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Navigating the End of Temporary Layoff Extensions

Tips on Navigating the End of Temporary Layoff Extensions

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With the temporary layoff extensions expiring on August 30, there will probably be a lot of permanent terminations. What should employees keep in mind? How about employees?

Note: This article does not contain legal advice. If you would like advice on your specific situation, please contact Spraggs Law. 

In March and early April, in order to facilitate social and physical distancing and keep people safe, governments and health authorities recommended businesses across Canada temporarily close. A report released by Statistics Canada in late April found one-in-five Canadian businesses had laid off more than 80 per cent of their staff.

After reaching an all-time high unemployment rate of 13.70 % in May, by July, the Canadian labour market had regained 55% of jobs lost since the start of the coronavirus pandemic in March, 2020. Canada’s unemployment rate stood at about 10.9% in July, roughly double that of February, before the pandemic started.

Temporary Layoff Extensions During the COVID-19 Pandemic

Before the pandemic, very generally speaking, employers across Canada who needed to downsize temporarily or permanently could choose to either terminate or, with an employee’s agreement, temporarily lay off their employees.

Employees who are terminated are, once again generally speaking, entitled to severance pay and other payments by the employer. Employees who are laid off will also be terminated after a certain period of time passes, and will then be eligible for severance payments.

In order to help prevent struggling employers from shouldering another financial burden during the pandemic in the form of severance payments, and to help ensure temporarily laid-off employees could return to work more easily, the federal and provincial governments implemented temporary layoff extensions.

Navigating Temporary Layoff Extensions in British Columbia

Employment law covering layoffs and termination differs from province to province across Canada.

In British Columbia prior to the pandemic, the provincial Employment Standards Act, a temporary layoff longer than 13 weeks in any 20-week period (or about three months in a five-month period) was considered a permanent layoff.

In June, the maximum length of a temporary lay-off permitted by the statute was extended by the provincial government to 24 weeks, ending on or before August 30, 2020.

It was possible for employers to extend a temporary lay-off beyond August 30 or 24 weeks with a variance from the Employment Standards Branch. A variance application required approval of 51% of affected employees and it had to have been submitted by August 25, 2020.

If a variance has not been obtained by an employer by August 30 and employees that were laid off have not returned to work, they are deemed to have been terminated. This attracts pay in lieu of notice under the Employment Standards Act and common law severance.

What does this mean for employers and employees?

For Employers

Pay attention to the details

Pay attention to timelines for wages, pay in lieu of notice and other amounts under the Employment Standards Act. You may be required to pay terminated employees within 48 hours of termination.

Consider consulting an employment lawyer

If an employee is terminated, employers are liable for common law severance as well as amounts under the Employment Standards Act. A number of factors go into determining an appropriate amount for common law severance. Consider consulting an employment lawyer to assist with a severance offer and to ensure a proper waiver and release is obtained.

Help with the employment transition

Don’t make it difficult for your former employees to get another job. The quicker they find alternative employment, the more the employer’s liability for severance is reduced.

For Employees

Understand the nature of your employment status

If you are still being told that you are laid off due to COVID and your employer has not received a variance from the Employment Standards Branch, this is not permitted. You may be entitled to pay in lieu of notice as well as common law severance.

Keep track of your job search

If you have been terminated, start looking for new employment and keep good records of all your job searching, including applications, interviews and offers.  Employees are required to attempt to mitigate their losses and severance can be reduced if reasonable alternative employment is not sought out.

Consider consulting an employment lawyer

If you are concerned about a non-competition clause in your employment contract that restricts your employment options, consider consulting a lawyer to review the document. These clauses are often not enforceable.

Conclusion

All of the above applies to workplaces governed by the Employment Standards Act of British Columbia. Some workplaces in BC are governed by federal law, in which case, different rules apply.

The team of lawyers in Vancouver at Spraggs Law can help provide clarification. Give us a call at 604 359 1627 for a free consultation to discuss how we can offer personalized assistance based on your circumstances.