On November 9, 2020, amendments to the Canada Labour Standards Regulations (the “Regulations”) came into force to further extend the temporary layoff periods for federally regulated, private-sector workplaces. These extensions provide employers with more time to recall laid off employees before their employment is deemed to be terminated. The layoff periods were previously extended in late June.
Prior to the extensions, the Regulations allowed employers to lay employees off for up to three months, or up to six months where the employer notified the employees in writing at or before the time of layoff that they would be recalled on a fixed date or within a fixed period, before the layoff is deemed to be a termination of employment.
The newly amended Regulations have extended the permitted layoff periods as set out below.
Employees laid off before March 31, 2020
- Layoffs without a recall date or fixed period: If an employee was laid off between March 22 and March 31, 2020, the employer has 12 months to recall the employee before the layoff is deemed to be a termination of employment.
- Layoffs with a recall date or fixed period: If an employee was laid off before March 31, 2020 with a recall date or for a fixed period, the employer has until March 31, 2021 or 9 months after the date specified in the written notice, whichever is earlier, to recall the employee before the layoff is deemed to be a termination of employment.
Employees laid off between March 31 and December 31, 2020
- Layoffs without a recall date or fixed period: If an employee is laid off between March 31, 2020 and December 31, 2020, the employer has until March 31, 2021 to recall the employee before the layoff is deemed a termination of employment.
- Layoffs with a recall date or fixed period: If an employee is laid off between March 31, 2020 and December 31, 2020 with a recall date or for a fixed period, the employer has until March 31, 2021 to recall the employee before the layoff is deemed a termination of employment, unless the written notice specified a later date or fixed period for the employee to be recalled.
Notably, these extended layoff periods will not apply to employees who:
- are covered by a collective agreement that contains recall rights and/or a minimum work guarantee;
- are on strike or locked out;
- are receiving employer payments or benefits during the layoff (e.g., contributions to a pension or insurance plan, supplementary unemployment benefits, or retention payments);
- were dismissed before the previous extensions came into force on June 22, 2020;
- were dismissed before these extensions came into force on November 9, 2020, because their employer chose not to apply the extensions that came into force on June 22, 2020; or
- are dismissed after December 31, 2020.
The Labour Program has made it clear that these amendments do not impact employees’ rights to pay in lieu of notice of termination, severance pay,and vacation pay upon termination. Employers will remain liable to pay employees their termination entitlements under the Canada Labour Code if their employment is terminated during a layoff period. In addition, the time that an employee is laid off will continue to count towards their length of service, and will thus be factored into any calculations for pay in lieu of notice of termination and severance pay.
The Labour Program has advised employers intending to use these extensions to inform their employees with written notice of the new recall date as soon as possible.
This blog is provided as an information service and summary of workplace legal issues.
This information is not intended as legal advice.