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Bulletin | Covid-19

The Federal Work-Sharing Program: An Alternative to Layoffs

Fasken
Reading Time 2 minute read
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Labour, Employment & Human Rights Bulletin

As we outlined in our Workforce Planning Bulletin, the federal Work-Sharing program can offer relief to employers who have been financially impacted by COVID-19. This program can help employers who have experienced a slow-down in business, but have not closed completely.

The Work-Sharing program is an adjustment program. It helps employers avoid layoffs when there is a temporary reduction in the normal level of business activity that is beyond the control of the employer. It is a three-party agreement between the employer, the employees and Service Canada.

Work-Sharing allows employees to work reduced hours and share work equally between one another. At least two employees must participate in the program, and those who do are eligible to receive EI benefits to supplement their lost income. Employees who participate in the program who do the same/similar work will form a "Work-Sharing unit". Employees in a Work-Sharing unit can have their hours reduced by up to 60%. 

Application and Eligibility

Employers must apply to the Work-Sharing program at least thirty (30) days in advance of the requested start date, by submitting:

  • the application;
  • the attachment to the application (in PDF or Excel); and
  • a recovery plan, which must demonstrate that the employer will implement activities during the period of the Work-Sharing agreement to alleviate the work shortage in order to return the Work-Sharing unit(s) to normal working hours by the end of the agreement.

To be eligible for a Work-Sharing agreement, an employer must:

  • have been in business in Canada year-round for at least two years;
  • be a private business, a publicly-held company or a not-for-profit;
  • demonstrate that the shortage of work is temporary and beyond its control, and is not a cyclical slowdown; and
  • demonstrate a recent decrease in business activity of at least 10%.

Employees eligible to participate are individuals who:

  • are "core" employees, meaning they are permanent full-time or part-time employees who are required to carry out the everyday functions of normal business activity, and not seasonal or casual employees/students;
  • are eligible to receive EI benefits; and
  • agree to a reduction in their normal working hours in order to share work.

Work-Sharing agreements must be in place for a minimum of six weeks, and can be in place for a maximum of 38 weeks, or a maximum of 76 weeks if the business was specifically impacted by COVID-19. Further information on the Work-Sharing program can be found here: Work-Sharing – Overview .

Work-sharing may be a helpful tool  for employers to handle a slowdown caused by COVID-19. If you are interested in applying for the Work-Sharing program, please contact the Fasken LEHR team for assistance in putting your application together.

 

The assistance of Jessica Nolan is gratefully acknowledged.

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