Howard Levitt: Order them back the office now or risk a constructive dismissal action later
Author of the article:
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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Netflix (NFLX) stock slid as much as 9.6% Friday after the company gave a second quarter revenue forecast that missed estimates and announced it would stop reporting quarterly subscriber metrics closely watched by Wall Street.
On Thursday, Netflix guided to second quarter revenue of $9.49 billion, a miss compared to consensus estimates of $9.51 billion.
The company said it will stop reporting quarterly membership numbers starting next year, along with average revenue per member, or ARM.
“As we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact,” the company said.
Netflix reported first quarter earnings that beat across the board on Thursday, with another 9 million-plus subscribers added in the quarter.
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Subscriber additions of 9.3 million beat expectations of 4.8 million and followed the 13 million net additions the streamer added in the fourth quarter. The company added 1.7 million paying users in Q1 2023.
Revenue beat Bloomberg consensus estimates of $9.27 billion to hit $9.37 billion in the quarter, an increase of 14.8% compared to the same period last year as the streamer leaned on revenue initiatives like its crackdown on password-sharing and ad-supported tier, in addition to the recent price hikes on certain subscription plans.
Netflix’s stock has been on a tear in recent months, with shares currently trading near the high end of its 52-week range. Wall Street analysts had warned that high expectations heading into the print could serve as an inherent risk to the stock price.
Earnings per share (EPS) beat estimates in the quarter, with the company reporting EPS of $5.28, well above consensus expectations of $4.52 and nearly double the $2.88 EPS figure it reported in the year-ago period. Netflix guided to second quarter EPS of $4.68, ahead of consensus calls for $4.54.
Profitability metrics also came in strong, with operating margins sitting at 28.1% for the first quarter compared to 21% in the same period last year.
The company previously guided to full-year 2024 operating margins of 24% after the metric grew to 21% from 18% in 2023. Netflix expects margins to tick down slightly in Q2 to 26.6%.
Free cash flow came in at $2.14 billion in the quarter, above consensus calls of $1.9 billion.
Meanwhile, ARM ticked up 1% year over year — matching the fourth quarter results. Wall Street analysts expect ARM to pick up later this year as both the ad-tier impact and price hike effects take hold.
On the ads front, ad-tier memberships increased 65% quarter over quarter after rising nearly 70% sequentially in Q3 2023 and Q4 2023. The ads plan now accounts for over 40% of all Netflix sign-ups in the markets it’s offered in.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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Oil prices gave up nearly all of early Friday’s gains after an Iranian official told Reuters that there hadn’t been a missile attack against Iran.
Oil surged by as much as $3 per barrel in Asian trade early on Friday after a U.S. official told ABC News today that Israel launched missile strikes against Iran in the early morning hours today. After briefly spiking to above $90 per barrel early on Friday in Asian trade, Brent fell back to $87.10 per barrel in the morning in Europe.
The news was later confirmed by Iranian media, which said the country’s air defense system took down three drones over the city of Isfahan, according to Al Jazeera. Flights to three cities including Tehran and Isfahan were suspended, Iranian media also reported.
Israel’s retaliation for Iran’s missile strikes last week was seen by most as a guarantee of escalation of the Middle East conflict since Iran had warned Tel Aviv that if it retaliates, so will Tehran in its turn and that retaliation would be on a greater scale than the missile strikes from last week. These developments were naturally seen as strongly bullish for oil prices.
However, hours after unconfirmed reports of an Israeli attack first emerged, Reuters quoted an Iranian official as saying that there was no missile strike carried out against Iran. The explosions that were heard in the large Iranian city of Isfahan were the result of the activation of the air defense systems of Iran, the official told Reuters.
Overall, Iran appears to downplay the event, with most official comments and news reports not mentioning Israel, Reuters notes.
The International Atomic Energy Agency (IAEA) said that “there is no damage to Iran’s nuclear sites,” confirming Iranian reports on the matter.
The Isfahan province is home to Iran’s nuclear site for uranium enrichment.
“Brent briefly soared back above $90 before reversing lower after Iranian media downplayed a retaliatory strike by Israel,” Saxo Bank said in a Friday note.
The $5 a barrel trading range in oil prices over the past week has been driven by traders attempting to “quantify the level of risk premium needed to reflect heightened tensions but with no impact on supply,” the bank said, adding “Expect prices to bid ahead of the weekend.”
At the time of writing Brent was trading at $87.34 and WTI at $83.14.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Premier David Eby is warning real estate investors and speculators that his government is tilting the rules toward families seeking homes as it tightens the rules on short-term rentals.
Eby said Thursday that the rule changes on May 1 will limit short-term rental units to within the principal home of a host, but the move isn’t a ban on platforms such as Airbnb if they aren’t used to create de facto hotels from B.C.’s housing stock.
“If there’s a major event [such as a] Taylor Swift concert, a FIFA-like event and somebody wants to rent out their primary residence and go away for the weekend to avoid the crush of the crowds, they can still do that,” Eby said.
The changes were announced by the government last spring, giving those who own short-term rentals a year to conform.
Eby said the changes will allow both the province and local governments to crack down on speculators.
“If you’re flipping homes, if you’re buying places to do short-term rental, if you’re buying a home to leave it vacant, we have consistently, publicly, repeatedly sent the message: Do not compete with families and individuals that are looking for a place to live with your investment dollars.”
Eby made his comments as the province announced new figures gathered in March that showed more than 19,000 entire homes being listed as short-term rentals.
Housing Minister Ravi Kahlon said the new rules also require short-term rental platforms such as Airbnb to share listed property data with the province and local governments.
He said they expect a significant amount of the homes listed on short-term sites to be back in the long-term rental pool.
“Our view is even if half of those units were to come back onto the market, that is substantial,” Kahlon said. “The cost that it takes to build new housing, when you can get even half of the 19,000 back on the market, that’ll make a substantial difference in our communities.”
He said previous efforts to limit short-term rentals are increasing housing supply in some places.
“We’re seeing, already, in many communities that action happening,” Kahlon said. “We have heard many stories of people finding rentals now because of opportunities when it comes to short-term rentals coming onto the market.”
The new principal residence requirement for short-term rentals will allow local governments to request that a platform remove listings that don’t display a valid business licence.
Valid short-term rental hosts will also be required to display a business licence number on their listings if a licence is required by local government.
The new rules will apply to more than 60 B.C. communities, and Kahlon said a compliance enforcement unit will be phased in to help municipalities deal with rule violations.
Much of the monitoring and enforcement, however, will be conducted online through a new rental data portal that will allow local governments to track and request removal of listings from platforms.
“With this new digital portal, local governments will be able to upload, within moments, listings that they believe are operating illegally within their community,” Kahlon said.
The platform will have five days to remove listings that aren’t following the rules, and if they don’t, they will be fined, he said, noting there’s an up-to-$10,000-a-day-per-listing fine for platforms that don’t co-operate.
“We believe that’s enough of a deterrent for the platforms to co-operate with local governments,” said Kahlon
A website launched Thursday for hosts will allow them to get information about their requirements from the province and their municipality, and their responsibility to notify anyone that’s booked.
“Hosts and platforms have a responsibility to notify anyone that’s booking of all the changes that have been coming,” said Kahlon. “They’ve been notified about this since September or October when the legislation has come in, and they’ve had plenty of time to set up their policies to do that.”
The rules do include some exceptions, including some strata hotels and motels operating before last December being exempt if certain criteria are met.
Eby said the overall message to property investors looking for short-term gains is clear: Build homes that people need and government will do all it can to help expedite the process.
“But if you are standing neck and neck with a family that’s looking for a place to live, and you’re trying to do a speculative investment, [while] they’re looking for a place to live, we are going to tilt the deck every single time towards that family,” Eby said. “And we’re gonna keep doing it.”
Eby also said a positive side-effect of short-term rental regulation has been the re-emergence of hotel construction, with 1,400 rooms “in the development pipeline” in Vancouver.
“Those investors in those hotel rooms weren’t able to make the decision to proceed,” Eby said, citing the previous competition from short-term rentals. “Very clearly, with these regulations in place, there will be visitors to stay in hotel rooms, there will be a market for hotel rooms and they’re making the decision to proceed. This is very good news.”
Victoria-based Property Rights B.C. has filed a lawsuit against the province and city of Victoria to fight the new regulatory system.
It maintains the province overstepped its authority and its lawsuit is focused on preserving the rights to own and operate short-term vacation rentals. The organization is also seeking a delay in enforcement.
Asked about the lawsuit, Eby said he can’t comment on a matter that’s before the courts, “but what I can say is we’re very confident in the legal authority of the province to regulate the housing sector in this way and we’ll make the arguments that are needed in court to address that.”
More communities initially exempt from the province’s new regulations have opted in, including Gabriola Island, Mill Bay/Malahat, Cobble Hill, Cowichan Station/Sahtlam/Glenora, Cowichan Lake South/Skutz Falls, Saltair/Gulf Islands and North Oyster/Diamond. Tofino previously announced it would opt in.
Municipalities with fewer than 10,000 people, resort communities and regional districts are exempt from a requirement restricting short-term rentals to principal residences and either a secondary suite or laneway home/garden suite.
— With files from Carla Wilson and Cindy Harnett
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