Explaining Temporary Layoffs in BC – What Needed to Change, but Didn’t
With close to one million employees applying for EI last week, we can be sure a large number are from BC and a large number have been laid off by employers as a result of their businesses closing or slowing down due to the impact of COVID-19.
Looking at the law in BC with respect to non-union workers, employers are allowed to temporarily layoff employees in very limited circumstances. Temporary layoffs can only happen if the layoff was part of the employment contract, the layoff is normal in the industry (logging, ski instructors), or the employee agrees to the layoff.
Most employees will not be eligible for temporary layoffs. The result is that a layoff will then be considered a termination of employment. This means, the employee is entitled to severance under the Employment Standards Act as a minimum and, if there is no written employment agreement, under the common law.
The Courts will decide how much employees are entitled to under the common law if there is not a written employment contract that specifies how much the employee is to receive as a result of a without-cause termination. The starting point may be significantly more than the minimum set out in the Act. Many factors can change the amount of severance, but the most common are the employee’s age, length of service, education or training, and likelihood of finding other employment.
We were expecting the BC government to address this issue when they made changes to the Act earlier this week. We anticipated that temporary layoffs would be allowed in BC to help employers deal with the pandemic. However, the issue was not addressed, potentially leaving employers exposed to many breach of contract or wrongful dismissal claims in the coming months.
Businesses need to consider all the scenarios before making decisions on how best to deal with their employees during this time. We at BTM Lawyers LLP are here to help. Contact our employment lawyer, Grant Morrison, at [email protected] or 604-917-0124 to discuss.