Digest of Benefit Entitlement Principles Chapter 25 - Section 2

25.2.0 Recommendation and approval of agreement

A program officer from the Commission is responsible for reviewing the Work-Sharing application. They are also responsible for overseeing the Work-Sharing agreement once it is approved; in other words, the program officer is the Commission’s representative and is the main point of contact for the employer. Following the review of a Work-Sharing application, the program officer will make recommendations to the delegated authority. Factors and arguments supporting their recommendation must include:

  • details of the employer’s recovery plan
  • the effect of non-approval on the community
  • funding details (in other words, costs of Work-Sharing versus layoff), and
  • a rationale stating the reasons the application should, or should not be approved, including any additional relevant information

In situations in which a claimant is removed from the Work-Sharing agreement, it is the program officer’s responsibility to decide if the conditions warrant review of the agreement itself.

25.2.1 Eligibility criteria Employers

To be eligible to participate in the Work-Sharing program, an employer must:

  • be a publicly-held company, private business or not-for-profit organization:
    • not-for profit organizations are eligible if they engage in business activities, from which they retain the resulting profits (surplus) in order to support the goals of the organization
    • the need for temporary layoffs must be directly associated with a reduction in the organization’s normal level of business activities (commercial, financial, or industrial activity of an economic nature, in other words providing or producing goods or services in profit-based activities)
    • temporary layoffs in a not-for-profit organization resulting from a reduction in revenue levels alone (such as reduced grants, donations, memberships, investment income or other disruptions in funding streams) would not meet the Work-Sharing eligibility criteria
  • have been operating the business in Canada for a minimum of 2 years:
    • where there has been a change of ownership within the past 2 years, evidence showing the business operations continued without major changes under the new owner (for example, type of business, regular work patterns, employment levels, number of employees) may be accepted and the 2 year criteria may be waived
    • a franchise business will be treated as a stand-alone company
  • be experiencing a temporary reduction in business activity which is beyond the employer’s control; layoffs resulting from other circumstances or business decisions cannot be supported under Work-Sharing (for example, decision to increase efficiencies or profits by reducing staffing levels)
  • employ a minimum of 2 participating employees within the Work-Sharing unit (the group of employees who will participate in the Work-Sharing agreement), who meet the minimum requirements to establish a benefit period
  • be willing to implement a recovery plan designed to return the work unit to normal staffing levels (in other words, retain all core employees) and hours of work, by the end of the Work-Sharing agreement Employees

To be eligible to be part of the Work-Sharing unit, an employee must be eligible for EI benefits. EI eligibility cannot be determined before an individual actually files for benefits and employees are not required to disclose their eligibility status to their employer or to the program officer. Therefore, the employer may identify any worker of a potential Work-Sharing unit, in the submission for the Work-Sharing agreement, even though there may be workers who will not be eligible for EI benefits.

All Work-Sharing participants must be core employees. Core employees are those employees who are required to carry out the day-to-day functions of the business. Core employees must be year-round, permanent full-time or part-time employees of the company. Employers should reduce staff to core levels prior to entering into a Work-Sharing agreement.

Temporary (in other words, term or contract) employees are considered to be eligible core employees provided they are not employed on a seasonal basis. Temporary employees are only eligible if they have maintained hours similar to permanent full-time or part-time employees within the last 12 months. Employees hired on a casual or on-call basis or through a temporary help agency are not eligible. Some employers have long-standing agreements with temporary help agencies and consider these employees to be a part of the company. However, for the purposes of participating in a Work-Sharing agreement, these employees are not included.

Employees hired on a seasonal basis, such as students hired for the summer or for a co-op term are not eligible for the program. However, students not employed on a seasonal basis may participate.

Employees who are paid by piece work are eligible to participate in a Work-Sharing agreement. Piece work is defined as payment based on the amount of goods produced, rather than hours worked.

Foreign workers with a valid work permit have the same rights and responsibilities as Canadian citizens and permanent residents, and therefore, may participate in the Work-Sharing program.

Employees who are minor shareholders in the business and whose shares do not provide them with significant decision-making power within the company are eligible to participate in the Work-Sharing program. Pursuant to paragraph 5(2)(b) of the EIA, employment of a person who controls more than 40% of the voting shares in the company is not insurable employment. Consequently, a worker in this situation would not be eligible to participate in the Work-Sharing program, as an employee.

Some employers may have been unable to avoid layoffs prior to applying to participate in the Work-Sharing program. Core employees who were in layoff status prior to the agreement start date may be eligible to participate.

A claimant may work for more than one employer at the same time; however, the employee cannot collect Work-Sharing benefits under more than 1 Work-Sharing agreement at the same time. Employment from all employers in a claimant’s qualifying period will be taken into account when calculating the employee’s Work-Sharing benefits. Where a claimant is participating in more than 1 Work-Sharing agreement, they may choose under which agreement they wish to be paid EI benefits. Although they cannot be paid under both agreements, no earnings from either Work-Sharing employment will be deducted from benefits, for the duration of each agreement. Work-Sharing unit at place of employment

A Work-Sharing unit is a group of EI eligible core employees who have agreed to reduce their normal working hours in order to share the available work and avoid layoffs. There must be a minimum of 2 EI eligible employees in each Work-Sharing unit.

The Work-Sharing unit generally includes all employees in a single job description or all employees in the same department, division, plant or operational unit of a company. The Work-Sharing unit does not necessarily include all of the employees in the company. A Work-Sharing agreement with a large company may be comprised of several Work-Sharing units with different job descriptions or from different departments, while a smaller company may have only 1 Work-Sharing unit.

Employees who form a Work-Sharing unit should perform similar job duties so that they can share the available work. All employees who are part of the Work-Sharing unit must reduce their regular hours of work on an equal basis (in other words, same percentage of reduction). If during the period of the Work-Sharing agreement, work activities increase, the additional hours of work must be shared equally among all employees in the Work-Sharing unit. Employees who do different work but whose jobs impact one another (in other words, slowdown in business affects one job resulting in less work for another job or jobs) may be part of the Work-Sharing unit, provided all employees reduce their hours equally. If the employer cannot ensure that the available work will be shared equally among all employees from any aspect of the operation, an amendment to the Work-Sharing agreement may be negotiated.

Employees who share the same job description (or do similar work) as those in a Work-Sharing unit, but do not wish to participate in a Work-Sharing agreement or who are not eligible to receive EI benefits are still required to reduce their hours of work on an equal basis as employees who are participating in a Work-Sharing agreement. Individual workers cannot volunteer to participate in Work-Sharing while others ‘opt out’ and continue to work normal hours.

Employees who are needed to help generate work and thus assist in the recovery of the business should not be included in the Work-Sharing unit. Examples include senior management, executive level marketing and sales agents, outside sales representatives, or technical employees engaged in product development. In other words, employees performing functions essential to the development and implementation of the recovery of the business should be working full-time in support of the recovery plan. Other supervisors/managers are eligible to take part and may be included in the Work-Sharing unit, as long as they are not determining the direction of the company.

Some businesses (typically smaller businesses) may have only one employee in each job category (in other words, all employees in the business are doing a different job). Provided the employer can clearly demonstrate that participation in Work-Sharing will avoid the temporary layoff of at least 1 employee, employees with different job descriptions may form one Work-Sharing unit. The employees must all agree to the same percentage of reduction to their normal working hours.

Once an agreement is in place, if a different group of employees becomes affected by the same work shortage, the employer may submit an amendment request in order to add this new unit to the agreement. The new Work-Sharing unit will not be eligible for the full term of the agreement; they will have the same end date as the original Work-Sharing unit(s). However, if a different group of employees is affected by a new work shortage (in other words, another set of circumstances beyond the control of the employer), a new application for an agreement may be submitted by the employer for a new full-length term. Employee representative

The members of the Work-Sharing unit(s) must agree to authorize an employee who will represent them in the agreement. Normally, the employee representative(s) will be a member of the Work-Sharing unit. In a unionized workplace, the authorized employee representative(s) may be a member of, or designated by the union.

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