When the company’s business isn’t going well, employer may sometimes negotiate with employees an separation plan in order to keep company business going. The exit plan is called Workforce Reduction Program. Employer must be able to demonstrate that they have spoken to the employees who voluntarily wish to quit their work in order to help company to reduce labour cost and preserve work for remaining co-workers. This program is a little be different compares to Work-Sharing Program.
Under this program, employer must be able to confirm that they have initiated the Work Force Reduction program to:
- Reduces the overall number of employees permanently;
- Offers the employees the option to leave their jobs to preserve the jobs of co-workers who would otherwise have been laid off; and,
- the communication and decision is documented.
The agreement that you reached with your employees may be part of or outside of a collective agreement.
Only with employer’s proof that employee may be able to qualify for Regular EI benefits. Employee will be given a ROE separation code G7 as the result of their decision.
For more information, you may consult the following link from Service Canada’s website.