The Government of Canada has a work sharing program that helps employers avoid lay-offs when there is a business slowdown beyond the control of the employer. The program is called “Work-Sharing” (“WS”) and involves an agreement between employers, employees and the Government of Canada. Under WS, a group of eligible employees (“WS Unit”) with similar job duties agree to reduce their hours by the same percentage and share the available work. The WS Unit must reduce its hours of work by at least 10% to 60% of its normal work hours. The reduction of hours can vary from week to week as long as the average reduction over the course of the agreement is from 10% to 60%. The employees receive Employment Insurance (“EI”) while participating in the WS.
Under pre-COVID-19 circumstances, employers must have been in year-round business in Canada for at least 2 years to be eligible for the WS. The length of a WS agreement must be at least 6 consecutive weeks long and may last up to a maximum of 26 consecutive weeks. It is possible to apply for an extension of up to 12 weeks. There is also a mandatory cooling off period on entering into another WS agreement immediately after the expiration of a prior WS agreement. Employers are also required to create a recovery plan to return WS Unit(s) to normal working hours by the end of the WS agreement.
In light of the COVID-19 pandemic, the Government of Canada has introduced the following temporary measures, effective March 15, 2020 to March 14, 2021:
- Employers may extend the maximum possible duration of a WS agreement from 38 weeks to 76 weeks.
- The mandatory cooling off period has been waived for employers who have already used the WS and therefore, eligible employers may immediately enter into a new agreement.
- The previous requirements for a recovery plan have been reduced to a single line of text in the application form.
- Businesses must be a year-round business in Canada for at least 1 year, as opposed to 2 years.
To be an eligible employer under the COVID-19 measures, the employer’s business must:
- be a year-round business in Canada for at least 1 year,
- be a private business or a publicly held company, or
- have at least 2 employees in the WS Unit.
To be eligible for WS, a business’ employees must:
- be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business;
- be eligible to receive EI benefits; and
- agree to reduce their normal working hours by the same percentage and to share the available work.
More information on the WS is available here.
The information contained in this article is for general information only and is not intended as legal advice or opinion. Please contact Goldman Sloan Nash & Haber LLP for specific advice or information regarding your specific circumstances.