Digest of Benefit Entitlement Principles Chapter 25 - Section 1

25.1.0 Authority

Work-Sharing is an adjustment program that operates under the authority of section 24 of the Employment Insurance Act (EIA), and sections 42 through 49 of the Employment Insurance Regulations (EIR). These regulations are specific in establishing and managing Work-Sharing agreements and the payment of Work-Sharing benefits.

In situations not specifically covered by the Work-Sharing provisions, the relevant sections of the EIA apply in the normal way. For example, there are no Work-Sharing provisions in the Act or Regulations with respect to claimants who are out of Canada. Therefore, the provisions of subsection 37(b) of the EIA and section 55 of the EIR apply to Work-Sharing participants, in the same way as for any other claimant.

25.1.1 Introduction

Work-Sharing is designed to help employers and workers avoid layoffs when there is a temporary reduction in the normal level of business activity, due to factors beyond the employer's control. Work-Sharing requires an agreement between the employer, affected workers, and the Canada Employment Insurance Commission (the Commission). It provides income support in the form of EI benefits to eligible workers who temporarily work a reduced work week under an approved Work-Sharing agreement, while their employer attempts to return to normal levels of activity.

When an employer applies for a Work-Sharing agreement, the employer must agree to aim for a reduction of between 10% and 60% in the employees' regular work schedule over the term of the agreement. Workers agree to work a reduced week and to share the available work equally over the term of the Work-Sharing agreement, to avoid layoffs. The goal is for all participating employees to return to normal working hours by the end of the term of the Work-Sharing agreement.

The program helps employers retain skilled employees and avoid the costly process of recruiting and training new employees when business returns to normal levels. It also helps employees maintain their skills and jobs by supplementing their wages with EI benefits for the days they are not working due to the Work-Sharing agreement.

Employers must develop a Recovery Plan to indicate what activities or measures they will be implementing during the Work-Sharing period that would result in a return to normal employment levels by the end of the agreement. The Recovery Plan forms part of, and is integral to, the Work-Sharing agreement.

Once a Work-Sharing agreement ends, the employer must serve a mandatory "cooling-off" period of a number of weeks equal to, or greater than, the period covered by the previous Work-Sharing agreement before entering a new Work-Sharing agreement involving the same work unit.

25.1.2 Applicability

The Commission manages claims for EI benefits, including determining whether or not a worker qualifies to establish a claim, calculating the benefit rate and determining the number of entitlement weeks. On a week-by-week basis, the Commission also: 

• determines whether a week is a week of Work-Sharing or a week of regular or special benefits
• calculates the amount of benefits to be paid, and
• issues payment