**Trucking HR Canada does not accept any liability for legal decisions such as terminations and layoffs. Resources provided do not substitute for obtaining legal counsel and advice**
Many employers often consider employee layoffs during a business disruption.
It is important that a long-term view be balanced along with short-term focus on
Most trucking and logistics employers fall under Federal Jurisdiction and need to comply with the Canada Labour Code for temporary lay-offs.
Section 30 (1) of the Canada Labour Standards Regulations defines a temporary layoff as:
(a) the lay-off is a result of a strike or lockout;
(b) the term of the lay-off is 12 months or less and the lay-off is mandatory pursuant to a minimum work guarantee in a collective agreement;
(c) the term of the lay-off is three months or less;
(d) the term of the lay-off is more than three months and the employer
(i) notifies the employee in writing at or before the time of the lay-off that he will be recalled to work on a fixed date or within a fixed period neither of which shall be more than six months from the date of the lay-off, and
(ii) recalls the employee to his employment in accordance with subparagraph (i);
(e) the term of the lay-off is more than three months and
(i) the employee continues during the term of the lay-off to receive payments from his employer in an amount agreed on by the employee and his employer,
(ii) the employer continues to make payments for the benefit of the employee to a pension plan that is registered pursuant to the Pension Benefits Standards Act or under a group or employee insurance plan,
(iii) the employee receives supplementary unemployment benefits, or
(iv) the employee would be entitled to supplementary unemployment benefits but is disqualified from receiving them pursuant to the Employment Insurance Act; or
(f) the term of the lay-off is more than three months but not more than 12 months and the employee, throughout the term of the lay-off, maintains recall rights pursuant to a collective agreement.
Supplementary Unemployment Benefit (SUB Plan)
Employers may wish to provide Supplemental Unemployment Benefit (SUB) plan to increase their employees’ weekly earnings when they are unemployed due to a temporary stoppage of work, training, illness, injury or quarantine. Payments from SUB plans that are registered with Service Canada are not considered as earnings and are not deducted from EI benefits (pursuant to subsection 37(1) of the EI Regulations).
In order to ensure that these top-ups are not subject to employment insurance deductions, SUB plans should be registered with Service Canada. A link to Service Canada’s SUB plan registration requirements is here. SUB is a way to top up employees’ EI benefits so the top-up payments do not cause an EI deduction. Registration with Service Canada is required before SUB payments are made
- Registration process not too onerous, may be worth the time even for a few employees
- It is a short registration form and important to make sure it is complete and no employees are mentioned by name
- There also has to be a “SUB plan” attached to the form but it doesn’t have to be long; it can be as easy as copy-pasting the Service Canada template into a Word document and modifying as necessary
- If you are modifying the Service Canada template, note that “normal weekly earnings” can include things like OT, bonus or RRSP contributions; it is okay to substitute “base pay” if that is what you mean
- If there are multiple payroll numbers a different form must be filled out for each payroll, but they can all attach the same plan
- If there is a collective bargaining agreement for any of the employees covered by the SUB for a particular payroll, that would also have to be attached to the registration form for that payroll
- It is recommended to apply for registration before laying off so you can flag SUB payments in the ROE
- Once the plan is registered, there would be no EI deducted from the SUB payments. However other deductions (CPP, income tax, etc.) still apply.
Human Resources information and other resources on layoffs are included below.
- HR Reporter: 5 Key Questions on Vacation Time with COVID-19 - NEW
- MacLean’s: COVID-19 Layoff Tracker
- HR Reporter: Government Support and COVID-19
- Harvard Business Review: Layoffs that Don’t Break Your Company
- Legal – Nelligan Law: Complimentary 20 Minute Legal Consult for Ontario and Quebec
- McCarthy Tetrault: Managing Through COVID-19 – What to Think About When Considering Temporary Layoffs
- Stewart McKelvey: COVID-19 Information Bulletin
- BDO: COVID-19 Employment
Work-Sharing is available to employees eligible for Employment Insurance benefits and requires that employees agree to a reduced schedule of work. Employers and employees must apply for the program together (with union involvement, if applicable).
In response to the COVID-19 outbreak, the federal government has waived the mandatory 30-day waiting period for Work-Sharing agreements and has extended the number of weeks that benefits may be received from 38 weeks to 76 weeks. These special measures will remain in effect until March 14, 2021.