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Job Loss during COVID-19: Government Subsidies and Benefits

Many businesses and workers have suffered severed financial loss as a result of mandatory business closures resulting from COVID-19. Fortunately, the government of Canada and the province of Ontario have stepped up by introducing a number of programs to help alleviate the negative impact of the economic downturn. In this blog post we will highlight a few of the government programs designed to assist workers who have been impacted by the pandemic and also commercial landlords and tenants.

First, Am I Entitled to Notice or Severance from my Employer?
The Employment Standards Act (ESA) sets out the minimum obligations of employers following the termination of employment, including notice of termination (or pay in lieu thereof) and severance pay obligations. If you have an employment contract that does not specify that your “ESA entitlements represent your full entitlements on the without cause termination of your employment,” you may be entitled to common law notice, which provides for more generous notice requirements.

Whether or not you are entitled to common law notice is based on the terms of your employment contract; and the amount of such notice is dependent on each unique set of circumstances. Terminated employees often contact us advising that “they were the best employees” and they consistently received positive performance reviews. We often hear from terminated employees “how can my employer terminated me and then post a job opening for my former position right away?” These concerns are actually not relevant to the severance equation. As an employees can resign at any time for no reason, any employer can terminate an employee without cause at any time for no reason so long as it is not a discriminatory reason. As a result, your strong performance or the fact that your job may be replaced by another candidate, is not relevant in determining the severance calculation.

The more relevant factors in determining severance entitlements under the common law in Ontario, include but is not limited to: (i) the age of the employee at the date of dismissal – with employees of more advanced age typically entitled to greater notice periods; (ii) the duration of service in the employment, with longer-service employees entitled to more enhanced severance pay; (iii) the seniority or position of the employee, with greater notice periods being awarded to more senior employees with specialized positions; (iv) and the availability of similar employment. During COVID-19, the job market has frozen and it will be most challenging to secure a new job following a termination of employment, entitling the employee to greater severance pay.

The government has also introduced programs to protect workers and businesses that have been negatively impacted by the global pandemic. More details on these programs are provided below:

Benefits for Employers and Employees
Millions of employees have been terminated or temporarily laid-off due to business closures resulting from COVID-19. If you have been terminated from your employment as a result of COVID, you may be entitled to enhanced severance pay given the difficulty you are likely to confront in obtaining replacement employment in a timely manner given the economic downturn. You can contact our employment law firm for a free consultation to discuss your employment rights.

The government of Canada has introduced a number of programs to assist employers and employees that have suffered as a result of the COVID-19 pandemic.

Canada Emergency Response Benefit
The Canada Emergency Response Benefit (CERB) is available to workers (i.e., employees or independent contractors) who have lost their job on account of COVID-19. The Benefit is available to workers:

  • Residing in Canada, who are at least 15 years old;
  • Who have stopped working because of reasons related to COVID-19 
  • Who had employment and/or self-employment income of at least $5,000 in 2019 or in the 12 months prior to the date of their application; and,
  • Who have not quit their job voluntarily.

The amount of the CERB benefit is $2,000.00 per month for a period of four (4) months.

Canada Emergency Wage Subsidy
The Canada Emergency Wage Subsidy is available to employers whose revenues have decreased by at least 30% as a result of COVID-19. The benefit covers up to 75% of employee wages on the first $58,700 employees earn, or up to $847 per week. The program covers wages from March 15 to June 6, 2020 – and may be (but hopefully will not be required to be) extended should the pandemic continue on for longer than anticipated.

The purpose of the CEWS is to enable employer’s to re-hire workers or at least refrain from laying-off workers due to the economic downturn. To receive the wage subsidy, the employer must be eligible as defined by the benefit, which includes various types of entities (sole proprietor, partnership, corporation, non-profit, etc.) that has suffered an eligible revenue reduction (i.e., 15% revenue decline in March 2020 and 30.0% thereafter for April and May 2020).

Canada Commercial Rent Assistance Program
The Commercial Rent Assistance Program was introduced by the government of Canada to reduce rent for small businesses that have been impacted by COVID-19. The program will provide non-repayable loans to commercial property owners to cover 50.0% of three monthly rental payments for the months April, May, and June 2020. The loans will be forgiven if the property owner agrees to reduce the small business tenants rent by 75.0% during the loss period. The small business tenant will then cover the 25.0% remaining rent.

To be eligible to benefit from the program, eligible businesses will have to pay less than $50,000.00 in monthly rent and have seen their revenues decline by 70.0% as a result of COVID-19 during the three-month period.

If you are an employer or employee residing in Ontario and have questions regarding the governments new benefit programs to assist your business during the economic downturn causes by COVID-19 we would be happy to provide you with guidance. In addition, commercial landlords and small business tenants may require an understanding and interpretation of the Commercial Rent Assistance program to ensure it is implemented in accordance with the benefits parameters.

At Goldstein Law, we practice employment law, commercial leasing, and real estate litigation disputes. We are well-positioned and have the expertise to advise our clients on matters arising out of the COVID-19 crisis.

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