandemic: poll

Can I be laid off temporarily due to the COVID-19 outbreak?

Some businesses in Canada have shut down their offices and are instructing employees to stay home without pay to reduce the spread of the novel coronavirus.

This is often referred to as a temporary layoff. An employee who is forced to take unpaid time off of work under these circumstances can rely on vacation time, paid sick days, unpaid sick days or employment insurance for financial support.

Employers do not have the automatic right to temporarily lay off an employee. There must be something in a contract that has been signed or otherwise approved by the employee affording the employer this right.

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In most cases, if an employer imposes a temporary layoff on an employee, that employee is entitled to treat the layoff as a termination and seek their full common-law severance.

Employees who have been temporarily laid off have a choice. They can choose to accept the layoff and wait and see if their employer will call them back to work at some point. Or they may choose to treat the temporary layoff as a termination and seek severance immediately.

One of the dangers of accepting the layoff and not pursuing severance right away is that the company may not be able to resume business and pay the severance in the future.

READ MORE: Coronavirus: Here’s how to apply for EI and the new COVID-19 emergency benefit

What can I do if my anxiety is preventing me from working?

If you feel you cannot work due to anxiety, speak with your doctor. If your doctor agrees and provides you with a note, you are entitled to be off of work and cannot be fired. You can use your sick days and apply for EI sickness benefits.

Employees who cannot work due to anxiety can also apply for any disability benefits available under a workplace health plan, such as short-term disability benefits, long-term disability benefits or both.


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Lior Samfiru is an employment lawyer and partner at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in employment law and disability claims. Visit their website to learn more about your rights.