Phase 2 in Ontario & How CERB Benefits Might be Treated in Employment Lawsuits

Written on behalf of Peter McSherry

Before addressing Phase 2 reopenings and the question of how CERB benefits will impact employment awards in future lawsuits, first we will review a few updates affecting employees in Ontario as a result of COVID-19.

What’s new? Well quite a lot, actually.

For those people ending EI benefits, whether for regular EI or sickness, you are now able to qualify for payment of the Canada Emergency Response Benefit (CERB) of $400 a week beyond the initial cut off date of July 15. The program has been extended for a further period of 8 weeks. If your EI ends prior to this window closing, there is still time to apply.

Similarly, if your employment ended due to a COVID-19 issue, and you were without sufficient insurable hours to qualify for EI, the CERB is also available for the extended time period.

Keep in mind that you can earn up to $1,000 in any four week period and still claim the $2,000 payment. If you earn $1,001, the sum of the benefit will be zero. Count your earnings carefully.

The federal government has also announced that the border with the USA will remain closed until July 21. This is, of course, going both ways, and applies to non-essential travel. This is not a good moment to be working in a seasonal hotel in Ontario.

Ontario Phase 2

Most regions in Ontario, including Kitchener-Waterloo, entered stage 2 of reopening on Friday, June 12. Other areas of the province are scheduled to open today, June 19. Notably absent from this approved list are Toronto, Peel and Windsor-Essex. Infection numbers are most concentrated in these areas and will continue to be monitored before Phase 2 is permitted.

The full list of what can be opened appears at this link. The most significant of the businesses approved to open at this time include outdoor patios, swimming pools, limited use of shopping malls and outdoor team training facilities.

There is no set date for Phase 3, which likely will be the final state in the opening of Ontario’s economy, but it will be largely dependent upon the ongoing statistics of new cases. Further, there will most definitely be safety measures to observe even at this stage.

Keep your eye on the June 30 school closing date, as the need to attend to child care in the COVID-19 emergency period gives you job protection. If the school closing date is lifted, and one might expect that it would be natural to do so, then also gone is this related factor for job protection. This will likely be coordinated with the full opening of child care centres, but this remains speculation at this stage.

A statement on child care and other services such as public transit has been promised to be released in the immediate future. Stay tuned for further updates on how this will affect Ontario’s employees.

CERB Funds and Lawsuit Damages

In a civil claim or any form of employment claim, any funds received for EI during the employment period are not considered with respect to the overall sum you may win in the lawsuit. The theory is that it is a form of insurance which you, as an employee, buy into and there should be no benefit given to your past employer for insurance which you paid for. However, you are required to refund the amount of paid EI to the Government of Canada after an order for damages, less legal fees paid and not recovered. There is more to this issue than this summary, but this is good enough for now.

The question then becomes of what happens to the CERB benefits as this time period of eligibility becomes longer and longer. The maximum sum a person may collect will now be in the range of $9,600. It is taxable income, by the way. Should this sum be deducted from the claim and hence provide a benefit of the employer? There are arguments going both ways.

The employee will well argue that they “paid” for this benefit by their taxes and it is like insurance or resembles insurance. The employer will argue that this benefit would not be attainable without termination and should be deducted from the claim amount. A third option of course is that it will be treated as EI benefits, and kept in the claim, but repaid to the government after the fact.

The answer is that no one knows at the moment, and no one addressed this issue when the program was first formed. Given the flurry of new legislation in the last few months, it is very likely that an amendment to the existing law will address this question in the future. Again, stay tuned.

Every day brings new programs, amended laws and new regulations, as governments deal with this unprecedented situation. The rules are in constant flux. Stay alert and on top of the curve. We will update the all news as it develops in this space. In the meantime, if you have any questions or concerns relating to your employment due to COVID-19 or otherwise, contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.