Federal Government Extends Timelines for Temporary Layoffs for Federally-Regulated Employers to 2021

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Earlier in the summer, the Federal government announced the extension of legislated timelines for temporary layoffs under the Canada Labour Standards Regulations (the “Regulations”). The Federal government recently announced that these timelines would be further extended, meaning that federally-regulated employers will now be permitted to temporarily layoff employees in certain circumstances into the new year.

 

Pre-COVID-19 Timelines

Prior to the COVID-19 pandemic, the Regulations allowed federally-regulated employers to temporarily layoff employees in certain circumstances, including for up to three (3) months or up to six (6) months with provision of a recall date at the time of the layoff. During this time, the Regulations provided that the temporary layoff would not be deemed to be a termination of employment for the purposes of the Canada Labour Code. However, if the employee was not returned to work by the expiry of the applicable timeline, the temporary layoff would instead be deemed to be a termination of employment with all related entitlements including with respect to termination pay and/or severance pay.

 

Initial COVID-19 Timelines (June Amendments)

Once the pandemic hit Canada, the pre-COVID-19 timelines relating to temporary layoffs under the Regulations were quickly found to be insufficient to address the novel situation created by the virus in the workplace. Accordingly, by June, the Federal government had taken steps to amend the Regulations in order to provide greater flexibility to employers who might be required to temporarily layoff their employees for longer periods of time as a result of the pandemic.

The June amendments made to the Regulations are detailed in an earlier Focus Alert but briefly, they extended the permitted temporary layoff period for federally-regulated employers as follows:

  • Employees laid off for a period of three (3) months or less:
    • By six (6) months for employees laid off prior to March 31, 2020, or
    • To December 30, 2020 for employees laid off between March 31, 2020 and September 30, 2020.
  • Employees laid off for more than three (3) months with a fixed recall date or a fixed period within six (6) months, the fixed date or fixed period in the written notice is extended:
    • By six (6) months or until December 30, 2020, whichever occurs first, for employees laid off prior to March 31, 2020, or
    • To December 30, 2020 for employees laid off between March 31, 2020 and September 30, 2020, and where the fixed date or fixed period specified in the written notice occurs before December 30, 2020. If the fixed date or fixed period specified in the written notice occurs on or after December 30, 2020, employers will have until that recall date to return their employees to work.

 

Current COVID-19 Timelines (November Amendments)

Given the ongoing nature of the pandemic and the fact that it is anticipated to persist into (at least) next year while a vaccine remains under development, on November 9, 2020, the Federal government announced that it would again be taking steps to amend the Regulations in order to further extend the timelines associated with temporary layoffs thereunder.

The November amendments made to the Regulations further extend the permitted temporary layoff period for federally-regulated employers as follows:

  • Employees laid off for a period of three (3) months or less:
    • By nine (9) months after the day on which it would otherwise end for employees laid off before March 31, 2020 (for a total 12-month temporary layoff period), or
    • To March 31, 2021 for employees laid off between March 31, 2020 and December 31, 2020.
  • Employees laid off for more than three (3) months with a fixed recall date or a fixed period within six (6) months, the fixed date or fixed period in the written notice is extended:
    • By nine (9) months or until March 31, 2021, whichever occurs first, for employees laid off prior to March 31, 2020, or
    • To March 31, 2021 for employees laid off between March 31, 2020 and December 31, 2020, unless a later recall date or fixed period was provided in a written notice.

Just as with the June amendments, the November amendments are only intended to be temporary and will not apply in any of the following circumstances:

  • A temporary layoff that occurs at any time after December 31, 2020,
  • Where a unionized employee is laid off and the collective agreement contains specified recall rights or a minimum work guaranteed,
  • During a strike or lock out,
  • Where the employee continues to receive some payment or benefits from the employer,
  • Where the employee is receiving or is eligible for supplementary unemployment benefit payments, or
  • Retroactively, where the employee was terminated prior to June 22, 2020.

 

In Our View

Federally-regulated employers facing the tough decision to temporarily layoff employees during the pandemic should be mindful of the fact that despite any such layoff, the employee will continue to accrue service during this time. Consequently, in the event that the temporary layoff ultimately leads to a termination of employment, the calculation of an employee’s entitlement to termination pay and/or severance pay, for example, will have to include the period of layoff.

For more information on your rights and obligations as an employer dealing with COVID-19 or related matters, please contact Colleen Dunlop at 613-940-2734,  Steven Williams at 613-940-2737, or Kecia Podetz at 613-940-2752 .