Howard Levitt: Order them back the office now or risk a constructive dismissal action later
With two recent important pronouncements on both sides of the border, employers are worried about whether they can keep up with the ever-evolving issues surrounding COVID-19. Today and next Saturday, I will answer the many employment law questions swirling about.
But first, those proclamations.
Prime Minister Justin Trudeau announced that all federal government employees, including Crown corporations, must be vaccinated in order to retain their jobs, even if they work from home. This is revelatory since, absent legislation, employers could never compel employees — who they had permitted to work from home — to be vaccinated.
South of the border, Ken Griffin, founder of hedge fund Citadel LLC, publicly pronounced: “It is time to get employees back to work because working from home prevents the mentorship, interactions, managerial experiences and exchange of ideas allowing U.S. businesses to prosper.”
He noted that, for younger employees, “the loss of early career development opportunities is going to cost us dearly over the decades to come.”
But he cautioned that “if you talk to other CEOs, they live in fear of how we will be publicly persecuted for delivering this straightforward message: It is time to go back to work.”
As he put it: “We need it for our government workers. We need it for corporate leaders. We, as a country, it’s time to get back at it,” asserting that remote work was damaging America’s competitiveness relative to Chinese workers. He called for U.S. President Joe Biden to deliver that message from the top.
Below are my recommendations to some of the questions that are perplexing both employers and staff.
What is true south of the border is equally so here. Most employers are anxious to get their employees back into the offices. A study on the productivity of the Canadian workforce by enterprise firm Aternity Inc. found that employees who work from home are 22 per cent less productive per hour worked relative to those at the office and, more alarmingly, found that productivity gap increases the longer employees remain home.
This desire to get employees back to the office is juxtaposed with a different competing fear, that ordering employees back to work will result in many resigning at a time when it is already difficult to recruit and retain for most positions. The majority of studies have shown that employees working from home wish to continue to do so, at least part of the time, and a significant percentage of the workforce is already considering changing jobs. Therefore, ordering employees back to the office against their will will result in many employees resigning, in an era already called The Great Resignation.
Some employees work as, or more, effectively remotely. Employers have the legal option of permitting that for those who do. Companies can also legally discriminate by permitting some employees to work from home and not others. That selection can be based on productivity, the type of work, or any criterion that they wish, even arbitrarily. Employers will have to conduct a delicate balancing act in deciding who will be permitted to continue remote work as our offices reopen.
Employers have the unequivocal right to force employees back to work and to declare them to have abandoned their employment without compensation if they refuse.
Q: Is there a risk from permitting continued remote work?
A: I issue a cautionary note. If you permit employees to work from home much longer than practically and legally necessary, it will become a term of their employment. Ordering them back to work after that will constitute a constructive dismissal. We are reaching that tipping point now.
I recommend that any employer who wishes to permit employees to work from home for much longer have these employees sign contracts agreeing that they can be recalled to the workplace upon one month’s notice. If they refuse to sign, order them back now or risk a constructive dismissal action later.
Q: Who pays the expenses of remote working?
A: I am often asked whether employers are required to pay the inherent expenses of employees working from home. There is no such requirement.
Q: Should you have a formal vaccination policy?
A: Every employer should have a vaccination policy, distributed to all employees, to ensure that everyone understands the rules. Such a policy provides direction to employees and protection to the employer in the event of litigation.
I am constantly asked by clients what that policy should contain. The answer is simple. Whatever the employer wishes it to. Subject to compliance with public health guidelines, there is tremendous flexibility in potential vaccination policies.
Whether you should require mandatory vaccinations and for what groups is a function of the employer’s corporate culture and what makes most sense in its particular context.
Q: Should you require mandatory vaccinations?
A: A mandatory vaccination policy will invariably result in some employees departing. Concomitantly, not having such a policy will upset those vaccinated employees who do not wish to work near the unvaccinated. That is part of the balancing employers must consider.
COVID-19 has become a pandemic of the unvaccinated. The vast majority of employees contracting COVID-19 and, in particular, filling our hospitals are unvaccinated, particularly telling since only about 20 per cent of Canadians are unvaccinated.
A compelling argument in favour of compulsory vaccinations for those employees who work closely with co-workers, customers or members of the public is that if someone contracts COVID-19 in that workplace, the employer cannot be successfully sued for negligence.
Given that most governments and chief medical officers across Canada now support mandatory vaccination, it will not be long before a court may find a ‘duty of care’ in workplaces requiring mandatory vaccinations and that employers who do not require it are, prima facia, negligent if someone contracts COVID-19 in that workplace.
If the result is death or permanent disability, the legal lawsuit could be in the millions of dollars. Since litigation is determined based on the law at the time a matter reaches court, this — still future — duty of care may well apply to a company’s actions today. That further militates in favour of mandatory vaccinations.
Got a question about employment law during COVID-19? Write to Howard at levitt@levittllp.com.
Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada.
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TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
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Yuri Kageyama is on X:
The Canadian Press. All rights reserved.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
Companies in this story: (TSX:SHOP)
The Canadian Press. All rights reserved.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
Companies in this story: (TSX:REI.UN)
The Canadian Press. All rights reserved.
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