When a Temporary Lay off is no longer Temporary

Many employers have laid off employees in response to the pandemic. Workplaces have been closed, operations restricted and companies have suffered significant financial consequences. For many workplaces, that led to laying off employees on a temporary basis, with the intent to re employ their work force once the pandemic situation allowed it. 

However, under the British Columbia Employment Standards Act when an employee’s hours have been reduced to the point where they are earning 50% less than their usual earnings or less, they are considered to be laid off.  To be considered temporary, the intent must be that the worker will be returned to their usual employment. Under the Act, unless the employer and employee agree to a temporary lay off, or there is a contractual right to impose a temporary lay off, a temporary lay off will be considered a termination. Also under the Act a temporary lay off becomes a termination by law if it extends to 13 weeks or more. Given the pandemic there are a number of employees who would fall into this category.

When a temporary lay off becomes a termination, obligations on the part of the employer are triggered. Most significantly, an obligation to pay severance as required by the Act is required once a temporary lay off becomes permanent. This triggers significant financial liability on the part of employers.

The time period allowable for a temporary lay off has recently been amended under the Act. The amendment extends the potential time period for a temporary lay off to 16 weeks rather than the 13 weeks that existed prior to the pandemic. The government has indicated that this amendment has been made to provide increased flexibility for employers and employees who mutually wish to extend a temporary lay off related to the COVID-19 emergency. This is not expected to be a permanent amendment to the Act but rather one that is in place solely in response to the pandemic. Depending on what happens over the next several weeks we may see a further extension of the time period for which a temporary lay off may extend.

This update was authored by Rose Keith, QC. Looking for more information on developments regarding the evolving COVID-19 pandemic? Contact Rose at rkeith@harpergrey.com or anyone else listed on the authors page.