We are reaching a grim anniversary. The World Health Organization declared COVID-19 a pandemic on March 11. Since then the Canadian economy has been wracked by shut downs and mass unemployment. Not only were millions of Canadians laid off without income, millions more had their salaries cut, either directly or through reduced working hours.
It’s difficult for many to even recall the circumstances of only a year ago. Many small businesses were concerned about paying legal fees to protect themselves, believing they needed to preserve every penny of their capital to survive. Employees with perfectly good cases for constructive dismissal were too fearful to sue their employers and sever the relationship. They were terrified that the economy would never recover and they could never find other work. All this occurred right after the Canadian economy had reached full employment. That was only 13 months ago but seems a distant memory.
A year is a long time in the world of work. The longer Canadians are unemployed, the more they lose their networks, their contacts and their skills. New employment becomes more difficult to attain. It leads to mental health challenges, depression and loneliness at a scale unprecedented in our lifetimes. Unemployment saps your emotions as profoundly as your pocketbooks. A 2008 Swedish study even found a decline in reading comprehension caused by prolonged unemployment.
COVID-19 was not an equal opportunity crisis as new challenges emerged. Women, who had been fighting hard to be considered equals in Canadian workplaces, were reminded of their historic lot. The layoffs disproportionately affected them. The employment lost in the hospitality and travel sectors predominantly affected women. With schools and daycare closed, the burden of staying home and looking after their children also fell primarily to women, with many leaving the workforce or taking prolonged leaves of absence, falling behind in their careers.
With employers being forced to find new efficiencies and realizing that the work of many staff members proved to be dispensable, many of those job losses will be permanent
The public/private sector divide became more pronounced in the pandemic. Private sector workers were sent home without pay in droves. Public sector workers were also sent home — with the comfort of full pay.
The Service Canada offices, for example, after multiple walkouts and pressure by the unions, were shut down by the federal government just when Canadian employees (and the elderly relying on public benefits) needed them most, to process Old Age Security benefits and The Canada Emergency Response Benefit (CERB) payments, which many potential recipients did not initially understand. Many of these recipients were not computer literate and some lacked computers at home. The civil servants abandoned those offices just when they were needed most.
Many lower wage jobs have already been lost to automation and that trend will endure. An academic study of the Canadian labour market found that half of new unemployment related to employees in the bottom quarter of income earners. White collar middle-class jobs can be performed remotely, not service and blue collar jobs in warehouses, jobs or factories.
With employers being forced to find new efficiencies and realizing that the work of many staff members proved to be dispensable, many of those job losses will be permanent.
The federal government responded, not by training, but by wage replacement. The CERB plan incentivized many employees to refuse alternative work when it was offered, and potentially led to hundreds of thousands of fraudulent claims with little likelihood of prosecutions, presumably teaching many that crime or, at least lying to the government, does literally pay.
Ottawa’s wage subsidy program permitted employees to pay out those monies to employees who are laid off, without having to recall them, protecting those companies from constructive dismissal actions and discouraging the employees from finding other work. The wages from the subsidy program were higher than CERB payments, which made no sense from a cost or incentive perspective. In both cases, our tax dollars were often wasted when they were desperately needed to retool the workforce.
Why did they not offer instead a subsidy for employers similar to the one adopted in the U.K., where employers are provided some money, premised on their hiring new workers between ages 16 and 24, the group at most risk of falling into long-term unemployment. The Ontario government is now getting that right, focusing dollars on training for jobs in demand, rather than encouraging education in areas where few jobs exist.
Productivity per hour drops 21 per cent when employees work remotely and gets worse the longer work-from-home continues
While these problems persist, there is more confidence one year later. Other than in some sectors, the stock market and economy have stabilized and largely revived. Employers are prepared to fight litigation and employees prepared to sue if they are laid off or otherwise constructively dismissed.
But there will be new challenges ahead. The Aternity Global productivity study of the Canadian workforce shows that productivity per hour drops 21 per cent when employees work remotely and gets worse the longer work-from-home continues. Recognizing this deterioration, companies will want employees back in their offices and require compulsory vaccinations to avoid liability.
That will present conflict in the workplace but, if companies do not insist on vaccinations for employees working in close quarters, they face potential liability for not doing so from employees who become stricken or those they pass the virus on to.
Similarly, if Canadian employees working from home wish to continue that arrangement, at least in part, as most do, employers will be faced with morale issues when ordering them back to work. If they only permit those who work more productively remotely to continue to do so, that will cause morale issues with those not permitted. Playing favourites seldom works out, regardless of the individual merits.
There is also the issue of employers, newly comfortable with remote work, deciding to hire employees from lower wage jurisdictions to perform the jobs Canadians used to, which has already occurred in many IT and call centre jobs. Placement agencies are approaching companies with employees from other countries who are skilled but prepared to take much lower wages than Canadians. That will impact our tax and employment base and cause a move toward more independent contractors.
Another problem which lies ahead is Canadian productivity. Some U.S. states are already up and running. Florida, for example, is entirely open, and has announced that every one who wishes to be vaccinated can get it by May. U.S. President Joe Biden has promised that date for all Americans. Canada is six months behind — optimistically, which poses significant competitive challenges ahead for our companies, prompted by our government’s negligence in acquiring vaccines.
Whether unemployed or working from home, the impact of long-term social isolation will have long-term consequences on Canadians’ mental health, especially for those living alone. The ultimate impact of that on workplace relations remains speculative.
All of this will keep employment lawyers busy. But Canadian workers? Not so much.