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This article was originally published by The Lawyer’s Daily, part of LexisNexis Canada Inc.
With the spread of COVID-19 picking up speed, prompting the World Health Organization to declare it a pandemic, it is beginning to have a ripple effect on global industry and markets. Supply chains are being disrupted, travel restrictions are being imposed by growing numbers of countries and containment measures are being introduced.
But while the number of cases in Canada is still relatively low, employers should nevertheless begin to take steps to deal with the main legal issues and risk management measures that will inevitably surface as the world comes to grip with COVID-19, advised a team of lawyers with Norton Rose Fulbright Canada LLP in a recent webinar. “It’s becoming clear that we can expect disruption for some months to come,” noted Walied Soliman, the firm’s Canadian chair.
Managing workplace issues is top of mind for Canadian employers. In all jurisdictions across Canada, employers have an obligation to take “all reasonable steps” to provide a safe workplace for employees, stressed Anne Gallop, a Toronto employment lawyer with Norton Rose Fulbright.
Employers can restrict business travel, but cannot curb personal travel. They can suggest or even request employees to avoid certain travel destinations. Employers can also ask employees to keep them abreast of planned travel destinations. Employers can also require employees not to show up at work after travelling, so long as it is a reasonable request. If an employee returned from a place on Health Canada’s advisory list, it is “likely reasonable” to require them not go to the workplace for two weeks, said Gallop. But if an employer unreasonably required an employee to stay away from the workplace when there was no rational or “supportable” reason, then the employee would have a claim for the monies they would have otherwise received had they been able to go to work for the two-week period, added Gallop.
But the big question employers have is whether they are obliged to pay employees who are required to self-isolate, either because of a Health Canada directive or because the employer itself is telling them to stay at home. It depends, said Gallop.
The answer may lie in employment agreements. Employers should begin by examining written employment agreements in the case of non-union employees, and collective agreements in a unionized setting. Many employers provide paid sick leave, and it may be that employees are entitled to stay at home with pay. But not every sick leave plan is the same so looking at the actual terms of the plan is key, said Gallop. In cases where employees have insured sick leave plans, it is likely insurers who will be the ones making the decision as to whether employees will be paid, added Gallop.
When no written employment agreements exist or if the employment or collective agreements do not address such situations, employers are advised to look at their written policies and past practices.
“If you have given paid leave before in a situation where the employee is able and willing to work but you as an employer have not allowed them to return to work, you will want to consider whether your refusal to pay the employee is discriminatory, contrary to human rights legislation,” said Gallop.
In situations where employees are not entitled to pay for missing work, Gallup added that employers can explore other alternatives such as providing an advance on vacation pay or an advance on wages. Moreover, the federal government announced that it will be waiving the one-week waiting period for unemployment insurance benefits for sick leave.
Employers also have to keep in mind human rights legislation when they are considering what to do protect employees from COVID-19 in the workplace. Employers “really” need to make sure that the practices, processes and restrictions they put in place are not unintentionally discriminating against employees on the basis of place of origin, ethnicity or disability. What’s more, employers must ensure that employees are not being mistreated by colleagues or visitors to the workplace because of where they come from, said Gallop. Employers also need to be aware of the notion of disability. While human rights tribunals have held that temporary illnesses such as the flu are not a disability and are therefore not subject to human rights protection, what is protected is the perception of disability.
“The argument would likely be that an employer assumed the employee is disabled because of where they have travelled without any legitimate and verified information,” explained Gallop.
Publicly-traded companies, besides have to deal with workplace issues, are also wrestling over how and what to disclose regarding risks related to the global outbreak of COVID-19, said Trevor Zeyl, a corporate and securities lawyer with Norton Rose Fulbright. They are also concerned about the impact the crisis will have on annual general meetings.
Under Canadian securities laws, Canadian issuers are required to provide risk disclosure in their shareholder materials and offering documents that would be likely to influence an investor’s decision to purchase securities of the company, said Zeyl. Issuers are also required to provide risk disclosure in their annual and interim management discussion and analysis filings. Issuers also have an obligation to update any previously disclosed forward-looking information in the management discussion and analysis section in quarterly and annual filings (MD&A), and these updates must be provided in subsequent MD&A filings. Last but not least, issuers are also compelled to make timely disclosure of material changes, that is changes in the business operations or capital of an issuer that would reasonably be expected to have a significant effect on a market price or value of any of the securities of an issuer.
“If coronavirus, and the side effects arising from it, result in a material change in respect of issuer’s business operations or capital, whether that be a material, a disruption in a material supply chain, the labour shortage or a significant drop in sales, an issuer is required to immediately [issue a] press release [about] such material change to ensure that the market is apprised of the situation,” explained Zeyl.
The Canadian Securities Administrators has yet to issue any COVID-19-related disclosure guidance but the Investment Industry Regulatory Organization of Canada (IIROC) recently stated that it “recognizes that some level of regulatory flexibility may be required to enable its members to serve investors and maintain market stability.”
Annual general meetings are proving to be a conundrum for publicly traded companies. Zeyl suggests that they use a hybrid approach, one that allows for in-person attendance and online participation.