To Layoff or Not to Layoff: Employee Rights and Employer Obligations in COVID-19
Who this resource is for: Provincially regulated, non-unionized, non-profit employers in British Columbia
Who made it: Written by Katy E. Allen, Associate, Lawson Lundell LLP, with input from Martha Rans. Katy Allen is an associate in the Labour, Employment and Human Rights Group in Vancouver. She advises and represents clients regarding a broad range of issues relating to labour, employment, employment standards, human rights, and privacy law. She also assists clients with drafting and interpreting employment agreements and providing input on a wide variety of employment and labour related issues in business transactions. This post is intended for educational use only and available to anyone on that basis. © Pacific Legal Education and Outreach Society (PLEO), April 2020.
What relevant rights and obligations are there for employees under the Employment Standards Act?
a. New job-protected unpaid COVID-19 leave and illness/injury leave
The B.C. Employment Standards Act (the “ESA”) contains several job-protected leaves for employees. Two new ones have been enacted in response to COVID-19.
Unpaid Sick Leave: Employees with more than 90 days’ service are entitled to 3 days of unpaid sick leave. This new leave will continue to exist once the state of emergency ends. Employers should consider whether they need to update their sick leave policies or workplace handbooks to comply.
COVID leave: An employee will be entitled to unpaid leave of indefinite duration if, in relation to COVID-19, any of the following applies:
the employee has been diagnosed with COVID-19 and is acting in accordance with instructions or an order from a medical health officer, or advice of a medical practitioner, nurse practitioner or registered nurse;
the employee is in quarantine or self-isolation in accordance with an order from the provincial health officer, an order made under the Quarantine Act (Canada), guidelines of the British Columbia Centre for Disease Control, or guidelines of the Public Health Agency of Canada;
the employer, due to the employer’s concern about the employee’s exposure to others, has directed the employee not to work;
the employee is providing care to an eligible person (e.g. an employee’s child), including because of the closure of a school or daycare or similar facility;
the employee is outside the province and cannot return to British Columbia because of travel or border restrictions; or
any other prescribed situation exists relating to the employee.
Employers can ask for reasonably sufficient proof to support a COVID leave, but cannot ask the employee to provide a medical note.
b. Temporary layoffs, terminations, group terminations
Temporary layoffs:
In order for an employer to be able to temporarily layoff an employee, the right to layoff must be: (1) expressly addressed in a written employment contract; (2) implied by virtue of industry custom; or (3) voluntarily agreed to by the employee.
Even where temporary layoffs are permitted, the current legislation only permits employers to lay off employees for a maximum of 13 weeks in a 20 consecutive week period. If that period is exceeded, then the employee’s employment is automatically deemed to have terminated on the first day of the layoff.
Terminations:
Below is a high level summary of terminations under the ESA; please consult Employment Standards for a full review of employers’ obligations, and consider getting legal advice whenever conducting terminations of employment.
Employees being dismissed without cause are entitled to individual and group notice under the ESA (unless a statutory exception applies). They may also be entitled to common law reasonable notice of dismissal or contractual severance. o Individual notice of termination under the ESA is based on length of service and ranges from zero to eight weeks. Group notice ranges from eight to 16 weeks and is triggered if more than 50 employees will be dismissed from a single location within a two month period. Notice of group termination must also be provided to the Minister of Labour.
Notice can be provided as working notice, payment in lieu of notice, or a combination of the two. Payment in lieu of notice must be calculated in accordance with the ESA.
An exception to notice requirements under the ESA occurs where the employee is employed under an employment contract that is impossible to perform due to an unforeseeable event or circumstance other than receivership, action under section 427 of the Bank Act (Canada) or a proceeding under an insolvency Act.
Given the unprecedented nature of COVID-19, it is unknown whether the COVID-19 pandemic will be considered an “unforeseeable event or circumstance” making the employment contract impossible to perform. The Employment Standards Branch states on its website that business closures and staffing reductions due to the current COVID-19 pandemic could be seen as resulting from unforeseeable events that make an employee’s work impossible to perform. It explains that if the closure or reduction is directly related to COVID-19, and there is no way for the employee to perform work in a different way (e.g. remotely), then this exception to statutory termination notice may apply.
What strategy should I take for temporary layoffs or reducing workers’ hours in COVID-19?
Constructive dismissal
this context, constructive dismissal occurs where the employer makes a substantial change to an essential term of the employment contract and the employee does not consent to the change.
Providing work for pay is the most essential term of employment. A layoff is a constructive dismissal unless the employee has expressly or implicitly agreed. A substantial reduction of pay without an employee’s agreement is also a constructive dismissal.
When faced with a unilateral layoff or substantial decrease in pay, an employee has to either accept the change or to resign and consider bringing action for constructive dismissal. Due to market conditions, many employees may accept the change in order to remain attached to their employer.
Employers are well advised to get an employee’s agreement to layoffs or reductions in pay in writing.
WorkShare agreements under Employment Insurance (“EI”) rules
The Work-Sharing program is a three-party agreement between employers, employees and Service Canada.
WorkShare agreements are aimed at avoiding layoffs when there is a temporary decrease in the employer’s normal business activity. The goal is to reduce the employees’ normal working hours and share the available work equally amongst them. Employees on WorkShare are able to claim e.i. on their lost hours.
Some amendments to the WorkShare plan have been made by the government during COVID-19.
What government funds are available for employees in COVID-19 who have gotten laid of?
a. Employees: federal Canada Emergency Response Benefit and EI, B.C. Emergency Benefit for Workers
b. Employers: The 75% Canada Emergency Wage Subsidy (“CEWS”) and the 10% Temporary Wage Subsidy for Employers
Further information on the CEWS can be found in this blog post
What if an employee refuses to work and they are not eligible for a leave under the Employment Standards Act?
An employee generally can only refuse to work if they are permitted to do so under their employment agreement (including policies like leave policies), the ESA, occupational health and safety laws, or human rights legislation. If they cannot rely on one of those areas, then the employee is required to report to work or risk being disciplined for failure to attend.
Consider an employer’s duty to provide a safe workplace under occupational health and safety legislation.
Consider the duty to accommodate under human rights, in particular, with respect to disability, age, or family status.
Still have questions?
Submit an inquiry* to our Ask a Law Student service at the link below. https://www.pacificlegaloutreach.com/ask-a-law-student-1
* Our law students can only provide general legal information, not advice about what steps you should take in your specific circumstance. They also cannot provide legal opinions.