On September 28, 2020, the Federal Government announced it would be extending international travel restrictions to October 31, 2020, requiring individuals entering Canada to quarantine for a 14-day period. Understandably, this has devastated the travel/tourism industry resulting in mass lay-offs and terminations.

Given the spike in COVID-19 cases, the possibility of another extension of the travel restrictions is becoming ever more likely leading to further lay-offs/terminations and possibly employers going out of business. With this in mind, it is important to understand what rights employees may have during a black swan event such as the COVID-19 pandemic.

In the event of a termination “without cause” due to the imposed travel restrictions, employees are entitled to their statutory minimum entitlements. In some cases, they may even be entitled to common law reasonable notice of their termination commensurate of their age, length of service, total compensation package, and nature/seniority of their position. Other relevant factors should also be taken into consideration, such as the economic climate or the possible claim of Frustration, all of which we had previously discussed here.

The question remains, however, what, if anything, are employees entitled to in the event their employer cannot survive the pandemic? Current provincial and federal legislation affords employees a degree of protection for unpaid wages, holding the company’s Directors personally liable for up to 6 month’s of “debts” provided certain conditions are met. The courts have interpreted “debts” to include unpaid wages, vacation pay, reasonable travel/out-of-pocket expenses, and employment benefits accrued in exchange for services previously provided.

Unfortunately, the same protection is not afforded to severance entitlement. In the event an employer becomes insolvent/bankrupt, then any post-termination entitlements, such as notice, would cease to exist along with the company. Alternatively, the employee may become an unsecured creditor with the likelihood of recovery non-existent.

To better understand your entitlements and explore the viability of a claim during these unprecedented times, we encourage employees to seek legal advice. We at Whitten & Lublin are happy to provide insight and advice into your specific circumstances. If you’re looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.

Author: Athan Makrinos

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