Update: March 24, 2020

New COVID-19 Leave

On March 23, 2020, the BC government passed amendments to the Employment Standards Act (“ESA”) to support workers during the pandemic crisis by creating a COVID-19-related leave. The new provisions permit an employee to take an unpaid leave from work in any of the following circumstances that apply to that employee:

• Diagnosed with COVID-19 and is acting in accordance with advice from a health officer or medical professional;
• Not diagnosed with COVID-19, but is in quarantine or self-isolation in accordance with a government order or the guidelines of the BC Center of Disease Control or Public Health Agency of Canada;
• Directed by the employer not to work due to the employer's concern about the employee's exposure to others;
• Providing care to a child or person with a disability, including because of the closure of a school or daycare or similar facility because of COVID-19 (we don’t believe this would apply if school was closed for other reasons, such as the end of the school year);
• Is outside the province and cannot return to British Columbia because of travel or border restrictions;
• Any other circumstances prescribed by regulation (there are none yet).

It appears that these circumstances are meant to coincide with the employee’s eligibility for federal employment insurance and/or other emergency care benefits. Importantly, this leave is not likely available to employees who are laid off solely due to the employer’s shortage of work or business downturn arising from the COVID-19 pandemic.

The employee is entitled to the leave for as long as one or more of the COVID-19 related circumstances above apply to them. Under section 54 of the ESA, the employer must not terminate employment or change a condition of employment without consent because of the COVID-19 leave. Under section 126, the burden is on the employer to prove that a termination during the leave is not related to the leave.

As soon as the leave ends, the employer must place the employee back in the same or comparable position they had before the leave started. Under section 56, the employment is deemed continuous while the employee is on leave for the purposes of calculating annual vacation entitlement, termination pay entitlement, and any pension, medical, or other benefit plan.  In this sense, the COVID-19 leave operates similarly to a maternity or parental leave under the ESA.

A medical note is not required and cannot be requested by the employer and we hope that all parties will be acting in good faith at this time. However, if requested by the employer, the employee must provide “reasonably sufficient” proof that one of the circumstances apply to them.

Importantly, the leave is retroactive to January 27, 2020 (the date of the first confirmed COVID-19 case in BC). This means that if an employer has terminated an employee on or after January 27, 2020 due to one of the above circumstances, the employer must offer that employee re-employment in the same or a comparable position. The retroactivity provision raises some interesting questions where employer may have laid-off or terminated employees to which the leave would apply, particularly if they have already provided severance payments and/or ended benefits for those employees.

*Note: the amendments also created a new illness or injury leave, which entitles employees with 90 or more consecutive days of employment to up to 3 days of unpaid leave in each year of employment for personal illness or injury.

Provincial Action Plan

The BC Government has also announced the details of its COVID-19 Action Plan, which includes the following relief for employees and businesses:

• For workers, a new BC emergency benefit of $1,000, which is a tax-free one-time payment for BC residents who receive federal EI or the new federal emergency care benefit or emergency support benefits as a result of COVID-19 impacts:
• Includes workers who have been laid off, who are sick or quarantined, parents with sick children, parents who stay at home from work while child care centers and schools are closed, and those caring for sick family members, such as an elderly parent
• The workers can be EI eligible and non-EI eligible, such as self-employed
• The benefit will be paid to BC residents in addition to federal income supports
• For businesses:
• Businesses with a payroll over $500,000 can defer their employer health tax payments until September 30, 2020. Businesses with a payroll under this threshold are already exempt from this tax
• The province is extending tax filing and payment deadlines for PST, municipal and regional district tax, tobacco tax, motor fuel tax and carbon tax until September 30, 2020
• Business and light and major industry property classes will see school tax cut in half – relief for businesses who own their own property and will allow commercial landlords to immediately pass savings on to their tenants in triple-net leases
• Longer term plans coming for recovery of hard-hit parts of the economy such as tourism, hospitality and culture sectors to build economic stimulus

As noted in our March 17, 2020 update, there are further details coming on a federal government stimulus package currently under debate in Parliament. We will provide the details once they are finalized but we expect them to include a temporary wage subsidy for employers and other emergency care benefits for workers not eligible for EI.

Note to our Readers: Information regarding COVID-19 is rapidly evolving. We are working to bring you up-to-date articles as the legal issues unfold. This is not legal advice. If you are looking for legal advice or are dealing with an issue in relation to COVID-19, please contact our Employment & Labour Group:

Chris Drinovz [email protected]

Mike Weiler [email protected]

Melanie Booth [email protected]

Jesse Dunning [email protected]

Visit us here: https://www.ksw.bc.ca/employment-law/

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WHAT???

I have to create a new register for my company?

The following three terms mostly mean the same thing and are used throughout the world to identify the people that are important to a company:

UBO – Ultimate Beneficial Owner

BO – Beneficial Owner

SI – Significant Individual

This trend towards transparency of ownership is global. It helps governments and agencies in the recovery of money and assets from illegal activities and helps fight terrorism. The Global Forum on Asset Recovery (GFAR) produced a guide for Switzerland in 2018. The Swedish government now requires a similar register of “beneficial ownership.” The European Union (EU) has been a global leader in fighting money laundering. The EU recently issued the Fifth Anti-Money Laundering Directive (5AMLD) amending the 4AMLD. Part of the reason for the 2019 amendment was the release of the now-infamous Panama Papers and how to close the many loopholes that were exposed in those leaked documents. If you haven’t seen The Panama Papers movie yet, take the time – it’s a decent summary and a pretty good watch.

The BC Province and Canada want to know who owns what and to know this, the provincial and federal governments need to know: Who are the actual real people that are controlling our corporations that are owning Canadian assets? Canada is one of over 200 members (countries) of an international organization called the Financial Action Task Force (FATF) and a smaller group called the Asia/Pacific Group on Money Laundering which is associated with FATF. The FATF organization reviewed and reported to Canada on its laws and policies as they relate to anti-money laundering and combatting the financing of terrorism. Canada agreed to force companies to make available the natural persons (that is, living breathing people) that are significant to a company. This law came into effect in June 2019 for federal companies. Now, British Columbia and other provinces and territories are following suit by enacting similar laws. Each province has its own laws. There are subtle differences between them, but at the end of the day, a new transparency register will be required and it will list the names of actual people of significance who may or may not also be a shareholder.

A company can be fined up to $100,000.00 for the failure to have this information available. A person who has failed to have this information available, whether intentionally or by omission, can be fined up to $50,000.00. This includes shareholders, directors, and even officers. Officers don’t have to be shareholders or directors of companies, but they can still be fined.

On October 1, 2020 (extended from the initial May 1 date), all companies of British Columbia will have to have a transparency register of significant individuals.

The governments of British Columbia and Canada both require this and most other provinces are in the process of changing their laws to also require this. The purpose of the new laws is to flush out money laundering and foreign ownership of Canadian property and to combat the financing of terrorist activities. This trend is global. Over 30 countries already have similar legislation.

Every company has to keep its Constating documents (fancy words for the documents that are the guts of the company) at its records office. Every company has to identify its registered and records office, which is a physical location where the company minute books are located. For the most part, many different types of governments, agencies, people, etc. have the right to look at or inspect the minute book. The minute book usually includes the certificate of incorporation, the articles of incorporation, the register of directors and officers, and a share register, called a Central Security Register, as well as resolutions, agreements and documents that are filed electronically or in hard copy in Victoria at the British Columbia Companies Registrar.

This new register, the Transparency Register, must be maintained or kept at the company’s records office. As of March 2020, the Transparency Register is private and very limited people have access to it. Only the directors of the company and inspecting officials have access to it. Inspecting officials include Canada Revenue Agency, provincial taxing authorities, police and law enforcement, regulators (branches of the government). Companies must make their register available for at least 2 hours per day and only during statutory business days (not after 4 pm on weekdays or at all during the weekends).

Exceptions
Ok, so some specific types of companies do not have to maintain a transparency register of significant individuals, but if you are reading this, your company is probably not on the list below and you probably do have to maintain this new register.

The exceptions are as follows:

1. Extra-provincial companies
2. Publically traded companies (ie: on the stock exchange, like McDonald’s, and Tim Horton’s, and Shell)
3. Reporting issuers or equivalents
4. Prescribed companies (such as the BC Ferries Corporation)

SUMMARY

Companies have to have a transparency register of Significant Individuals

Significant Individuals are:

1. Shareholders with 25% of all shares are Significant Individuals
2. Shareholders with 25% of voting shares are Significant Individuals
3. Trustees are (probably) Significant Individuals
4. Beneficiaries are (possibly) Significant Individuals

Significant Individuals have to provide:

1. Full name
2. Address
3. Citizenship
4. Birthdate
5. Tax residency status in Canada
6. Relationship to other individuals

Shareholders must:

1. Respond to queries from the company about the new register
2. Take reasonable steps to gather the information requested
3. Promptly reply to the company

Directors must:

1. Take reasonable steps to gather information on shareholders
2. Cause the company to create the register
3. Cause the company to update the register within 30 days of getting new information
4. Cause the company to report to significant individuals
5. Cause the company to destroy information

Companies have to:

1. Try to find out details to determine Significant Individuals
2. Create and maintain the register
3. Notify when Significant Individual becomes or ceases to become a Significant Individual
4. Destroy data

Records Office has to:

1. Keep the register
2. Avoid false entries
3. Make the register available at least 2 hours per statutory working day
4. Not allow inspection to unauthorized persons

Contact us at 604-591-7321 or 877-738-3797 toll free, or by email. Our team of experienced business lawyers can help answer all your questions — William G. Weiler, Peter McCrank, Heather Blatchford, Darlene Dort and Larry Hagan.

Call us before your records are inspected.

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KSW Lawyers is pleased to announce that Michael J. Weiler has joined the Firm as a senior member of our Employment & Labour Practice Group.

Michael is a prominent senior counsel who brings with him more than 35 years of experience in employment, labour, and human rights law. Michael has helped many employers throughout British Columbia in wrongful dismissal, union certification applications and related matters such as collective bargaining and labour arbitration, employment standards, and human rights disputes. In doing so, he provides strategic advice to help businesses anticipate and respond to the legal issues that arise in today’s ever-changing workplace. Michael’s passion for the law combined with his desire to fully know and understand his clients’ workplace needs make him a truly unique advisor and advocate for KSW Lawyers.

Welcome Michael!

Took book a consultation or learn more about Michael's expertise. Please contact Michael directly.

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On behalf of Kane, Shannon & Weiler LLP

Our firm has established this general practice law blog to share news, stories and information about legal topics that are relevant to our practice. We will highlight local stories and others from throughout the province. The lawyers at our firm will regularly update the blog with recent decisions as well.

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