Authors: Benjamin Young, Colleen Verville, Q.C., Sanjana Ahmed
As provinces proceed to shut down non-essential services in response to the COVID-19 pandemic, First Nation employers in Canada are facing difficult decisions regarding their workforce, including the difficult decision to temporarily lay off workers.
This blog discusses the key statutory considerations that First Nation employers located in Alberta, British Columbia, Saskatchewan and Manitoba should consider before temporarily laying off employees.
As of April 13, 2020 the contents of this blog reflects the current legislation associated with temporary layoffs in each of these jurisdictions. However, in light of the rapidly evolving COVID-19 crisis, the layoff laws and regulations may be subject to change. First Nation employers should note that the statutory temporary layoff provisions described below will need to addressed in conjunction with the employer’s obligations under an existing employment contract, collective agreement, or common law. Those obligations may supersede the legislative provisions referenced below. We encourage employers to consult with legal counsel for the latest developments and guidance on this topic.
Legislative Requirements and Time Periods
Under the Canada Labour Code, which applies to federal employees, a temporary layoff is:
- a period of three months or less;
- a period of three to six months, when there is a fixed date when the employee will return;
- a period of more than three months if:
- The employee is still receiving payments from their employee at an agreed rate; or
- The employer continues to make payments for the benefit of the employee to a pension plan that is registered pursuant to the Pension Benefits Standards Actor under a group or employee insurance plan ; or
- The employee receives supplemental unemployment benefits (SUB) [see our previous blog post]; or
- The employee should receive SUB, but is disqualified under the Employment Insurance Act.
- Any period of re-employment that is less than two weeks is not included when calculating the period of the layoff.
- Layoffs may also be provided for by a collective agreement so long as the employee maintains their recall rights.
- Under the Canada Labour Code, notice of temporary layoff is not required.
Under the Alberta Employment Standards Code, an employer must provide written notice of the layoff. The layoff notice must:
- state that it is a temporary layoff notice;
- state the date that the layoff is to commence;
- include a copy of sections 62, 63 and 64 of the Alberta Employment Standards Code, and
- include any other information provided for in the regulations.
The duration of a temporary layoff period has been recently increased to 120 days. After this period ends, the employment of the laid off employee is considered terminated, and termination pay is required, unless:
- The employee and employer come to an agreement regarding payment of wages or another amount;
- The employer makes payments for the benefit of the laid-off employee by providing payments to the employee’s pension plan, insurance plan, or other similar plan; or
- There is a collective agreement that provides for the employees recall rights.
Under the British Columbia Employment Standards Act, a “week of layoff” is defined as a week during which an employee earns less than 50% of the employee’s regular weekly wages, which has been averaged over the last eight weeks.
An employee who has been laid off temporarily will not be entitled to notice or termination pay unless the layoff exceeds 13 weeks in a 20-week period of time. Anything exceeding this temporary layoff period will be considered a termination of employment. Any entitlements owing to the employee from the termination of employment will need to be calculated from the first date of the temporary layoff. There are no advance notice requirements in the B.C. legislation before an employer may temporarily lay off an employee.
The British Columbia Employment Standards Act does not provide a general right to temporarily lay off employees. Employers in British Columbia can only use temporary layoffs if:
- Those rights are written into the employment contract;
- The employee consents to the temporary layoff; or
- If temporary layoffs are done as a well-known industry practice.
Generally, any layoffs that fall outside of these three circumstances are considered to be a termination of employment, requiring notice of pay in lieu of notice in accordance with section 63 (see section 63 for group terminations).
However, employers may not have to provide employees with notice or pay in lieu if the reason for the layoff is due to an “unforeseeable event” preventing the employee(s) from being able to perform their duties. If a closure or reduction is directly related to COVID-19 and there is no way for the employee to perform work in a different way, for example by working from home, the exception may apply to exclude employees from receiving compensation for length of service and group termination pay. If an employer terminates an employee for reasons that are not directly related to COVID-19, or if the employee’s work could still be done (perhaps in a different way), this exemption would not apply. These situations must be dealt with on a case-by-case basis and we recommend First Nation employers to obtain legal advice before proceeding with temporary layoffs.
Under the Employment Standards (Public Emergencies) Amendment Regulations, 2020 enacted by the Saskatchewan government on March 19, 2020, an employer is not required to provide statutory notice when they lay off employees for a period or periods of 12 weeks or less in a 16-week period.
If an employer lays off employees for a layoff period exceeding 12 weeks in a 16-week period, the employees are deemed to be terminated and are entitled to pay instead of notice as outlined in The Saskatchewan Employment Act. The notice calculation is made from the date on which the employee was laid off.
More information about temporary layoffs in Saskatchewan can be found here.
Pursuant to the Manitoba Employment Standards Code and Employment Standards Regulation, if a layoff is longer than eight weeks in a 16-week period, it is deemed a termination and the employee is entitled to notice (unless the employer: has applied to the director of employment standards for a different period).
A temporary layoff will not be deemed as a termination in the event that:
- The employee experiences regular/recurring layoffs which they knew about when they were hired;
- The employer continues to pay the employee’s wages;
- The employer continues to make payments to the employee’s pension or insurance plan; or
- There are applicable provisions in a collective agreement that deal with layoffs.
Employees with less than 30 days of service with an employer may also be dismissed without termination pay.
Please note that First Nations employers and their entities are subject to jurisdictional requirements which vary based on a number of factors. As such, it is important for a First Nations employer to be cognizant of the particular jurisdiction that its workforce is subject to. A determination in this regard may require the advice of legal counsel. Further, please note that this blog post does not discuss all jurisdictions within Canada and is not intended to supplant, or be used in lieu of, legal advice.
When considering temporary layoffs, employers must consider their legal obligations, especially in light of new rules and regulations put in place to assist both employees and employers navigate through these uncertain times relating to the COVID-19 pandemic.
If you have any questions or concerns relating to how to temporarily lay off employees, please do not hesitate to reach out to our labour and employment teams in our various offices to assist you and your organization.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.