Update on COVID-19 Layoff Provisions

This past Monday marked the three-year anniversary of the date the World Health Organization declared COVID-19 a pandemic. Since that fateful day in 2020, a lot has changed. Though there remain areas where transmission rates are still high, increased vaccination rates, higher immunity, and public health measures have helped curtail the spread of the virus and significantly decreased the rate of new infections in Canada. 

As a result, many provinces and territories are revoking laws that were amended or implemented as a result of the virus. For example, about a month ago, Alberta repealed the COVID-19 layoff provisions in its Employment Standards Code (the “ESC”). This followed a trend we saw with the federal government as well as many other provinces such as Ontario. 

What’s Changed?

During the COVID-19 pandemic, many Canadian provinces and the federal government introduced changes to the rules around temporary layoffs, such as extending the maximum length of a temporary layoff. Countless businesses were shutting down and there was little to no work for many employees. 

However, as the situation evolved and the government began easing lockdown restrictions, many provinces and the federal government began to end these legal changes and resumed the statutory rules around temporary layoffs and constructive dismissal.

For instance, in Alberta, the ESC was amended in 2020 to extend the temporary layoff period – from 90 days in a 120-day period –  to 180 consecutive days. This allowed employers to temporarily lay off employees for a longer period without triggering termination. As the government has repealed this change, regular layoff rules now apply. 

Best Practices for Employers

Employers should be aware of the legal requirements related to temporary layoffs in their jurisdiction, including the maximum length of a temporary layoff, and ensure that they comply with any termination requirements when the temporary layoff becomes a permanent one (and the employee’s termination entitlements are triggered). 

It’s important to review any changes to the applicable legislation to ensure that you remain compliant. This may require consulting with legal counsel or HR professionals to ensure that you are up-to-date with all relevant legal requirements. By taking these steps, you can avoid legal issues and protect the interests of your business and employees. 

Sweeping your employee’s entitlements to termination pay under the rug in hopes the employee won’t notice after having been on layoff for months can carry hefty penalties for the employer. Remember, the rights of employees in Canada who are terminated from their jobs may include notice periods, severance pay, and other benefits. 

If an employer fails to satisfy its obligations or actively tries to avoid complying, they should be prepared to hear an employment standards officer knocking at their door or be ready to be served with a statement of claim. Not paying employees the statutory minimums can damage the employer’s reputation and lead to negative publicity and mistrust from new or existing employees who catch wind of this. Overall, it is important for employers to handle temporary layoffs and terminations with sensitivity and care.

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