Can my employer lay me off?

If you are in a union, this question depends on the language of your collective agreement and we recommend that you contact your union representative.

If you are not in a union, the Employment Standards Act only permits temporary layoffs in very limited circumstances.

Economic Downturn & Temporary Layoffs

During times of economic downturn, such as those resulting from Covid-19, businesses may slow down and look to temporarily lay off their employees. As an employee, you should be aware that there are strict rules around temporary layoffs.

Employers may only use temporary layoffs in limited industries, if the employment contract provides for it, or if the employee agrees to a temporary layoff. Under British Columbia’s Employment Standards Act, layoffs cannot be longer than 16 weeks (extended on 4 May 2020 from 13 weeks).

If the employee does not agree to being temporarily laid off, temporary layoffs are not a regular industry practice, and the employment contract is silent, the employee is likely then entitled to severance pay.

If an employee agrees to a temporary layoff, they should be very clear that they are only accepting a temporary layoff as a one-off, that they do not agree to temporary layoffs in the future, and that the intention is that the employee will return to work as normal as soon as possible. We recommend all communication regarding the temporary layoff be in writing.

While temporarily laid off, an employee can apply for EI benefits and the Canada Emergency Response Benefit.

If an employee refuses to accept a temporary layoff or the terms of a temporary layoff, this may terminate the employment relationship and the employee may be entitled to severance pay. Similarly, if the layoff extends past 16 weeks, this too will likely trigger severance pay.

Constructive Dismissal in Employer Lay Offs

Where the employer fundamentally changes an employee’s employment conditions, including hours of work or pay, the employee may be entitled to consider the changes to their employment as a constructive dismissal.

Some employees, such as certain professionals, are not covered by the Employment Standards Act. In this instance, the employer may only temporarily lay off an employee if temporary layoffs are provided for in the employment contract. If the employment contract is silent, the employee may consider the employment relationship to be terminated and may be entitled to severance.

For federally regulated employees, the Canada Labour Code and the Canada Labour Standards Regulations apply, which allow for a temporary layoff of three months or less. The employee should also refer to their employment contract or collective agreement.

If you have been temporarily laid off, we recommend speaking to a lawyer about your situation to discuss whether it is a lawful temporary layoff or whether you are entitled to severance.

DISCLAIMER: The content of this article, and this website generally, is not intended as legal advice and cannot be relied upon as legal advice.  To provide legal advice on your problem, a lawyer must first understand your specific situation.

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