{"id":920,"date":"2020-06-11T13:00:46","date_gmt":"2020-06-11T17:00:46","guid":{"rendered":"http:\/\/yulex.ca\/en\/?p=920"},"modified":"2020-09-02T09:30:22","modified_gmt":"2020-09-02T13:30:22","slug":"the-canadian%e2%80%afquarantine-act-and-its-consequences-for-directors-and-officers-in-the-covid-19-era","status":"publish","type":"post","link":"https:\/\/yulex.ca\/en\/the-canadian%e2%80%afquarantine-act-and-its-consequences-for-directors-and-officers-in-the-covid-19-era\/","title":{"rendered":"The\u00a0Canadian\u202fQuarantine Act\u00a0and its consequences for\u00a0directors and\u00a0officers in the COVID-19\u00a0era\u00a0"},"content":{"rendered":"

Written by Fr\u00e9d\u00e9ric Letendre and L\u00e9a Psenak, Attorneys<\/p>\n

(Updated\u00a0<\/span><\/span>September<\/span><\/span>\u00a01<\/span><\/span>st<\/span><\/span>, 2020<\/span><\/span><\/span><\/span>)<\/span><\/span>\u00a0<\/span><\/p>\n

Slowly but surely, various governments are\u00a0<\/span>relaxing<\/span>\u00a0<\/span>COVID-19 related\u00a0<\/span>measures. However,\u00a0<\/span>we<\/span>\u00a0are not there yet.\u00a0\u00a0<\/span>Domestic c<\/span>orporations,\u00a0<\/span>foreign\u00a0<\/span>subsidiaries,<\/span>\u00a0and their directors and\u00a0<\/span>officers<\/span>\u00a0(<\/span>\u201c<\/span>D&O<\/span>\u201d<\/span>) still\u00a0<\/span>have to<\/span>\u00a0be very\u00a0<\/span>careful<\/span>\u00a0when traveling to this country<\/span>,\u00a0<\/span>and particularly when<\/span>\u00a0the latter are not\u00a0<\/span>Canad<\/span>i<\/span>a<\/span>n residents<\/span>.<\/span>\u00a0<\/span><\/p>\n

Last March 25th,<\/span>\u00a0the Public Health Agency of Canada (\u201cPHAC\u201d) announced a first Emergency Order issued under Section 58 of the\u00a0Quarantine Act<\/em> to minimize the risk of exposure to COVID-19 in Canada. More recently, on August 28th, a fourth Emergency Order was issued, replacing the second and the third Emergency Order to extend the measures until next September 30th [1].<\/span><\/span><\/span>\u00a0<\/span><\/p>\n

The\u00a0<\/span>Order regulates the entry into Canada by providing rules to be followed by every person entering the country,\u00a0<\/span>which includes<\/span>\u00a0the obligation to answer any questions asked by screening officer<\/span>s<\/span>,<\/span>\u00a0the obligation<\/span>\u00a0to wear a mask upon entry in the country and while in transition to isolation or quarantine, but more importantly, the obligation\u00a0<\/span>for all travellers\u00a0<\/span>to quarantine for a period of 14 days following their arrival date.\u00a0<\/span>\u00a0<\/span><\/p>\n

The\u00a0<\/span>Quarantine Act<\/span><\/i> applies to individuals, but also to corporations[2]<\/span>. Indeed, under this legislation, the directors, officers,\u00a0<\/span>agents<\/span>\u00a0or mandataries of a corporation are responsible of ensuring compliance to the provisions of the\u00a0<\/span>Act\u00a0<\/span><\/i>by all\u00a0<\/span>of their\u00a0<\/span>representatives<\/span>.<\/span>\u00a0<\/span>The\u00a0<\/span>Act<\/span><\/i>\u00a0further\u00a0<\/span>states<\/span>\u00a0that these persons shall\u00a0<\/span>be held personally liable of any offence to the\u00a0<\/span>Act<\/span><\/i>, as appears\u00a0<\/span>at S<\/span>ubsection 73<\/span>.<\/span><\/i>\u00a0Any such person, as well as any individual who contravenes\u00a0<\/span>S<\/span>ubsection 58 or 73 (<\/span>i.e.:\u00a0<\/span>to any Emergency Orders adopted under th<\/span>e\u00a0<\/span>Act<\/span><\/i>),\u00a0<\/span>are subject to<\/span>\u00a0a maximum fine of $750,000<\/span>,\u00a0<\/span>to imprisonment for a term of not more than six months, or both.\u00a0<\/span>\u00a0<\/span><\/p>\n

Therefore,\u00a0<\/span>it is euphemistic to state that\u00a0<\/span>failure to heed\u00a0<\/span>th<\/span>e<\/span>se\u00a0<\/span>E<\/span>mergency\u00a0<\/span>O<\/span>rders could\u00a0<\/span>have\u00a0<\/span>dire effects<\/span>\u00a0<\/span>on\u00a0<\/span>D&O<\/span>s<\/span>,\u00a0<\/span>regardless country of\u00a0<\/span>resid<\/span>ence<\/span>.\u00a0<\/span>Many subsidiaries\u00a0<\/span>are managed by<\/span>\u00a0<\/span>D&Os<\/span>\u00a0<\/span>residing outside of Canada<\/span>.\u00a0\u00a0<\/span>The<\/span>se<\/span>\u00a0<\/span>obligation<\/span>s<\/span>\u00a0<\/span>are unfettered by this fact<\/span>, as the issue of residence is not likely to serve as grounds\u00a0<\/span>of<\/span> defence<\/span>,<\/span>\u00a0<\/span>n<\/span>or\u00a0<\/span>a mitigating factor when fines or imprisonment\u00a0<\/span>are<\/span>\u00a0considered<\/span>. The\u00a0<\/span>obligation\u00a0<\/span>is an active one since there is a presumption that the\u00a0<\/span>D&Os\u00a0<\/span>are guilty of an offence when it is committed by the<\/span>\u00a0corporation\u2019s\u00a0<\/span>employee,\u00a0<\/span>agent<\/span>\u00a0or mandatary. The only way to rebut th<\/span>is<\/span>\u00a0presumption is to\u00a0<\/span>convincingly show<\/span>\u00a0that the employee,\u00a0<\/span>agent<\/span>\u00a0or\u00a0<\/span>the\u00a0<\/span>mandatary has committed the offence without their knowledge\u00a0<\/span>and<\/span><\/b>\u00a0that they exercised\u00a0<\/span>all\u00a0due diligence to prevent its commission.<\/span>\u00a0\u00a0<\/span>In the\u00a0<\/span>case where\u00a0<\/span>D&Os resid<\/span>e<\/span>\u00a0abroad, the first\u00a0<\/span>part of the presumption\u00a0<\/span>is likely<\/span>\u00a0<\/span>to\u00a0<\/span>be eas<\/span>ier<\/span>\u00a0to\u00a0<\/span>rebut<\/span>, but\u00a0<\/span>adducing compelling evidence that due diligence was exercised will remain\u00a0<\/span>complicated.<\/span>\u00a0<\/span><\/p>\n

The\u00a0<\/span>Act\u00a0<\/span><\/i>does not provide any guidelines on how to comply with this obligation.\u00a0<\/span>In the<\/span>\u00a0unprecedented<\/span>\u00a0context\u00a0<\/span>that the COVID-19 brings\u00a0<\/span>and in regard of the Emergency\u00a0<\/span>O<\/span>rders issued<\/span>\u00a0under the\u00a0<\/span>Act<\/span><\/i>, how can\u00a0<\/span>D&Os<\/span>\u00a0<\/span>respect their obligations?\u00a0<\/span>Consequently, w<\/span>e\u00a0<\/span>u<\/span>r<\/span>ge\u00a0<\/span>D&Os<\/span>\u00a0to implement\u00a0<\/span>detailed<\/span>\u00a0<\/span>and comprehensive\u00a0<\/span>polic<\/span>ies<\/span>\u00a0to\u00a0<\/span>insure<\/span>\u00a0<\/span>that\u00a0<\/span>the corporation and its employees\u00a0<\/span>comply with\u00a0<\/span>their new<\/span>\u00a0obligations.\u00a0<\/span>H<\/span>ere\u00a0<\/span>is a non-exhaustive list of some<\/span>\u00a0measures that should<\/span>, in our view,<\/span>\u00a0be integrated in such polic<\/span>y<\/span>:<\/span>\u00a0<\/span><\/p>\n

    \n
  1. Inform your employees on the COVID-19 situation and on their obligations and yours<\/span><\/b>.<\/span><\/b>\u00a0<\/span>M<\/span>ake them aware of the harmful consequences of not respecting the\u00a0<\/span>Quarantine Act\u00a0<\/span><\/i>or the Emergency Orders adopted under it.\u00a0<\/span>Reliable communication channels<\/span>\u00a0<\/span>dedicated<\/span>\u00a0to COVID-19\u00a0<\/span>should be established, so that\u00a0<\/span>everyone\u00a0<\/span>can\u00a0<\/span>share the latest and most\u00a0<\/span>pertinent<\/span>\u00a0information.<\/span><\/li>\n
  2. Suspend all unnecessary travels<\/span><\/b>. Also\u00a0<\/span>limit<\/span>, when possible,<\/span>\u00a0<\/span>in-person activities. Prioritize remote-working<\/span>, phone calls with clients\u00a0<\/span>and video conference meetings.\u00a0<\/span><\/li>\n
  3. If your employees return from abroad, do not allow them to enter the workplace.<\/span><\/b>\u00a0Be flexible and accommodate them by either letting them work from home and if it is not possible, compensate them for the period of their quarantine.\u00a0<\/span><\/li>\n
  4. Support your employees who are in quarantine<\/span><\/b>. You could do so by\u00a0<\/span>bringing them work supplies\u00a0<\/span>and equipment\u00a0<\/span>(if they can work from home),\u00a0<\/span>providing them with\u00a0<\/span>food, medication, soap, disinfecting gel and\u00a0<\/span>other\u00a0<\/span>necessities.\u00a0<\/span><\/li>\n
  5. Monitor the health of your employees<\/span><\/b>.<\/span><\/b>\u00a0R<\/span>eport any symptoms to local public health officials.<\/span><\/li>\n
  6. Report any violation to the\u202f<\/span><\/b>Quarantine Act<\/span><\/i><\/b>\u202fon\u00a0<\/span><\/b>by<\/span><\/b>\u00a0a\u00a0<\/span><\/b>co<\/span><\/b>worker<\/span><\/b>\u00a0in quarantine or isolation to local law enforcement.<\/span><\/b>\u00a0This includes workers that do not respect the mandatory quarantine period.\u00a0<\/span>It is suggested that\u00a0<\/span>employees\u00a0<\/span>be afforded some form of whistle-blower protection<\/span>\u00a0<\/span>when\u00a0<\/span>report<\/span>ing<\/span>\u00a0any violation<\/span>\u00a0<\/span>by<\/span>\u00a0their colleagues.<\/span><\/li>\n
  7. Stay informed<\/span><\/b>. M<\/span>ake sure\u00a0<\/span>to comply,\u00a0<\/span>at all times<\/span>, with<\/span>\u00a0applicable federal and provincial\/territorial employment and health and safety laws.\u00a0<\/span>\u00a0<\/span><\/li>\n<\/ol>\n

    In addition,\u00a0<\/span>in the province of Quebec, the CNESST (Quebec\u00a0<\/span>Occupational Health and Safety\u00a0<\/span>Commission)\u00a0<\/span>regularly<\/span>\u00a0post<\/span>s<\/span>\u00a0<\/span>and updates\u00a0<\/span>guidelines and toolkit<\/span>s<\/span>\u00a0to\u00a0<\/span>help employers \u201c<\/span>\u202fguarantee that operations can resume or continue under the safest and healthiest possible conditions in the context of COVID<\/span>19[3].<\/span>\u201d\u00a0<\/span>A visit to their website<\/span>\u00a0<\/span>c<\/span>an<\/span>\u00a0be a good start.<\/span>\u00a0<\/span><\/p>\n

    In conclusion,\u00a0<\/span>corporations and\u00a0<\/span>D&Os\u00a0<\/span>who do business abroad<\/span>, who manage travelling employees<\/span>\u00a0or are use<\/span>d<\/span>\u00a0to receive foreign clients\u00a0<\/span>and partners<\/span>\u00a0<\/span>in Canada\u00a0<\/span>shall\u00a0<\/span>more than ever<\/span>\u00a0<\/span>have to<\/span>\u00a0<\/span>act carefully and diligently<\/span>.<\/span>\u00a0The consequences\u00a0<\/span>of not doing so\u00a0<\/span>m<\/span>ay<\/span>\u00a0be\u00a0<\/span>serious and even extreme<\/span>,\u00a0<\/span>f<\/span>irst<\/span>\u00a0and foremost<\/span>, for\u00a0<\/span>the\u00a0<\/span>life<\/span>\u00a0<\/span>that\u00a0<\/span>could be endangered<\/span>, and, secondly, for\u00a0<\/span>D&Os who could\u00a0<\/span>be\u00a0<\/span>fine<\/span>d<\/span>\u00a0<\/span>and\/<\/span>or\u00a0<\/span>imprisoned<\/span>.<\/span>\u00a0 As mentioned previously,\u00a0<\/span>this\u00a0<\/span>applies<\/span>\u00a0<\/span>to<\/span>\u00a0D&Os\u00a0<\/span>of Canadian corporations\u00a0<\/span>who reside outside of Canada as well.<\/span>\u00a0<\/span>\u00a0<\/span><\/p>\n

    [1] https:\/\/orders-in-council.canada.ca\/attachment.php?attach=39166&lang=en<\/p>\n

    [2] For the sake of s<\/span><\/span>implicity,\u00a0<\/span><\/span>we<\/span><\/span>\u00a0use<\/span><\/span>\u00a0the term\u00a0<\/span><\/span>corporation<\/span><\/span>\u00a0to refer to any Canadian<\/span><\/span>,\u00a0<\/span><\/span>provincial<\/span><\/span>\u00a0<\/span><\/span>or foreign\u00a0<\/span><\/span>corporation<\/span><\/span>s<\/span><\/span>\u00a0owned by Canadian residents or\u00a0<\/span><\/span>foreigners<\/span><\/span>, including\u00a0<\/span><\/span>subsidiaries<\/span><\/span>\u00a0based in Canada<\/span><\/span>.<\/span><\/span>\u00a0<\/span><\/p>\n

    [3] https:\/\/www.cnesst.gouv.qc.ca\/salle-de-presse\/covid-19-info-en\/Pages\/toolkit.aspx<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Slowly but surely, various governments are\u00a0relaxing\u00a0COVID-19 related\u00a0measures. However,\u00a0we\u00a0are not there yet.\u00a0Domestic corporations,\u00a0foreign\u00a0subsidiaries,\u00a0and their directors and\u00a0officers\u00a0(\u201cD&O\u201d) still\u00a0have to\u00a0be very\u00a0careful\u00a0when traveling to this country,\u00a0and particularly when\u00a0the latter are not\u00a0Canadian residents.<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9,8,10,11],"tags":[],"class_list":["post-920","post","type-post","status-publish","format-standard","hentry","category-business-law","category-droit-corporatif-en","category-droit-international-en","category-international-law"],"acf":[],"yoast_head":"\nThe\u00a0Canadian\u202fQuarantine Act\u00a0and its consequences for\u00a0travellers - YULEX<\/title>\n<meta name=\"description\" content=\"Domestic corporations,\u00a0foreign\u00a0subsidiaries,\u00a0and their directors and\u00a0officers\u00a0still\u00a0have to\u00a0be very\u00a0careful\u00a0when traveling to Canada.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/yulex.ca\/en\/the-canadian\u202fquarantine-act-and-its-consequences-for-directors-and-officers-in-the-covid-19-era\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The\u00a0Canadian\u202fQuarantine Act\u00a0and its consequences for\u00a0travellers - 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