Business Legal Obligations Amid Coronavirus Outbreak

Business Legal Obligations Amid Coronavirus Outbreak

Written by Priyanka Correia
Fact-checked by Caitlin Wood
Last Updated June 11, 2021

With coronavirus knocking at our doorstep, we have to wonder what are our rights and obligations as employers and employees. Must an employer pay an employee who is quarantined due to coronavirus? Can employees refuse to work with an employee who’s exhibiting signs of the virus? Are there legal concerns we should be aware of? 

There are a million questions that can be addressed regarding the situation, so we’re here to help clear the air and make sure you’re responding to coronavirus in the workplace according to Canada’s Labour Code. 

Do Businesses Have To Put Preventive Measures In Place? 

As a business, it is required by the Canada Labour Code Part II that you provide a safe working environment for your employees. If you do not accept this responsibility and fail to provide a safe and healthy working environment it can lead to legal problems or penalties.

If you’d like a more detailed look at all your duties and responsibilities as an employer, please have a look at the Canada Labour Code Part II.

Employers should assess their work environment and determine if any of the work tasks put their employees at risk of contracting the virus. If so, you should look into adding additional preventive measures in place. If you implement changes to your hazard prevention program, be sure to inform and train all employees of this change. 

From a legal point of view, you will want to make sure you’ve done your part in educating and implementing measures that would prevent exposure to the virus. The actions you take will be the proof you need in the event an employee claims you’ve not provided a safe environment.   

What You Can Do To Prevent  Exposure In The Workplace?

Implementing stronger health and safety rules can help limit the virus’s exposure in the workplace. Here are a few preventive measures you can try using: 

  • Review and train your employees on the business’s health policy and protocols. 
  • Encourage hygienic behaviour by displaying posters and notices regarding proper handwashing, sneezing, coughing, and face touching. 
  • Increase the availability of safety products like hand sanitizer, disposable gloves, disinfectant wipes, etc. 
  • Invest more in having the workplace cleaned more regularly. 

Duty And Rights Of Your Employees

As an employee, the Canada Labour Code gives you the right to know and refuse work that is considered dangerous. This includes any activity that can cause a serious threat to your life or health. You are also responsible to comply with your employer’s safety measures that are put in place. 

Check out the pros and cons of being an employee vs. a contractor.

What Do You Do If Your Employee Has Coronavirus 

In the event an employee contracts the virus, the employers must advise the Labour Program immediately. This will allow you to consult with a representative of the Minister of Labour about work refusal procedures under your region’s occupational health and safety regulations.

For more information, please visit the Government of Canada website

Layoffs And Leaves 

In the event, one of your employees must be quarantined or sent home due to possible contraction of the virus, you should be aware of your legal obligations regarding their pay. 

Depending on your province’s regulations, some may be entitled to paid leave while others are not. To avoid confusion or abuse of the system, reviewing the labour laws, your internal policies, and your employee’s rights and responsibilities is an important way of keeping your employees informed and your business running smoothly.  

You will also want to inform yourself of the procedures and legal obligations you have to your employees if you have to lay people off due to a decline in business. Whether you have to terminate, layoff, or dismiss an employee there are certain procedures you must follow according to the Canada Labour Code. For example, if you plan to layoff 50 or more employees, you must not only inform the minister of Labour but you must also consider the severance pay and notices your employees are entitled to. 

Got laid off? Learn how to deal with being laid off.


When dealing with COVID-19, it is important to have mitigation measures that do not discriminate based on race or ethnicity. For example, though China is the origin of the COVID-19 outbreak, you cannot use it as a reason to require every Chinese employee to provide a medical note that proves they are not infected. However, it is okay to ask an employee who has recently visited China to work from home for 14 days. Though this is an extreme example, it is one to keep in mind when implementing such safety measures. 

Prepare For The Future

Besides the health and safety of your employees, you may also want to have a contingency plan. Planning ahead will be key to minimizing damage should an outbreak happen. It will also allow you to create a plan of action if the virus affects your business activity. For example, if your business experiences a shortage of cash flow, your plan of action may detail how you can secure funding or cut costs to improve it. 

Is your business experiencing cash flow problems? Check out 5 ways you can improve your cash flow.

Bottom Line

Proactively updating your employees on COVID-19 as it continues to develop will help minimize exposure and spread of the virus. Staying informed and keeping your employees briefed on work policies regarding leaves and absences will also help you deal with any employees trying to take advantage of their rights to refuse unsafe work. Lastly, planning ahead will help your business overcome any legal or financial problems in the face of COVID-19.  

Rating of 5/5 based on 3 votes.

Priyanka is a personal finance expert at Loans Canada. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives. She has taken financial control of her life by using Mint to budget and track her expenses while growing her wealth by investing through Wealthsimple. She also believes in having an emergency fund, so she keeps a good sum of money in an easily accessible high-interest savings account. She also uses the American Express Cobalt Card to earn points on all her purchases, further fueling her savings goal. She also uses Loans Canada’s lender directory whenever she wants to compare rates from different lenders.

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