Employment Insurance Reforms

Written by on May 9, 2013 in Employment Law Blog
Government of Canada

The federal government’s reforms to employment insurance (EI) impact Canadians across the country.

People who frequently claim EI are now expected to accept a job offer for which they are qualified, if the job is within 100 kilometres of their home and if the pay is at least 70 per cent of their previous salary. Canadians will not be required to accept wages that would result in receiving less income than they received while collecting EI. All work hours, including part-time and shift work, are considered suitable. Personal circumstances must permit the worker to perform the required work and conditions must be safe.

To qualify for EI, Canadians must also prove they are actively seeking work and keep a record of their efforts. They must prepare a résumé, search and apply for jobs, attend interviews and network.

The changes to EI pose challenges for many, especially seasonal workers who depend on EI to support themselves and their families during off-seasons.

The government estimates the changes will save $12.5 million this year and $33 million next year.

Impact on Employers

Employers can expect an increase in the number of employees searching for work. Employees will likely be more flexible in the type of job, the work location and the pay they are willing to accept. The anticipated demand for jobs and the additional supply of workers may cause employers to rethink their pay schedules. As some employees will no doubt feel pushed into accepting work they would not otherwise agree to, short term mentality may exist with turnover amongst these employees being higher. This makes it is all the more important for employers to have employment contracts with tight clauses that outline company expectations and restrict certain activities that could potentially cause the company damage. As notice of termination is greater for short term employees on a year by year basis, with some Judges ordering 3 months notice as a starting point, it is critical that employment contracts limit notice in the event of a termination of that employee becomes necessary.

Impact on Employees

If an employee is terminated and has not signed an employment contract or signed one after verbally agreeing to terms of employment or after actually commencing employment, it is possible that the employment contract and the provisions contained in it, including a termination clause, may not be valid. In that situation, the employee’s notice entitlement may not be limited and the employee would be entitled to common law notice. Given the new EI rules, an employee’s likelihood of re-employment is greater. Should an employee not fulfill their search obligations and lose or be denied EI, the employee may not fulfill their obligation to lessen damages, which could negatively impact on the termination notice the employee receives or entitled to receive.

For more information, visit Service Canada summary page of our website.

Minken Employment Lawyers is your Canadian source for expert Employment Law advice and advocacy on today’s employment law issues. Whether you are an employer or employee, we can help. Contact us to see how.

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