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.
Footnotes
2. 1996 O.J. No. 705
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