During the recession of 2008, many Alberta human resource
practitioners and general counsels had to address the impact of
employee layoffs. With the current state of economic matters and
the price per barrel of oil, many employers have made inquiries
regarding whether legal severance requirements have changed over
the last seven years resulting from the 2008 recession. We address
some of the most common questions below:
1. Has the Alberta Employment Standards Code changed
since 2008 regarding layoffs?
The simple answer is "no". The 2008 recession did not
cause the Legislative Assembly to amend the layoff provisions in
the employment standards legislation. Consequently, Alberta
employers are required to provide minimum statutory notice or pay
in lieu of notice, even in recessionary times.
2. Have common law requirements changed since 2008? In a
recession do common law notice requirements vary?
Again, the simple answer is "no". The employer still
has an obligation to provide reasonable notice if there is no cause
for the termination (absent a written employment agreement to the
contrary). Layoffs for economic reasons, including recession, do
not abrogate the obligation to provide notice or pay in lieu of
such notice at common law. The courts have consistently held that a
poor economy neither extends the notice period for the employee who
is seeking to find alternative employment, nor does it reduce the
employer's obligation to provide reasonable notice.
3. Can an employer avoid laying off employees by unilaterally
changing terms and conditions of employment downwards to reduce
Any unilaterally imposed change of working conditions can
potentially trigger a constructive dismissal at common law. This
includes unilateral changes to wages or other compensation even if
due to a dramatic change in economic conditions. In some
circumstances, the employee might be obliged to mitigate any loss
arising from the constructive dismissal by remaining employed
throughout the notice period and the employer chooses to provide
that option. But as a general rule, changing economic conditions do
not allow the employer to alter pre-existing terms and conditions
of employment without the consent or waiver of the employee.
4. What are the group layoff provisions under the Alberta
Employment Standards Code?
Most provinces, including Alberta, require that advance notice
of large scale layoffs be provided to the government before the
layoff date. This requirement is to allow the government to assess
the situation and prepare for the potential effects of a
large-scale layoff. In Alberta, laying off 50 or more employees
within a 4-week timeframe triggers the group layoff provisions
under the Code.
5. Can an employer select less productive employees for layoff
or possible retirement?
So long as the prohibited grounds under the Alberta Human
Rights Act are not infringed, the employer can select
potential employees for layoff. However, if the basis for the
selection of the employee to be laid off is in any way associated
with the employee's age, health issues, etc., this could
trigger a human rights complaint. Selection based on discriminatory
grounds could trigger an addition to a lawsuit for severance.
6. What can an employer do?
Generally speaking, the combination of employment standards
obligations, common law requirements and human rights
considerations all make selective layoffs more complicated than a
standard termination. Some employers have encouraged mutually
agreeable job sharing opportunities, offering reduced work weeks or
shorter work days, eliminating overtime where possible, etc. All
factors need to be considered on a case-by-case basis and should be
discussed with a legal advisor.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).