Here we are, entering week three (or is it four… or six?) of the post-social world in which we’re living. Many employers have curtailed their operations (or totally shut them down) or have switched to remote working arrangements for many employees.
How long can this “new normal” persist in relation to businesses? In the financial sense, of course, it can only last as long as a business can remain viable with severely diminished revenues (or none at all). Those may be discussions to be had with accountants, not employment lawyers.
In the legal sense, the clock has begun to tick in relation to laid-off employees and the status of their employment relationships. That’s because – at least given existing employment and labour laws – there are deadlines which will dictate how long the inactive relationship can persist.
There are three windows through which we must analyze this situation: the B.C. Employment Standards Act; the common law of employment/wrongful dismissal; and the unionized world. This bulletin addresses the first of those categories.
The B.C. Employment Standards Act
The B.C. Employment Standards Act was amended recently to provide for COVID-19 job protected leave. This leave is now described on the Employment Standards Branch’s website…
An employee can take unpaid, job-protected leave related to COVID-19 if they're unable to work for any of the following reasons:
The COVID-19 leave is retroactive to January 27, 2020, the date that the first presumptive COVID-19 case was confirmed in British Columbia. During this public health emergency, employees can take this job-protected leave for the reasons above as long as they need it, without putting their job at risk. Once it is no longer needed, this leave will be removed from the Employment Standards Act.
Two scenarios to which it appears the COVID-19 job protected leave does not apply are when an employee simply refuses to attend at work and when the employer has curtailed or shut down its operations due to the financial impact of the COVID-19 crisis. Employees can take this leave indefinitely and retroactively (to January 27, 2020) and their employment status is effectively frozen while on this (unpaid) leave.
Employees who have been laid off for reasons not included in the list, above, will be subject to the definition of “Temporary Layoff” contained in the Act. The Employment Standards Branch’s website has this to say on that topic…
An employee is laid off when they're given less work or no work – with the plan that the employee will return to a regular work schedule. If an employee’s hours are reduced, they are considered laid off as soon as they earn less than 50 percent of their weekly wages at the regular rate (averaged over the previous eight weeks).
Layoffs can be considered a termination of employment and employers must give written notice and/or pay compensation to employees.
Some layoffs are considered temporary – they can only happen if:
Temporary layoffs can only be:
If the temporary layoff is longer than this, it becomes a termination of employment. The start of the layoff is the termination date and the employer must give pay for length of service based on this date.
To the extent that the above criteria apply to your laid-off staff, the clock is now ticking towards that 13-week threshold. At 13 weeks, if the employees have not been recalled to a regular work schedule, their employment relationship is deemed by the Act to be terminated.
If your business imposed staff layoffs at the beginning of March, you have until the end of May to recall employees to their “regular work schedule”. This is not something that employers can contract out of (unionized employers can, however, negotiate their own “right of recall” period).
What Happens At 13 Weeks?
When the 13-week threshold arrives, your business will either…
In scenario 1, there will be little to worry about. In scenarios 2 and 3, the question will be whether the employer will be held to the “compensation for length of service” requirements contained in s.63 of the B.C. Employment Standards Act.
My own expectation is that the Employment Standards Branch and Tribunal will – in this truly exceptional situation – determine that the “impossibility” exception (the statutory version of the common law doctrine of frustration) will apply if the employer can demonstrate that, as a direct and unavoidable impact of the pandemic, the employment relationship could not be continued. No rulings have been issued to this effect, as yet, but this is my best expectation of the outcome.
New Brunswick’s employment standards people have issued a notification that “COVID-19 falls within the exemption of the requirement of notice… under unforeseen reasons. As such employers are not required to provide notice to their employees or pay in lieu thereof”. Perhaps B.C.’s Employment Standards Branch will do the same, eliminating any question as to whether the “impossibility” exception applies here.
Terminations Not Directly Caused By The Pandemic
The real challenge is going to be in relation to terminations which employers cannot point to as a direct and unavoidable impact of the pandemic. There will be those terminations falling within a grey zone… they will be perhaps more discretionary in nature (perhaps a decision to start doing business differently) or may be cases in which an employer simply selected one employee to keep over another.
Will those “grey zone” instances qualify for the “impossibility” exception such that compensation for length of service will not have to be paid? I suspect not, which means we should be starting to talk, right now, about your business plans for the coming months.
This item is provided for general information purposes only and is not intended to be relied upon as legal advice. Informed legal advice should always be obtained about your specific circumstances.