Canada: Time To Review Your Temporary Layoffs

On November 9, 2020, the federal minister of labour announced further amendments to the Canada Labour Standards Regulations (“Regulations“) that once again extend certain temporary layoff periods for federally regulated employees. Recognizing the continued hardship caused by COVID-19, the Government of Canada notes that these extensions provide federal workplaces greater protection by allowing employers more time to recall employees.

What's Changed?

Prior to the amendments, the regulations provided that a temporary layoff would not be deemed a termination under the Canada Labour Code (“Code“) in certain circumstances, including:

• – where the term of the layoff was for three months or less; or
• – where the term of the layoff was for six months or less and a recall date was provided in a written notice at the time the employee was laid off.

The recent amendments to the Regulations extend the permissible temporary layoff period under the Code. The length of extension, however, depends upon when the employee was laid off and whether or not the employee was provided a recall date by way of written notice:

It is important to note that the amendments do not apply retroactively. In other words, employees are not entitled to this extension if their employment has already been deemed to be terminated. Additionally, the above temporary changes and extension provisions will not apply to lay-offs occurring after December 31, 2020.

Employers who intend to use this temporary extension should inform their employees of their intention as soon as possible. To do so, a new written notice should be provided to each employee with a new recall date. Failure to properly notify employees may result in employees being automatically terminated at the conclusion of their current temporary layoff period.

BC Employment Standards Act Variances

Under the BC Employment Standards Act (“ESA“), a provincially regulated employer may, with the employee's agreement, temporarily lay off an employee for 13 weeks in any consecutive period of 20 weeks. If an employer is not in a position to recall temporarily laid off employees to work before the 13-week deadline, employers need to apply for variance to avoid a termination under the ESA. If the employee is not recalled to work and an employer does not apply for or receive a variance, the layoff will be considered permanent at the conclusion of the temporary layoff period. The employer is then obligated to comply with the termination notice/pay obligations under the ESA. Contractual/common law termination obligations may also be triggered at this point.

The government has streamlined the variance application process into an online form. Note that employers are required to specify an intended date for recall in the variance application. For employers facing uncertainty in resuming operations based on BC's restart plan, the variance application suggests that employers identify a date that "most closely aligns with their reasonable business plans to partially or fully resume operations".

The Director of Employment Standards encourages employers to apply for a variance as soon as possible.

Finally, it is important to note that the layoff provisions of the Code and the ESA only apply to termination considerations under the applicable legislation. While the Code permits a federally-regulated employer to impose a temporary layoff without being a termination (under the Code), the ESA and the contractual employment relationship for both federally regulated and provincially regulated employers require an employee's agreement to a temporary layoff. Without an employee's agreement, a temporary layoff under the ESA and under the employment contract will amount to a termination.

Originally Published by Miller Titerle, December 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.