Many businesses in Alberta have been negatively affected by the COVID-19 pandemic. Reduced revenues and government shutdowns have resulted in a large number of employees being laid off or even terminated. It is important to understand the differences between the two situations, and what impact the new provisions in the Employment Standards Code have on Albertan employees.
What is a layoff?
A temporary layoff generally occurs when a business currently cannot provide enough work to their employees, however they expect to be able to provide work to the employee(s) in the future. Therefore, a layoff is temporary in nature and the company does not want to terminate the employees, but in fact wants them to return to work for the company at a future date when there is enough work to provide. There are rules that need to be followed by an employer when dealing with a temporary layoff of non-unionized employees in Alberta and these rules are found in the Employment Standards Code.
Section 62 deals with temporary layoffs and states that employers may maintain an employment relationship without terminating the employees by temporarily laying them off provided that they give the employee written notice. This section also sets out requirements that the notice must adhere to. Section 63 provides for a limitation on the duration of the layoff period, after which the employee is then deemed to be terminated, and termination pay will be payable. The period during a layoff which results in termination is if the employee is laid off for more than 90 days within a 120 day period. Section 64 deals with the recall of employees to return to work by providing them with a written notice, and sets out that employees who are given notice to return to work and do not do so within 7 days are deemed to be terminated without pay.
What is termination?
Termination is a permanent form of dismissal from a company, rather than the temporary nature of a layoff. Employees who are terminated are generally not expected or invited to return to work for the employer. For whatever reason the termination occurs, the Employment Standards Code sets out specific notice periods that are required to be given to employees depending on their duration of employment with the employer. If the employer seeks to give notice of termination, the employee is entitled to a minimum of at least the notice periods provided for under Section 56, or termination pay in lieu of notice in accordance with Section 57. However, it is very important for both the employer and the employee to understand that, In Canada, Bardal v Globe & Mail Ltd (1960) laid down criteria for the reasonableness of a termination notice. Therefore, while the Employment Standards Code sets out bare minimums for notice, in cases involving termination, courts have applied the Bardal criteria to often reach reasonable notice periods higher than what is set out as bare minimums in the Code.
Changes to the Employment Standards Code
Bearing all of the above in mind, the Government of Alberta amended the Employment Standards Code as a result of the COVID-19 pandemic to extend the limitation on the layoff period. Understanding that the pandemic has resulted in vast challenges to employment, the government extended the duration of time an employer can lay off their employees without deemed termination. The recently enacted Section 63.1 applies so that if an employee is laid off for “reasons related to COVID-19”, they will have to be laid off for more than 180 consecutive days in order for the employee to be deemed terminated. While this has provided employers with much more breathing room, if they are still unable to provide work and employment to the employees after the 180 days, termination will occur with all of the associated costs.
If you have been laid off for an extended period of time, and have questions about your rights as an employee to termination benefits, contact one of Forum Law’s employment lawyers today.
