In Alberta, specific provisions of the Employment Standards
Code (the "Code") allow employers to
temporarily lay off employees for up to sixty days. Employers are
likely to do so during uncertain financial times, when demand for
work is dwindling, and the outlook for the future is unpredictable.
Pursuant to the Code, an employer can suspend the
employment relationship with its employees for up to sixty days, at
which point termination pay is provided if the employees are not
called back to work.
The Alberta Court of Appeal's Interpretation
In Vrana v Procor1
("Vrana") the Alberta Court of Appeal found that
pursuant to the provisions in the Code, employers must
provide some form of notice to employees prior to a temporary
layoff. The court held that notice should be provided in order to
uphold the "spirit" of the Code, namely open
communication between the employer and employee, which includes an
understanding of each other's rights. In Vrana the
court found that an employer had not provided sufficient notice to
the employee prior to the layoff, and allowed the employee to bring
an action for constructive dismissal against the employer. It
follows that if sufficient notice is provided to employees prior to
a temporary layoff, then the employee's common-law right to sue
its employer for wrongful or constructive dismissal is suspended
for the duration of the sixty-day period provided for under the
temporary layoff provisions in the Code.
Ontario and British Columbia Differ in their Interpretation
This issue has been interpreted very differently by the courts
in Ontario and British Columbia. In Style v. Carlingview
Airport Inn2 ("Style") the
Ontario Divisional Court considered a similar provision in
Ontario's employment standards legislation. The court found
that a temporary layoff did not suspend or limit the employee's
common law right to bring a claim for wrongful or constructive
dismissal. The court emphasized that an employee's common law
rights were not limited or restricted simply because an employer
applied provisions of the employment standards legislation.
According to the Ontario court, meeting employment standards
minimums does not, in and of itself, provide employers with a full
defence against an employee's common law rights. Similarly, in
Collins v Jim Pattison Industries Ltd.3
("Collins"), the British Columbia Supreme Court
interpreted its comparable provision of British Columbia's
employment standards legislation. In Collins the court
found that the legislation did not create a statutory right
allowing all employers to temporarily lay off its employees.
Instead it found that the legislation merely served to qualify
employee agreements that already included layoff provisions.
The Alberta Court of Queen's Bench accepted the reasoning of
the British Columbia and Ontario courts when it rendered its
decision in Turner v. Uniglobe Custom Travel
Ltd.4 ("Turner"). In this case
the court found that an employee's common law right to bring an
action against its employer for wrongful dismissal was not
suspended simply because the employer had applied sections 62 to 64
of the Code. While Turner has not been appealed
(and Vrana remains the current state of law on this matter
in Alberta), it is interesting to consider the various
interpretations across Canada on this issue, and it is likely that
this issue will be reexamined at some point in Alberta.
What do employers need to know?
Employers should provide employees with notice prior to advising
them that they are being temporarily laid off. While the Alberta
Court of Appeal in Vrana does not expressly insist that
the warning be in writing (nor does it describe how much notice is
"sufficient"), it does state that employees must be
properly advised of the employer's intentions, and that notice
should include both the fact of the temporary layoff and the
relevant sections of the Code (sections 62 to 64)
explaining the effect of the layoff.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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