We can put our heads in the sand, but there is no hiding from the news that tariffs and economic turmoil are coming for many Canadian businesses.  While there is a lot of uncertainty, there is also, in a strange silver lining from the pandemic, a roadmap for employers to help navigate what is ahead.  Based on what we learned in the early days of the pandemic, there are steps employers can and should take now to prepare.

Communicate with your team

If you have a business that is likely to be impacted by the tariffs, your workers already know this and are worrying about it. Now is the time to engage with your team members with discussions about how you anticipate the tariffs might affect your operations and your planned response. Depending on the size of your workforce, this might be in 1:1, small group, or townhall format meetings.   Even if you don’t have all the answers or a fully formed plan, ongoing communication that lets workers know management is working on this is key to maintaining confidence and hope.

Create/update an employee census

This is a good time to ensure that you have an up-to-date spreadsheet of all of your workforce, including key information that would be needed to build a business continuity plan and be ready for downsizing or layoffs, if needed.  To be ready to assess severance liability, data for each worker should include their start date, birth date, job title, work location, and compensation.  You should also identify the workers who are critical for operations, even at a reduced scale.

Check your employment contracts

You should make sure you have all of the signed employment contracts for your workforce at hand and well organized.  Often when we ask our clients for contracts, they may only be able to find drafts or are not sure whether there are contracts at all.  It is best to look for these when things are not in crisis.

Check for layoff language in the contracts. The importance of temporary layoff provisions in employment contracts became apparent in early 2020, and many contracts that predate 2020 will not address layoffs.

Now is also a good time to have an employment lawyer review your contracts to ensure that they comply with developments in the law. Having an enforceable contract in place with a properly drafted termination provision can help substantially reduce liability in the event of downsizing.  If you don’t have employment contracts for all of your workers, this would be a good time to get those in place.

Know the law

Provincial employment standards legislation and the Canada Labour Code include minimum requirements for termination and layoffs.  If you foresee downsizing or layoffs, it is important to review these legislated minimums well in advance to support your planning.  Employment standards legislation is just the minimum standards, and it is a good idea to consult with an employment lawyer before taking steps that affect your employees in order to understand the full scope of your potential exposure and develop the best strategy for your business.

Build strategy now

There are ways to limit your liability and disruption for your workforce through advance planning.  Giving advance working notice of termination or spreading dismissal dates over a number of months, for example, can dramatically reduce liability from downsizing, but must be done carefully.  Advance working notice can also help workers plan their next steps.

Monitor for changes 

Any plan made now will need to be flexible.  We have heard that government supports for businesses are being considered.  In 2020 that included lengthening the permitted layoff period, wage subsidies, and interest-free loans. These programs and policies were rolled out, and changed, very quickly. Impacted businesses will need to continuously monitor these changes and adapt their plans.

Survival of our Canadian businesses is more important now than ever, and planning will ensure we are able to weather the economic storms ahead.

This blog is not legal advice and only provides general information.  Every situation must be considered on its own facts.

Need legal advice? Contact us [email protected] or 604-535-7063. Our team of employment lawyers in BC and Alberta are ready to answer your questions.

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