Tackling The Coronavirus At Work – More ESA Changes

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For many employers, as the COVID clock has continued to tick, the deadline staring them in the face has been the expiry of the 13-week temporary layoff period (contained in B.C.’s Employment Standards Act).  When that timeframe expires, temporary layoffs are deemed to be terminations. 

And that creates all sorts of questions for employers to address.  I’ve been wondering, for weeks, whether B.C.’s provincial government would extend that 13-week period in order to give employers more flexibility to cope with the COVID-induced business downturn.  And now they’ve done so.

The B.C. government has announced an extension to 16 weeks for (non-union) layoffs which are the result of the COVID-19 emergency.  This extension aligns the temporary layoff period with the 16 weeks of federal CERB funding for laid-off employees.

This should come as good news to just about everybody.  Employers will have an extra 3 weeks to bring employees back to active duty before their employment is deemed to have been terminated.  It allows employees to maintain their employment relationship a little longer.

There are three preconditions to this change to the Act…

  1. The employee must be laid off.  A week of layoff is any week in which an employee earns less than 50% of their regular wage.
  2. The employee must not have a right of recall.  (The right of recall is a reference to employees covered by a collective agreement, so this extension only covers employees who are not unionized.)
  3. The COVID-19 emergency must be the cause of all or part of the layoff.

For many employers, their layoffs occurred in mid-March.  That means that the original 13-week temporary layoff period was due to expire in mid-June.  Now, they’ll have until roughly the end of the first week of July to suspend the ticking of the clock by recalling employees to active duty.

The interesting bit of the new language is the requirement that COVID-19 must be the cause of all or part of the layoff.  Exactly how the Employment Standards Branch and Tribunal will judge that COVID was “part” of the reason for the layoff remains to be seen.  And, I wonder, just how much of a “part” of the reason for the layoff does COVID have to be?

For the moment, the reality may be that most employees who were ever going to be laid off as a result of COVID already have been.  If the reason for that layoff was in some way connected to the spread of the pandemic, employers can presume they’ll qualify for the 16-week layoff limit.

Planning For “Beyond COVID”

Even with the extension of temporary layoffs to 16 weeks in length, and whether your business resumes or not, the relationships with some people who are presently employed by you are likely to cease. 

This will happen either by operation of the expiry of the 16 week “temporary layoff” period, or by way of your business expressly notifying employees of the cessation of the relationship, or by employees walking away and claiming a constructive dismissal has occurred.  It is almost inescapable that – for most businesses - some people are going to be leaving, permanently.

As I’ve been saying of late, how these employment cessations end up being treated by the courts and the Branch and Tribunal may have a huge effect on the ability of businesses to resume operations and recover from the impact of COVID.  And, of course, it will have an equally huge impact on the financial stability of many, many employees. 

My prediction has been that the courts and the Branch Tribunal will approach it this way…

Can the employer demonstrate that, as a direct and unavoidable impact of the COVID pandemic, the employment relationship could not be continued? 

There has, of course, been no indication from the courts as to whether this is the approach they will adopt.  It will be many, many months before a case works its way far enough along in the civil litigation process for us to receive that guidance.

There has, however, now been an indication that B.C.’s Employment Standards Branch will be adopting the approach I’ve suggested.  The Branch’s website now contains the following information relating to the s.65(1)(d) “impossibility” (frustration) exception…

COVID-19

If a business closure or staffing reduction is directly related to COVID-19 and there is no way for employees to perform work in a different way (for example, working from home) the exception may apply to exclude employees from receiving compensation for length of service and/or group termination pay.

This exception is not automatic in all situations during the pandemic. If an employer terminates an employee for reasons that are not directly related to COVID-19 or if the employee's work could still be done (perhaps in a different way, such as working from home) the exception would not apply. Decisions on whether this exception applies are made by the Director on a case-by-case basis.

I am quite certain that, when employees file complaints as a result of having been denied working notice/pay in lieu, the Branch and Tribunal will be closely examining the specific scenario to ensure that the layoffs/terminations were the direct and unavoidable result of the COVID pandemic. 

That being the case, I caution employers against presuming that any and all terminations in the immediate future will qualify for the Act’s s.65(1)(d) exception from giving notice or pay in lieu.  When it comes to terminations, proceed with caution, because if something seems too good to be true, it usually is.

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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.

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