The impact of SARS on benefit plans

There’s some relief for workers, employers should review their insurance

No one could have imagined the impact that SARS has had on HR policies.

Suddenly, severe acute respiratory syndrome has become a critical issue not just for health-care professionals but also for the corporate world.

In Ontario, the hardest-hit jurisdiction in Canada, the province’s Occupational Health and Safety Act states that every employee has the right to work in a safe and healthy environment.

The act applies to all workplaces in Ontario which are subject to provincial employment legislation. Essentially, under this act, both workers and employers have a duty to maintain the safety of the workplace.

If an employee believes she is working in dangerous conditions, she has the right to refuse to work without fear of reprisal from the employer. Anything which jeopardizes this environment will violate that employee’s entitlement to a safe and healthy workplace and employers are liable for anything that jeopardizes this entitlement.

Accordingly, when one employee brings SARS into the workplace, he jeopardizes the entitlement of all employees to a safe and healthy workplace. Consequently, many questions have arisen for which employers are searching for answers. Here’s a look at the impact SARS or other severe contagious outbreaks could have on benefit plans:

What happens when an employer discovers that one employee has SARS and has attended in the workplace?

According to Health Canada, it is incumbent upon the employer to immediately quarantine the employee suspected of having SARS, as well as anyone who came into contact with him. The minimum time for quarantine is 10 days and, therefore, the employee should be sent home along with all other employees who were in contact with him.

Is the employee entitled to be paid while quarantined?

The employee should continue to be paid either by the employer or through another source. But it largely depends on the terms of the employer’s particular benefits plan. If the employer has a short-term disability program then the employer should place the employee on short-term disability leave.

Where a short-term disability plan exists, the employer typically continues the employee’s salary while the employee remains off work. The duration of the term for short-term disability varies from plan to plan. The terms of the plan are often outlined in a benefits booklet or in the group policy.

Disability benefits provided to employees may either be in the form of a self-insured plan or a group disability plan, for which the employer undertakes to pay all or part of the premiums.

Once the short-term disability coverage expires, the employee is usually required to apply for long-term disability benefits. In application for the benefits, the employee typically has to meet the definition of “totally disabled” in order to qualify for the benefits.

In certain cases, disabled or ill employees may be entitled to certain statutory benefits, including workers’ compensation, disability benefits under the Employment Insurance Act or Canada Pension Plan benefits.

But if the employer does not have such a plan, the employee may be entitled to collect EI benefits for that period. In addition, the Ontario government, under the premier’s direction, is providing financial compensation for employees who have been quarantined without pay.

What if all of the employees in the workplace must be quarantined? What happens to the employer?

It is important for employers to review insurance policies. The purpose of insurance is to provide protection for employers in case of accidents, fires and unforeseen circumstances. The employer should carefully review the entire policy to ensure the insurance covers the employer for disruption of business.

Ottawa has, at this time, refused to provide monetary compensation for businesses that have suffered as a result of SARS. The Ontario government may, however, address this issue.

SARS is a health risk of epidemic proportions. Lives could be lost if proper precautions are not taken. But there are no easy answers. When it comes to addressing issues with SARS, and employees’ rights in the workplace, proceed with caution and compassion. Employers should not overreact, but should act with reason and evidence. Without either, SARS will infiltrate the workplace and ravage and destroy the healthy and safe work environment which employees have come to know.

Natalie MacDonald is an associate with Grosman, Grosman and Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected]. Her column appears regularly in Canadian HR Reporter’s Guide series. Look for the Guide to Payroll in the Sept. 8 issue.

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