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How COVID-19 changed the employer social contract

April 21, 2021
By Denis Sanchez

Thoughtful, diligent and genuine communication is the key to steadying employees. (Feydzhet Shabanov/Adobe Stock)

Over the past decades, class and society layers have been accentuated by many factors including income, gender, and racial inequality, as well as climate change.

Enter the COVID-19 pandemic in 2020 and between the increasing public interest in the latest developments and the media coverage of the impact and response, all these issues took a prominent position.

We continue to see how the most vulnerable sectors of the workforce are affected the most and how interconnected we are.

Supply chain performance is at the forefront of the pandemic response, from availability of day-to-day supplies to vaccine distribution.


At the individual level, the fact that low-wage workers cannot afford to skip work when sick can lead to an outbreak, which may in turn result in stores or other businesses closing and affecting the public.

New sectors of workers are now recognized as “essential.” The definition is no longer limited to nurses, paramedics and first responders.

It now includes supermarket staff, delivery drivers, warehouse and food processing plant workers, and many others who are on the lowest wage tiers and more vulnerable not only to health risks, but also to the economic impact of the pandemic.

This drives the need for governments and employers to redefine their social contract.

Social contracts and stakeholder capitalism

Stakeholder capitalism is grounded on the concept that companies have a responsibility, not only to their shareholders, but also to consumers, society and the environment.

These other stakeholders have become increasingly important in the context of the pandemic. As a result, employers’ social contracts have been redefined.

Social contracts are unwritten agreements of how we all “play together,” how we support each other and which economic, and social values we uphold.

This translates into how society is structured and how employers focus their attention and include worker safety, environmental impact, and corporate social responsibility among their top priorities.

Since the start of the pandemic, governments worldwide have deployed various initiatives and financial assistance packages to support their economies and the population.

The World Bank estimates that over 120 countries have introduced or expanded worker protection policies in response to the crisis. Also in the last year, G20 economies have delivered fiscal packages that are 30 times the size of the Marshall Plan, which helped rebuild Europe after the Second World War.

For our part, in 2020, Canada increased fiscal social spending as a percentage of GDP by as much as 39 per cent in comparison to the previous year. However, governments cannot do it alone and it is up to employers to also play their part.

Employer leadership in relief and recovery

Private and public employers of all sizes are an integral part of the effort to not only protect and provide relief to the workforce, but to also set the grounds for recovery.

From a financial relief perspective, many businesses have delivered temporary increases in salaries and overtime pay rates, one-time cash bonuses to offset some of the costs of telework and some companies have included “hazard pay” for front-line workers.

Just as importantly, flexibility has dictated much of the approach to managing the workforce.

Employee assistance programs have become more important than ever. HR teams deploy surveys to monitor employee sentiment and pay closer attention to those who may feel isolated.

Employers have also accepted that working conditions need to be more flexible. Not everyone can work remotely, and safety and security have changed the working conditions from supermarkets to manufacturing facilities.

Telework, while largely accepted, demands at-home conditions that not everyone has, and employers need to support employees through it.

On the workplace safety side, employers continue to execute their social contract by safeguarding their employees, suppliers, and the public from the risk of propagation, providing a safe work environment and promoting mental health in the workforce.

From physical barriers, telework and sanitizers to leveraging technology advances to screening workers, suppliers and visitors for symptoms before entering the workplace, employers play a critical role in reducing the risk of transmission of the virus.

The new social contract

As employers respond to the ever-evolving needs of the workforce in the current and post-pandemic environments, their social contract will continue to evolve.

Attention to inequalities in pay and working conditions, and protection of the most vulnerable sectors of the workforce, should remain at the top of employers’ attention.

HR and other policies will need to be aligned in support of this effort and be driven by data such as public health data, and not just opinions.

This will make their enforcement fair, equitable and with a long-term focus.

Through it all, occupational health and safety practitioners and industrial hygienists will continue leading this effort for the benefit of all stakeholders: employees, customers, shareholders, and communities at large.

Denis Sanchez is vice president of operational excellence at Cognibox in Newmarket, Ont.

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