Temporary Lay-Offs in BC – What Employers and Employees Need to Know

As some businesses slowly start to get back on their feet, a lot of questions still remain about COVID-19 and what to do about employees that are still laid off.

In BC, an employee cannot be laid off for more than 13 weeks in any given 20 week period. If an employer is not ready to recall an employee back to work after 13 weeks of layoff, one of 2 things can happen: the employer and employee can apply to the Employment Standards Branch to extend the temporary layoff beyond 13 weeks, or the employee’s employment ends, which may trigger the requirement for the employer to pay the employee severance.

The COVID-19 pandemic caused unprecedented layoffs in BC. In response, the Minister of Labour ultimately extended the maximum temporary layoff period to 24 weeks which was to end on or before August 30, 2020 (the “COVID Layoff”). On August 13, 2020, the Employment Standards Branch announced that employers can apply to further extend COVID Layoffs for their employees. Initially, employers had until August 25, 2020 to apply to extend a COVID Layoff; however, the Employment Standards Brach has confirmed that employers will now have until 6 months as of August 30 to apply to extend the COVID Layoff period. I understand that as of September 18, 2020, the Employment Standards Branch has received more than 550 applications to extend COVID Layoffs and has approved extensions for more than 9000 employees across BC.

Where an employer didn’t apply for a variance or extension and was unable to bring its employees back to work by August 30, the requirement to provide compensation to its employees may arise under the Employment Standards Act (the “Act”). What happens to an employer who doesn’t have enough work for its employees but also can’t afford to terminate their employment?

If an employment contract has become impossible to perform due to an unforeseeable event or circumstance , an employer may be exempted from the requirement to pay their employees compensation for terminating their employment . For this exemption to apply, the employer must demonstrate that 2 things have happened and are connected: it was impossible to perform the employment contract and this impossibility of performance is because of an unforeseeable event or circumstance.

In the context of COVID-19, an employer would have to demonstrate that the pandemic was both an unforeseen event and the COVID-19 emergency provisions made the employee’s contract of employment impossible to perform. The COVID-19 pandemic was certainly unforeseeable; however, there may be some question as to whether it made employee contracts impossible to perform. For example, layoffs that occurred within the first few months of the pandemic could be interpreted as being more unforeseen and resulting in employee contracts being impossible to perform while businesses struggled to find ways to maintain operations. However, layoffs that occurred later on after safety guidelines had been introduced to allow businesses to reopen and resume some level of operations may have allowed employees to continue performing their jobs. If employees could have worked from home, for example, then their employment contracts would not have been impossible to perform.

While each case will be decided on is own merits, the Tribunal has described 3 scenarios where impossibility may be found in the COVID-19 context:

  1. The employer establishes it is unable to open as a result of public health orders or directives for a period of time longer than a temporary layoff is permitted. Concert venues are an example of where this may be applicable.
  2. The employer establishes it is unable to adapt to public health guidelines and directives for its employees by using PPE or other safety measures. For example, a business that provides a personal service that cannot be performed safely even with appropriate PPE.
  3. The employer establishes that viable and planned to continue operating prior to the pandemic but was forced to permanently close its doors as a result of COVID-19. For example, a business had a lease for its operations and a business plan to operate continuously through 2020, but was forced to cancel its lease, terminate its staff and wind up operations directly in response to the pandemic.

Even these 3 scenarios will be considered at a given point in time and in the context of what government directives and safety protocols were in place at that time. For example, Scenario 2 may be less applicable now, given all the standards and safety protocols in place for providing personal services at such businesses as salons or hairdressers, than it was when the pandemic first hit.

There is no clear answer as to whether an employer may be exempted from paying compensation to its employees. If you think you have a situation where you may be exempted, contact an employment lawyer to get advice on your particular circumstances.

This blog is not intended to provide any or serve as legal advice, and only provides general information.  Every situation must be considered on its own facts.  Contact Campbell Law if you need legal advice.

[1] Section 65(1)(d) of the Act goes on to provide that it doesn’t apply if the trigger is receivership, an action under Section 427 of the Bank Act of Canada or a proceeding under an insolvency act.

[2] Section 63 of the Act provides for notice of termination of an individual’s employment and Section 64 deals with group termination requirements.

[3] Labrynth Lumber BCEST #D407/00