Temporary special measures for the downturn in business due to COVID-19 and the steel and aluminum sector - Applicant guide

From: Employment and Social Development Canada

COVID-19

Due to the coronavirus disease (COVID-19) outbreak, there are changes to this program and this page is no longer accurate.  All Work-Sharing agreements fall under the COVID-19 special measures, until further notice.

On this page

A. Introduction

Work-Sharing (WS) is an Employment Insurance (EI) program that helps employers and employees avoid layoffs when there is a temporary decrease in business activity beyond the control of the employer. The program provides EI benefits to eligible employees who agree to reduce their normal working hours and share the available work while their employer recovers. The goal of the program is for all participating employees to return to normal working hours by the end of the agreement.

The employer and the employees (and the union, if applicable) must agree to participate in a WS agreement and must apply together.

It is important to understand the WS program eligibility before applying. Please read all the information provided in this document and discuss it with your employees by providing them with the Employee Guide.

B. Work-Sharing temporary special measures

Downturn in business due to COVID-19 (2019 novel coronavirus)

Effective March 15, 2020 to March 14, 2021, the Government of Canada is introducing the following temporary special measures:

  • extend the maximum duration of WS agreements from the current 38 weeks to 76 weeks
  • waive the mandatory waiting period between agreements, and
  • ease recovery plan requirements for the duration of the WS agreement

WS temporary special measures are available to employers either directly or indirectly experiencing a downturn in business due to COVID-19.

Measure available to employers

If an employer's agreement is signed between March 15, 2020 and March 13, 2021 (with an agreement start date no later than March 14, 2021) or begins or ends between March 15, 2020 and March 14, 2021, then they may be eligible for a 38-week extension for a total of 76 weeks.

If an employer's agreement ended between June 23, 2019 and March 14, 2020 and are currently in their mandatory cooling-off period, then they may be eligible to waive the mandatory waiting period, and apply for a new agreement with a maximum possible duration of 76 weeks.

Downturn in the steel and aluminum sector

Effective August 19, 2018 to March 27, 2021, the Government of Canada is introducing temporary special measures that will extend the maximum duration of WS agreements from the current 38 weeks to 76 weeks, and waive the mandatory waiting period between agreements.

This measure will be available nationally to all eligible employers who can demonstrate that the decrease in work activity they are experiencing is directly or indirectly related to the downturn in the steel and aluminum sector.

The following outlines the measures available to employers:

If an employer's agreement is signed between August 19, 2018 and March 27, 2021 (with a start date no later than March 28, 2021) or begins or ends between August 19, 2018 and March 27, 2021, they may be eligible for a 38-week extension for a total of 76 weeks.

C. Program eligibility

Who can apply

Employers

To be eligible for a WS agreement, your business must:

  • be experiencing a recent decline in business activity of at least 10%
  • be experiencing a recent decline in business activity directly or indirectly related to the impact of COVID-19 or the downturn in the steel and aluminum sector
  • demonstrate that the shortage of work is temporary, beyond your control and not a cyclical/recurring slowdown
  • be a year-round business in Canada for at least 2 years
  • be a private business, a publicly held company or a not-for-profit organization, and
  • have at least 2 employees in the WS unit

Employees

To be eligible for WS, your employees must:

  • be year-round, permanent, full-time or part-time employees needed to carry out the day-to-day functions of the business (your "core staff")
  • be eligible to receive EI benefits, and
  • agree to reduce their normal working hours by the same percentage and to share the available work

Who cannot apply

Employers

Your business is not eligible for WS if:

  • it is experiencing a reduction in business activity due to:
  • a labour dispute
  • a seasonal shortage of work
  • a pre-existing and/or recurring production slowdown, or
  • the decrease in business activity is due to a recent increase in the size of the workforce

Employees

Employees that are not eligible include:

  • seasonal employees and students hired for the summer or a co-op term
  • employees hired on a casual or on-call basis, or through a temporary help agency
  • employees who are needed to help generate work and/or who are essential to the recovery of the business (for example, senior management, executive-level marketing/sales agents, outside sales representatives, technical employees engaged in product development, etc.), and
  • employees who hold more than 40% of the voting shares in the business

D. Program information

Shortage of work

To be eligible for the WS program, employers must demonstrate that they have experienced a decrease of at least 10% in sales and/or production levels within the last 6 months. The decline in business activity must be directly or indirectly related to the downturn due to the impact of the steel and aluminum sector.

Work-Sharing unit

A WS agreement may be composed of one or more WS unit(s). A WS unit is a group of employees with similar job duties who agree to reduce their hours of work over a specific period of time. The unit generally includes all employees in a single job description, or all employees who perform similar work. There must also be at least 2 employees in a WS unit.

The WS unit should not include employees who are needed to help generate work and/or employees who are essential to the recovery of the business (for example senior management, executive level marketing/sales agents, outside sales representatives technical employees engaged in product development, etc.). These individuals should be working full-time in support of the company’s recovery plan. Other supervisors and managers are eligible to participate and may be included in the WS unit – as long as they are not involved in recovery efforts.

Equal sharing of work

All members of a WS unit agree to reduce their hours of work by the same percentage and to share the available work. If, during the period of the WS agreement, work activity increases, the additional hours of work must be shared equally among all members of the unit.

Expected work reduction

A WS unit must reduce its hours of work by at least 10% (one half day) to a maximum of 60% (3 days). The reduction of hours can vary from week to week, as long as the average reduction over the course of the agreement is from 10% to 60%.

Individual employees in the same job description cannot volunteer to participate in WS while others decline to participate and continue to work normal hours. Members of a WS unit who do not qualify for EI benefits or who (for personal reasons) choose not to accept EI benefits, are still required to reduce their hours of work by the same percentage.

In the context of a unionized work environment, there must be an equal reduction of hours and sharing of all available work among members of a WS unit regardless of any seniority clauses in a collective agreement.

The proposed reduction in work hours should correspond with the number of anticipated temporary layoffs. For example, if an employer submits a request for a 40% reduction in the hours of work, the employer must indicate there is a need to layoff approximately 40% of the workforce. Workforce is defined as all employees working at the location of the business, and who are working in the section(s) of the company affected by the shortage of work.

Agreement length and extension

A WS agreement has to be at least 6 consecutive weeks long and can last up to 26 consecutive weeks. Employers may be able to extend their agreements by another 12 weeks, for a total of 38 weeks.

WS temporary special measures include a 38-week extension, which brings the maximum duration of a WS agreement to 76 weeks.

Extensions are not automatic; all requests for an extension must be assessed and approved by Service Canada. Employers must submit an extension request at least 10 days prior to the end date of their WS agreement. The request for an extension must provide reasons why recovery was not achieved and must demonstrate a continued reduction in business activity that would result in the layoff of one or more employees. The employer must provide an updated recovery plan with a list of activities that will take place during the agreement that will support the on-going operations and viability of the business.

Employee/union representative

The members of each WS unit must authorize an employee who will represent them in the agreement. The employee representative must be a member of the WS unit, except in the case of a unionized workplace where the authorized employee representative may be a member of, and designated by the union, and therefore, may not be part of the WS unit. This individual will normally be referred to as the union representative. The employee/union representative acts as the delegate and voice for all employees in a WS unit. The employee representative works with the employer in the WS application process and is responsible for communicating the needs and relaying any issues or concerns of the WS participants to the employer.

As well, the employee/union representative will ensure that the employees know what to expect when participating in a WS agreement and provide them with a copy of the signed agreement and the Employee Guide. The employee/union representative must agree to what is stipulated in the WS application and the WS agreement by signing both documents.

Employer representative

The employer must designate a member of their staff as employer representative, and that person must have signing authority for the company. The employer representative must not be a member of the WS unit, due to their obligations to the WS agreement.

E. Developing your application

If you are applying for a new agreement or an extension, you must submit the following documents:

  1. EMP 5100 - Application for a Work-Sharing Agreement 
  2. EMP 5101 - Attachment A: Work-Sharing Unit Attachment

The section below explains how to complete the documentation required and what type of information should be included.

1. A) Form EMP 5100 - Application for a WS agreement

All boxes of the application form must be completed, and the document must be signed by the authorized employer representative, the authorized employee representative and the union representative (if applicable). 

2. Form EMP 5101 - Attachment A: List of employees in the WS unit

The Attachment A lists all employees who are participating in a WS agreement (in other words, the members of the WS unit). The employer representative of the non-unionized WS unit must sign the Attachment A; his signature indicates that all employees agree to participate in Work-Sharing and to reduce their hours of work.

The union representative must sign the document on the employee’s behalf. The union representative’s signature indicates that all union employees in the WS unit agree to participate in WS and to reduce their hours of work.

F. Other considerations

Employee guide

You must provide your employees with a copy of the Employee Guide before applying to the WS program, to ensure that employees are informed of all aspects of the WS Agreement.

Size of Workforce

Employers must not increase the size of their workforce during a WS agreement, but may replace core-employees who choose to leave. Note: For businesses with multiple departments, the departments that are not participating in WS (in other words no employees form part of a WS unit) may increase staff as required.

Subsequent application for a Work-Sharing agreement

Employers must serve a mandatory waiting period before they are eligible to begin a new WS agreement involving the same employees who participated in a previous WS agreement. The waiting period is equal to the number of weeks of the previous agreement, up to a maximum of 38 weeks. Note: If the previous agreement was in place for 76 weeks, the waiting period would equal 38 weeks.

You may submit an application for a new WS agreement involving a different group of core employees at any time; however, you must demonstrate that the work shortage is caused by new unforeseen and uncontrollable circumstances.

Training activities

Skills enhancement may take place during the period of a WS agreement, whether it is on-the-job training or off-site courses. Training activities for members of the WS unit may be included in the Recovery Plan to support business recovery. Upon initiating training activities, arrangements between the employer and employees should be made to ensure that training activities will be carried to term in the event of an unanticipated recovery in the business activities.

The salary costs of employees taking part in training during normal scheduled working days/hours are not compensated through the WS agreement. Employees may take part in training during the non-working days/hours of the WS agreement (in other words during days/hours missed due to participation in WS) and are compensated through the WS agreement.

The employer may not specifically or intentionally reduce the scheduled working hours of employees in a WS unit in order to allow employees to take part in training. The working days/hours of employees in a WS unit must only be reduced based on the demonstrated reduction in business activity and projected reduction in work activity.

In the event of partial or full return to normal business levels, and if recovery could be impeded by employees’ continued participation in training activities, employees may be requested by the employer to return to work.

Agreement monitoring

All WS agreements are monitored at least once by Service Canada.

The purpose of monitoring is to determine the extent to which the objectives of the WS program are being achieved and to ensure the WS agreement is implemented as agreed to by all parties. Monitoring increases the likelihood that the agreement will succeed by providing on-going opportunities to support the employer and plan for any needed adjustments.

The Service Canada Program Officer will contact the employer and employee representatives directly. Employers may be asked to provide payroll records. Some WS agreements may be subject to an on-site monitor involving a visit by Service Canada officials to the employer’s premises.

During the WS agreement, the employer must regularly report the total hours worked, the hours missed due to participation in WS and hours missed due to any other reasons for each member of the WS unit via a weekly Utilization Report. The Utilization Report submitted by the employer is necessary for the payment of WS benefits and is the primary method of monitoring a WS agreement. (See Employer Responsibilities Guide for more information on this).

G. Assessment of the application

We will review your application to ensure that:

  • it contains the required information
  • the information provided is valid and correct, and
  • it meets all program requirements

All information regarding your application will be kept confidential. We will send you a letter to acknowledge that we have received your application, and we will inform you in writing once your application has been approved or denied.

Once a WS application is approved, the agreement must be signed within 60 calendar days following the approval date. As well, a signed agreement that is not implemented within 60 calendar days of the start date (indicated in section 5b of the articles of agreement) will be terminated. In both cases, if you still wish to participate in the WS program, a new application will need to be submitted.

H. Approval

Service Canada officials will inform you of the status of your application. All decisions on applications, whether rejected or approved, will be confirmed in writing.

Decisions regarding the assessment of applications are final. There is no appeal process for the rejection of a WS application.

I. Employer responsibilities

Once your application has been approved, please refer to the Employer Responsibilities Guide for important information on managing your agreement.

Annex A: Examples of industries in the steel and aluminum sector and impacted by COVID-19

Steel and aluminum sector

  • Iron and steel mills and ferro-alloy manufacturing
  • Steel product manufacturing from purchased steel
  • Alumina and aluminum production and processing

Downturn in business due to COVID-19

  • Tourism
  • Manufacturing
  • Transportation

*Lists are non-exhaustive

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