Employment Insurance (EI) and Work Force Reduction program due to downsizing
Table of Contents
Why a work force reduction?
As an employer, to remain competitive, you might have to restructure your enterprise. This may include reducing your overall number of employees. We can help you in allowing your employees, who agree to leave their jobs to preserve the jobs of co-workers, to qualify for benefits.
How to go about it?
To help you, we must be able to confirm that you initiated a Work Force Reduction program that:
- Reduces your overall number of employees permanently;
- Offers your employees the option to leave their jobs to preserve the jobs of co-workers who would otherwise have been laid off; and,
- Is documented.
The agreement that you reached with your employees may be part of or outside of a collective agreement.
Who is part of your overall number of employees?
The overall number of employees includes all your employees and may also include your seasonal, temporary or on call employees. The group covered by the Work Force Reduction program may be all of your employees, or be limited to a sector, or a particular group or a work site. In a small business, the work force reduction might conceivably affect as few as only one employee.
Advantages for your employees
Normally, employees who quit their job without just cause can not receive regular benefits. However, workers who agree to leave their job under a Work Force Reduction program to preserve their co-workers' jobs may receive EI regular benefits, as long as they are eligible.
While we cannot provide a blanket decision that applies to all employees, we can provide you prior confirmation that your Work Force Reduction program meets the conditions of the Regulation.
The next step is for us to be able to confirm that:
- Your employees voluntarily left their job;
- Your employees who quit belong to a group covered by the Work Force Reduction program;
- Each employee's voluntary leaving protected the employment of a co-worker.
What documents should you provide us as an employer?
You must provide documents that will allow us to determine that:
- This is in fact a permanent reduction in the work force;
- Your personnel was informed; and,
- Your employees covered by this program were given the option of voluntarily leaving their job.
This might take the form of a letter, a notice, a memorandum or some other relevant documentation. Hypothetical situations or vague uncorroborated statements concerning possible or potential reductions are not acceptable.
If you initiated such a process, contact your Service Canada Centre to determine a method by which you will provide the information.
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