![Employment-labour-labor-employees-office-people](https://www.nortonrosefulbright.com/-/media/images/nrf/hero/employment-labout-labor-employees-office-people.jpg?w=265&revision=2d532d2a-0a18-447f-b8ba-ddc39a303d6b&revision=5249794100197387904&hash=AA58526DF41A242912D8B317F9C63CDB)
Publication
Supreme Court of Canada rules managers cannot unionize in Quebec
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
Canada | Publication | April 24, 2020 - 5 PM ET
Although many businesses are affected by the current pandemic, not all are affected in the same way and each tenant request for financial relief under a lease should be considered in the context of the landlord’s and tenant’s specific situations:
Where the rent deferral concept is acceptable to the landlord and the tenant, the parties should also address when such deferred rent will be payable: periodic installments over a particular span of time or as a lump sum.
GST CAUTION: Remember that GST on commercial rent is payable by the tenant, and collectible by the landlord, on the earlier of the day the rent is due and the day the rent is paid. Therefore, when structuring a rent deferral arrangement, consider changing the date rent is due under the lease so that deferral applies to the tenant’s obligation to pay GST on the rent as well as the rent itself. To defer the landlord’s obligation to remit the GST, it is necessary to change the rent due date; however the landlord will want to be careful that such a change does not result in giving up other important rights it may have under the lease.
If the landlord and the tenant agree to modify rent payment obligations, the parties need to consider whether the lease requires such amendments to be in writing and signed by both parties as is typically the case. The tenant wants to ensure the relief provisions will be enforceable immediately and the landlord wants to ensure it is not obliged to remit GST on rent that has been deferred, and the payment obligations at a later date are also enforceable at such later date.
Each of the landlord and the tenant has ongoing business liabilities including payroll, benefits, equipment rental payments, secured/unsecured debt financing, taxes and insurance payments to name a few. To date, government financial subsidy programs have been announced, certain governmental authorities have implemented payment deferral programs such as property tax deferrals, and financial institutions are considering requests for loan payment deferrals or alternate loan payment arrangements.
Of particular significance for commercial property owners, the federal government has announced its intention to introduce the Canada Emergency Commercial Rent Assistance program for small businesses. This program will seek to provide loans, including forgivable loans, to commercial property owners who in turn will lower or forgive rent payable by small business tenants for April (retroactive), May and June. Please click here for more information regarding government relief programs.
Leases will typically define specific events of default and set out remedy provisions if such an event of default occurs; however many of these lease provisions are limited to tenant defaults. These provisions must be read in conjunction with any force majeure clauses to determine consequences.
Tenants must consider potential consequences of their actions or omissions to avoid any unintentional breach or default. Similarly, leases will commonly address waiver of breaches or non-compliance and landlords must be aware that certain communications and actions may be deemed to be a waiver of their strict legal rights under the lease unless a contrary intention is documented and communicated to tenants.
Note that if a right has been waived, the party that waived such right can retract its waiver by giving reasonable notice to the other party setting out its intention to insist upon the strict enforcement of its legal rights and providing the other party with a reasonable period of time to cure the breach.
Even if a landlord has terminated a lease for an event of default, courts have discretion to grant the tenant relief from forfeiture if such relief would be fair and just in the circumstances. Courts will consider all facts surrounding any termination of lease, including the conduct of the parties, the history of the relationship between the parties and the gravity of the breaches. Keep in mind that courts across the country are also affected and have limited matters that will be heard to emergencies.
Consider whether or not other rights granted to the tenant in the lease may be affected by a tenant event of default occurring, such as a lease renewal or extension, a right of first refusal or a right of first offer.
Does the landlord’s or the tenant’s insurance policy address force majeure and if so, does the current pandemic constitute a force majeure event? Specifically, is rental interruption coverage available to the landlord? Is business interruption coverage available to the tenant?
Publication
On April 19, 2024, the Supreme Court of Canada handed down the long-awaited decision on the unionization of managers.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023