August 13, 2020

McLennan Ross Update for Thursday

By McLennan Ross Labour & Employment Team

What we are seeing

  • The Alberta Ministerial Order 18.2020, which modified layoffs, group terminations, scheduling notice, and Personal and Family Responsibility Leave, expires on August 14, 2020. In its place, certain parts of Bill 32 relating to the Employment Standards Code take effect on August 15, 2020. These new provisions include the following:
    • the new temporary layoff provisions, under which temporary layoffs do not become terminations until there are one or more periods exceeding 90 days of layoff with a 120-day period. Note: the new layoff provisions that no longer require notice of layoffs do not become effective until November 1, 2020;
    • a continuation of the COVID-19 layoff provision, under which a layoff does not become a termination until more than 180 consecutive days;
    • the permanent changes to group termination, which require 4 weeks' notice to the Minister of Labour only where an employer is terminating 50 or more employees at a single location within a 4-week period;
    • the changes in respect to variances and exemptions.
  • Other changes to the Employment Standards Code introduced in Bill 32 do not become effective until November 1, 2020. This includes changes in respect to the timing of termination payments, the new provisions on deductions from employee pay, changes in respect to rest periods and scheduling, the new averaging arrangements, the new calculation for holiday pay, and the removal of layoff notice. 

What we are hearing

  • Generally, mask bylaws are becoming increasingly commonplace across Alberta. These bylaws regulate the use of masks in public places, but generally do not apply to private areas such as the workplace, unless the public can access the workplace, even if required to pay an entry fee to do so. 
  • That the bylaws do not apply to private workplaces is logical. An employer has the legal obligation to provide a safe workplace for employees. The Chief Medical Officer of Alberta has provided numerous and detailed guidance documents for businesses of all types in Alberta that have been permitted to reopen. As the employer can and must control its workplace, it has the ability, unlike in a public setting, to mandate social distancing and the required cleaning and disinfecting.

What we are saying
  • It has now been over 140 days since the public health state of emergency was declared in Alberta and employers began issuing notice of temporary layoff under Sections 62 to 64 of the Alberta Employment Standards Code. As the economy in Alberta remains poor, employers are considering what to do once the 180-day maximum temporary layoff period for COVID-19 related layoffs approaches.
  • Employers are concerned about not being economically able to recall all employees, yet do not want to terminate the employment relationship, lose the service of some employees when the business does develop a need for them, and also have to provide a severance package. To avoid a termination and continue to take advantage of the layoff provisions, we have been asked how long an employee must be actively working after being recalled from a temporary layoff before a new layoff notice can be issued. 
  • Section 62 of the Employment Standards Code used to permit layoffs up to 60 days without qualification, and the concern about abuse of the provision was identified in a 2003 Court of Queen's Bench decision that considered Sections 62 to 64 as they were written. The Court commented on the provisions being potentially abused by employers to continually recall and layoff employees to avoid having to provide notice of termination or termination pay; however, the Court did not opine on whether such actions would be contrary to the legislation. 
  • On appeal, the Court of Appeal recognized that the legislation as written permits a temporary layoff "and the employee has no assurance that if he or she returns to work for a period of time, for example 10 days, that the layoff will not recommence thereafter", which seems to again identify the potential of back to back layoffs without commenting on the propriety of such actions by employers. 
  • Perhaps to address this concern, Section 62 to 64 were amended in 2017. One of the changes was to limit the permitted layoff period from 60 days to less than "one or more periods exceeding, in total, 60 days within a 120-day period". The 2017 amendments allowed for an extension of the layoff period, but only if the employer paid the employee "wages or an amount instead of wages" or "makes payments for the benefit of the laid-off employee in accordance with a pension or employee insurance plan or similar plan". The recent amendments to the Code resulting from the passing of Bill 32 keeps the provision the same as the 2017 amendments. However, it increases the permitted lay off period from 60 days to 90 days within a 120-day period. 
  • The temporary COVID-19 amendment to Sections 62 to 64 of the Code are analogous to the pre-2017 provisions as it states that a layoff can last up to 180 days and is silent about how long an employee must be actively employed before being eligible to be laid off again. As such, it is arguable that so long as the layoff continues to be related to COVID-19, an employee can be temporarily laid off again after a short period of active employment. As much as the court decisions commented on such actions as being a potential abuse of the legislation, neither decision said such use would be unlawful and neither were considering the legislation in the context of a pandemic. Further, the Alberta Government must have been aware of these two decisions and the basis for the 2017 Code amendments, as exemplified by the wording of the further amendments in Bill 32. 
  • As a result, subject to the second layoff continuing to be genuinely caused by the impact of COVID-19, the legislation appears to allow for a new temporary layoff after a short return to active employment. Employers need to be mindful that doing so may appear artificial and could lead to a challenge by the aggrieved employee. It is also possible new layoffs could be determined to fall under the normal layoff provisions instead of the COVID-19 layoff provisions. 
  • We again caution that it is still unclear whether a temporary layoff under the Code would constitute constructive termination at common law, which we discussed back in March, 2020 here

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