Employers are facing unique issues in responding to the COVID-19 pandemic. As the uncertainty surrounding the COVID-19 pandemic continues, employers are assessing their options when it comes to their employees, including temporary layoffs and reductions in working hours.
While we seek to provide general guidance in this article, we encourage employers to seek legal advice with respect to the specific issues facing their business.
In British Columbia, an employer can temporarily layoff a non-union employee without concern about it being treated as termination if: (a) there is a right to do so in the employment agreement between the employer and the employee; (b) temporary layoffs have been common in the industry; or (c) the employee consents to being temporarily laid off.
In most industries, temporary layoffs are uncommon and not typically contemplated in an employment agreement. In those circumstances, an employee must agree to be temporarily laid off. If the employee does not agree, then the employer can consider alternatives, such a reduction in an employee’s work hours, which is discussed below, or termination of the employee’s employment altogether.
A temporary layoff that exceeds 13 weeks in a consecutive 20-week period is, after the expiry of the 13 weeks, deemed to be dismissal, effective the first day of the layoff. This may trigger significant obligations for the employer including, but not limited to, the payment of severance.
The start date of the temporary layoff can be decided between the employer and employee, as the legislation in British Columbia, unlike in other provinces, does not require a minimum amount of notice to be given to an employee for a temporary layoff.
If an employee agrees to a temporary layoff, it is good practice for an employer to document this, which should also specify the commencement date of the temporary layoff and any other relevant terms. During the period of temporary layoff, employers are not required to pay an employee; however, an employer may choose to continue an employee’s benefits during this time.
Some employers may elect to have an employee work reduced hours; however, employers should be mindful that a substantial alteration of employment may constitute (constructive) termination of an employee’s employment. Further, legislation in British Columbia provides that an employee is deemed to be laid off if, in any week, an employee earns less than 50% of the employee’s regular wages.
The Government of Canada has developed the Work-Sharing program which is designed to help employers and employees avoid layoffs when there is a temporary reduction in the level of business activity due to COVID 19 that is beyond the control of the employer. The program provides income support to employees eligible for employment insurance benefits who work a temporarily reduced work while their employer recovers from the financial impacts of the COVID-19 pandemic. More information about the Work-Sharing program, including the application process is available here.
As the COVID-19 situation continues to evolve, the general information provided in this article may be subject to change. We therefore recommend that employers seek legal advice in respect of the issues noted above. Please feel free to contact us directly.
