Q&A: COVID-19 Workplaces in Small and Midsize Businesses
This week, I got the chance to interview Human Resources Professional and licensed Paralegal Samina Sial. I met Samina through the Coach and Advisor Network (CAN) of the Law Society of Ontario (LSO), and found out that she focuses on an area of law that is very close to my heart, employment relations. We had a very productive conversation and she helped me understand, generally, the impact of SARS-CoV-2 (a.k.a. Coronavirus or COVID-19) in Small and Midsize Enterprises (SMEs)’ workforces. Here are some of the questions we explored.
Q: Why is COVID-19 causing substantial economic slowdown that impacts SMEs - which seems to be worse than the 2008 financial crisis, and didn’t happen with SARS-CoV-1, MERS or H1N1?
A: COVID-19 has spread rapidly throughout the globe at an alarming rate because it is so highly contagious. To manage the spread, the Federal Government and provinces across Canada are implementing strict control measures, such as social distancing, by shutting down non-essential businesses.
Workplaces usually require social proximity, not distancing. For example, hairdressers, makeup artist, dentists, wedding planners, cleaning services, local restaurants, pubs, contractors, tattoo artists, and other similar trades would not be able to perform their job without touching their customers or being in the same environment as their customers for long periods of time. Social proximity in workplaces is then a public health challenge when it comes down to reducing or stopping the spread of COVID-19.
Countries around the world are using the same social distancing policy to slow down the spread of this virus with a similar impact in every location.
The evident consequence is that SMEs have been significantly impacted due to mandated closures, as most do not have the cashflow to endure social distancing, and they seem to have no immediate choice but to layoff their employees.
Q: How do we measure or what’s an SME?
A: There is no one standard in Canada that we can use to classify SMEs. I like to use Statistics Canada’s. It refers to SMEs based on the number of employees:
- Small businesses are those with 99 employees or less.
- Medium size businesses are those with 100 to 499 employees.
Q: Must every SME close during the Declared Emergency?
A: No, not every business is required to close during an emergency. Essential businesses listed by each province are required to stay open. In Ontario this list includes police, firefighters, liquor stores, law offices, and others.
Non-essential businesses, meaning every other business not listed as essential businesses, may continue to operate remotely via e-commerce.
Q: What is an essential business?
A: An essential business are businesses that provide individuals and other essential businesses or essential services with the support, supplies, systems or services they need, including processing, packaging, distribution, delivery and maintenance necessary to operate during the Declared Emergency.
Q: What is a Declared Emergency in the context of COVID-19?
A: The Ontario Government literally declared an emergency under s. 7.0.1 (1) of the Emergency Management and Civil Protection Act. This gives the Ontario Government power to make orders that impact businesses and lives substantially. There was a need for immediate action to prevent, protect, reduce or mitigate health risks to the general population, that could result in serious harm.
COVID-19 spreads rapidly and widely, and its potential harm includes death, although most individuals who get sick from the virus, recover from it within weeks. There seemed to be no other choice but to declare this emergency based on the public health consequences of COVID-19.
Q: Can a non-essential business have an essential service, goods or a mix of both, that makes it an essential business?
A: Yes, a non-essential business can have something that would be considered essential. For example, during shutdown, a Dental Office may have to provide urgent dental services to a patient.
Q: Does an essential business have the responsibility to protect its employees from COVID-19?
A: Yes. All businesses are required to protect its employees from health and safety hazards, which includes COVID-19. The Occupational Health & Safety Act applies to all workplaces regulated by Ontario’s laws and orders employers to take every reasonable precaution necessary to protect its workers.
For example, operating essential businesses should provide employees with information on hand hygiene, personal protective equipment, scheduling employees to work alone versus in groups, and other measures. But it really comes down to the size and nature of the business and its exposure to hazards, which will drive the strategy to control infectious diseases in the workplace.
Q: What can an essential business do if its operations slowdown and cannot maintain its full workforce?
A: There is hope. At the moment, there are a number of options available to businesses.
Firstly, the Federal Government has provided several programs for businesses to help them through social distancing, such as the Canada Emergency Wage Subsidy, the Canada Emergency Business Account, and others. Businesses also have the option to apply for the Work-Sharing Program.
And, after assessing all this, under certain circumstances and meeting legal obligations, SMEs have the option to temporarily layoff employees or implement wage reductions.
Q: What can non-essential business do if they have to close operations for a while?
A: Businesses can offer to top-up employment insurance payments or offer leave of absences based on the Declared Emergency. An employer may temporarily layoff its employees for 13 weeks in 20 consecutive weeks or up to 35 weeks as long as they meet the Employment Standards Act's criteria.
I’m concerned about how employers are laying off workers and employees, because regardless of COVID-19 they will be exposed to legal liability for lack of compliance with minimum standards, which could place employers at risk of being sued for constructive dismissal.
Q: What can SMEs do to mitigate legal liability when making decisions about reducing hours of work, layoffs, terminations, and other measures that they may take?
A: I would say, make legally informed decisions and document those decisions.
There are a number of new programs the Federal Government put in place to mitigate the impact of social distancing and provincially mandated business closures, for example the Canada Emergency Wage Subsidy, subject to meeting its requirements, which may change over time.
Employers should gather all relevant information, build a strategy to face the impact of COVID-19, and document the steps taken to materialize that strategy.
The relevant information must include employers understanding the law around temporary layoffs, constructive dismissals and terminations. Employers should be aware of these risks and avoid facing future claims of wrongful terminations.
Employers are also required to take precautions in the workplace to reduce the risk of transmission of COVID-19. Perhaps employers could implement a robust policy for managing infectious diseases in the workplace.
Q: What can SMEs do to help their employees and workers with reduced hours of work, layoffs or termination?
A: SMEs should regularly communicate with its employees. They are fully aware of the economic implications of COVID-19 and keeping employees well informed seems to be in the best interest of the business.
SMEs may want to support their terminated employees by providing timely documentation for employment insurance, namely, Record of Employment. They should also provide reference letters.
Q: Is there anything else that you would like to add?
A: SMEs must understand that these are unprecedented circumstances, and every business is different, and every workplace is different. By understanding what those differences are, the business would be in a better position to select the best tools to control legal liability during COVID-19.
For those non-essential businesses get your employment relations legal framework ready now, so you can come roaring back to a more flexible social distancing and the post-COVID-19 economic growth.
Antonio F. Urdaneta is a marathon runner, a workplace lawyer, investigator, compliance coach, and thought leader at Workplace Legal. He uses coaching skills and tools to inform, advice and represent workplaces in digital and physical legal challenges and endeavours.
For health guidance/information about the Coronavirus please visit Government of Canada site.