Archived - Backgrounder: Supporting Jobs and Growth through Work-Sharing

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Work-sharing protects jobs for Canadian workers and helps businesses keep their skilled workers as they restructure. It is an adjustment program designed to help employers and employees avoid temporary layoffs when there is a reduction in the normal level of business activity that is beyond the control of the employer.

The measure provides income support to employees eligible for Employment Insurance (EI) benefits who work a temporarily reduced work week while their employer recovers.

Work-sharing agreements must be agreed upon by both employee and employer representatives, and approved by Service Canada.

The initial duration of a work-sharing agreement must be between a minimum of 6 consecutive weeks and a maximum of 26 consecutive weeks. Employers may request an extension of up to 12 weeks (for a total duration of 38 weeks).

Workers participating in work-sharing agreements work a temporarily reduced work week between two and four and a half days per week, while receiving EI benefits for the remainder of the week.

The program has helped stabilize Canada’s job market over the last three years by providing support to more than 290,000 employees, allowing businesses to keep their skilled workers engaged while restructuring.

Budget 2011 made available a temporary extension of up to 16 weeks for active or recently terminated agreements. Currently, 15,000 participants continue to benefit from the Work-Sharing Program.

In order to support jobs and growth and a continued recovery for Canadian businesses and workers, our Government will provide an additional extension of up to 16 weeks for active, recently terminated or new work-sharing agreements until October 2012.

This will mean that currently active work-sharing agreements could have a duration of up to 54 weeks.

Work-Sharing—A Lifeline for Savaria Concord Lifts Inc.

Brampton, Ontario—Savaria Concord Lifts Inc. (Savaria) has manufactured accessibility products since 1990. When the company encountered a significant drop in sales in late 2008, its Human Resources Director, Bruce Hayes, applied for assistance through the Government of Canada’s Work-Sharing Program to help both the company and its employees weather the economic downturn.

As was the case with many other companies, the recession had a significant negative impact on Savaria, especially since almost 70 per cent of its sales go to the United States. Faced with the challenge of having to lay off some of its highly skilled staff of 172, the company needed an immediate and viable solution. It signed a federal work-sharing agreement in January 2009, which was later extended to January 2011.

“Had we not received assistance from the program, we would have had to make even more significant cuts in personnel,” says Mr. Hayes. Through work-sharing, the company was able to retain most of its highly skilled workforce during this difficult economic period. He added that Savaria’s employees found the program “tremendously helpful” as it assisted them financially for a two-year period. “I have not had one complaint about the program from any of the 140 employees who were on the program at its peak.”