A Warning to Employers about Layoffs

If an employer wishes to temporarily send an employee home without firing that employee, a layoff may be the way to go.  It’s especially effective for unionized employees with collective agreements that allow for layoffs.  It’s a useful way to reduce payroll and limit the size of the workforce for a short period of time. But, what happens with non-unionized employees?  That depends on their employment contract.  As an employer, if you’re betting on the Employment Standards Act to justify a layoff, you may be in for a big surprise.


The Laws of the Layoff


According to the Employment Standards Act of BC, it would seem that employers have the right to temporarily layoff employees for a period of up to 13 consecutive weeks.  Unfortunately,  some employers who come to rely on this law may also abuse it by laying off employees, then calling them back to work (one day short of 13 weeks), only to impose another temporary layoff shortly thereafter.  Employees in such situations still have a job; there just isn’t steady work or pay to go along with it.  This may sound like an informal dismissal of sorts, and for some “unwanted” employees, it certainly sends that message.  As it seems to indicate in the Employment Standards Act, the employer can layoff with impunity; but the Act isn’t the only employment law of the land.


Employment law in British Columbia is operated by two legal regimes simultaneously: the Employment Standards Act and the common law.  The Act can amend and impose basic standards in every employment contract.  Its terms are easily accessed and understood in a general sense by almost everyone.  The common law is much more complicated; unless you’re a legal professional, it’s unlikely that you will interpret or comprehend it correctly. The common law supersedes the Act; and regarding temporary layoffs, the two regimes differ.


Temporary Layoffs and the Common Law


The right to work and receive wages for that work is a basic fundamental right. A layoff occurs when an employee is sent home without the right to go to work or to be paid for that work for a temporary period of time.  This can have a devastating effect on an employee.  A layoff can also destroy the essential terms of the employment contract. It’s for these reasons the common law states that unless the employment contract in question specifically allows for a temporary layoff, any temporary layoff imposed by the employer constitutes a breach in contract. 


When a Temporary Layoff is Viewed as a Dismissal


If an employer issues a layoff without the contractual right to do so, it’s viewed as a dismissal at common law.  This means the employee can claim damages, regardless of what the Employment Standards Act may seem to say.  The common law courts have ruled that when the Act refers to temporary layoffs, it does so only indirectly and by implication.  To the layperson, it may seem that the Act gives employers the specific right to lay off, but it doesn’t.  The common law prevails, providing employees with a certain degree of protection.


Don’t risk making your own interpretations about the law, contractual language or the Employment Standards Act of BC.  Contact BC Employment Lawyer, Bob Yeager to ensure your bases are covered by both legal regimes.


Recent Posts

Not every employee has a written employment contract as proof of their employment. In fact, the opposite is more commonplace than most people would guess. Many employees are hired verbally, without any physical documentation outlining the terms of their employment. This is fine if everything runs smoothly in the workplace. But if it doesn’t, it […]
It’s a hotly debated and highly complicated situation when interpreting the differences between the independent contractor and the employee. They’re often swimming around in the same waters, especially in long-term arrangements where services are provided in the workplace.  On the other hand, from a legal point of view, they couldn’t be more different.   “Although […]
As mentioned in the previous article about  employment contracts and independent workers, there are many misconceptions regarding what it is that defines an independent contractor from an employee.  If your employment arrangement comes to an unhappy end and you wind up in court, the legal status of your agreement will be in question.   Employment […]