[Canada] The Changing Face Of ‘Temporary’ Lay-Offs

22 JUN 2020

The COVID-19 crisis has disrupted many aspects of the employment relationship. Businesses were forced to close for significant periods of time, many employees have relocated to home offices, had working hours decreased or lost their jobs altogether and unemployment rates are at an unprecedented high. HR Reporter explores another singular post-shutdown phenomenon: temporary layoffs.

Temporary layoffs number among the most prominent employment law issues to have arisen during the pandemic. They are not ordinarily an option for employers unless they are either specifically provided for in employment contracts or collective agreements, or are considered a normal part of the industry; like seasonal work. 

Despite the fact that employment standards legislation technically provides for temporary layoffs, without the conditions detailed above courts and other decisionmakers usually deem them as constructive dismissal. Even such layoffs can be implemented, it is only for a limited period of time until employers must either bring the employee back or terminate their employment with all the legal entitlements.

However, things have changed. Government-ordered shutdowns and physical distancing protocols have been implemented to “flatten the curve” and reduce the spread of COVID-19 and these have left many businesses without revenue or work for employees. Many want to be able to return to ‘normal’ as soon as the economy reopens and, if possible, they do not want any loss of employees. And obviously many employees want to hold a job when work is available again. The inevitable result is that many businesses have been forced to temporarily lay off employees.

Temporary layoff provisions in employment standards legislation across Canada are designed to protect workers from open-ended periods without work where they do not enjoy the benefits of termination entitlements, reasonable notice or pay in lieu of notice. Things intended to help workers manage until they can find new employment. But the nature of the pandemic and the economic shutdown mean nobody can be sure how long the layoffs will last. The stages of reopening put in place by governments tend to be related to the number of new cases of COVID-19, not time.

In acknowledgement of this, some jurisdictions have made changes to their employment standards legislation. Ontario was the most recent province to do so, changing its Employment Standards Act so employees temporarily laid off after March 1 - as a result of the pandemic - are now on Infectious Disease Emergency Leave until six weeks after the declared emergency in the province ends. This means employers do not have to make the decision to either bring a laid-off employee back or terminate their employment, as long as the crisis continues to prolong shutdown. (Link via original reporting)

In Ontario, the normal maximum period for temporary layoffs is 13 weeks in any period of 20 consecutive weeks. Or, under certain circumstances, less than 35 weeks in any period of 52 consecutive weeks.

Ontario’s Employment Standards Act changes follow those in several other provinces including Alberta which altered the maximum temporary layoff period from 60 to 120 days for layoffs related to COVID-19 from March 17. British Columbia had the same 13-weeks-out-of-20 limit as Ontario but altered it to 16 weeks for COVID-19-related layoffs, Saskatchewan established an open-ended temporary layoff period for public emergencies and Manitoba implemented a temporary exception from the temporary layoff limit for layoffs occurring after March 1.

The measures reportedly make sense from a business perspective as many employers have had no choice about implementing layoffs and deserve help to make it through through the crisis. The indefinite loss of termination entitlements for workers is partly offset by other government measures like the federal Canada Emergency Response Benefit (CERB).

As it reopens, is likely that the economy will have a long post-pandemic adjustment period. It is likely that there will be a need for additional, perhaps graduated, changes to employment and labour standards. A delicate balance will need to be struck between supporting businesses as they find their feet while safeguarding the legal rights of workers who will have a significant role to play in the success of any recovery.

Source: HR Reporter