Carscallen Blog

COVID-19 Employment Law Considerations: Temporary layoffs in Alberta and EI benefits

Posted by Carscallen LLP on Mar 25, 2020 2:14:04 PM

Written by Catherine A. Crang and Hema Ahuja

As COVID-19 continues to slow the economy, many places of employment across Alberta are now temporarily closed, including bars, restaurants, retail establishments, fitness facilities, schools and daycares, offices, and public spaces (such as theatres, cinemas, libraries, sports arenas etc.).

Additionally, Alberta has declared a state of emergency under its Public Health Act[1] and has instituted public health measures to stop Albertans from spending time in large crowds and crowded spaces. These measures include:

  • all events over 50 people are cancelled;
  • recreational centres, casinos, bingo halls, bars, theatres and other facilities have been ordered closed; and
  • sit-down restaurants are permitted to remain open at lower capacity (despite this, however, some restaurants have chosen to temporarily close).

For employees who are otherwise healthy but who are temporarily laid off, this will result in a loss of, or significant decrease to, their employment income in the coming weeks to months.

Temporary layoffs in Alberta

For businesses forced to close for an unknown duration of time or which are suffering economically, temporarily laying off their employees may be the only way to weather the economic storm wrought by this pandemic. Temporary layoffs in Alberta are governed by the Employment Standards Code[2] (the “Code”), which allows an employer to temporarily layoff an employee by providing the employee with a written layoff notice[3] for a period or periods not to exceed, in total, 60 days within a 120‑day period[4] (the “temporary layoff period”).

Temporary layoff notice

In Alberta, the Code requires that the temporary layoff notice must be in writing[5] and:

  • state that it is a temporary layoff notice;
  • state the date that the temporary layoff is to commence;
  • include a copy of sections 62-64 of the Code; and
  • include any other information provided for in the Employment Standards Regulation.[6]

Unless there is a collective agreement in effect, the temporary layoff notice must be given to the employee within the following notice periods[7]:

  • one week prior to the date the temporary layoff is to commence, if the employee has been employed with the employer less than two years; or
  • two weeks prior to the date the temporary layoff is to commence, if the employee has been employed with the employer for two years or more; or
  • as soon as practicable in the circumstances, if unforeseeable circumstances prevent an employer from providing the requisite notice.

Temporary layoff period

The notable difference between termination and a temporary layoff is that a temporary layoff maintains the employment relationship between the employer and the employee. If the temporary layoff period does not exceed 60 days within a 120-day period, the employer is not required to pay the employee termination pay.[8]

However, the temporary layoff period can be extended beyond 60 days within a 120-day period if the employer, with the agreement of the employee, pays 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 temporary layoff period may also be extended if there is a collective agreement in place that contains recall rights for the employee following a layoff.

Temporary layoff period that extends beyond 60 days

Note that if the temporary layoff period of an employee extends beyond a total of 60 days within a 120-day period, the employee will be deemed to have been terminated under the Code (although there are some exceptions).[9] In circumstances where an employee is deemed to have been terminated, that employee will be entitled to termination pay and potentially other entitlements.

Recall notice

When the employer would like to “re-start” the working relationship, the employer can request the employee return to work by providing a recall notice[10], which must:

  • be in writing;
  • be served on the employee; and
  • state that the employee must return to work within 7 days of the date the recall notice is served on the employee.

If the employee fails to return to work within 7 days of service of the recall notice, and the employer decides to terminate the employee’s employment as a result of such failure, the employee is not entitled to any termination notice or termination pay (or other entitlements).

Please note that temporary layoffs of employees involve a number of related legal issues, including potential claims of constructive dismissal by employees. We recommend all employers seek legal advice from a qualified employment lawyer before proceeding with any temporary layoffs in order to ensure their legal obligations are met and potential risks and liability are identified and discussed. 

Federal EI benefits available for employees

Using temporary layoffs, as opposed to unpaid or paid leaves of absence, should also allow eligible employees to collect federal Employment Insurance (“EI”) benefits during the temporary layoff period.

There a now a few different EI benefits available to employees affected by COVID-19, depending on their individual circumstances. For our discussion of the federal EI sickness benefits related to COVID-19, called the “Emergency Care Benefit”, please see this blog: Details of the Emergency Care Benefit can also be found here.

Emergency Support Benefit

The federal government announced an Emergency Support Benefit last week that is separate from the Emergency Care Benefit. The Emergency Support Benefit will be available in April for employees who become unemployed or have reduced hours as a result of COVID-19’s impact, but do not otherwise qualify for EI. Although the federal government has yet to release full details on the Emergency Support Benefit, eligible workers will be able to apply for it in April. More information on the EI Emergency Support Benefit for employees can also be found here.

EI Work Sharing Program

The federal government also announced temporary special measures related to the EI Work Sharing Program last week, to provide EI benefits to employees who agree to reduce their normal working hour as a result of developments due directly or indirectly to COVID-19, by extending the eligibility of such work sharing agreements to 76 weeks, easing eligibility requirements, and streamlining the application process for these benefits. Further details on the EI Work Sharing Program in relation to COVID-19 may be found here.

Regular EI benefits

Regular EI benefits are also available to employees who qualify for them, namely: those who have lost their job through no fault of their own, including lay-offs, and who have worked for the requisite number of hours in the past 52 weeks. Regular EI benefits can be applied for here.

Carscallen LLP’s Employment Law Expertise

We understand that the rapid emergence of COVID-19 means that many employers and employees are dealing with a myriad of legal issues. Please contact us if you have any legal questions in connection with COVID-19, or any other legal employment matters. Our lawyers routinely work remotely and will continue to do so during this time. We remain available to provide legal advice and guidance to clients for all issues that may arise during the COVID-19 outbreak.

Please visit our COVID-19 resources page for further updates.

Visit COVID-19 Page

 

 

*This update is intended for general information only on the subject matter and is not to be taken as legal advice.

 

[1] Public Health Act, RSA 2000, c P-37.

[2] Employment Standards Code, RSA 2000, c E- [Code]

[3] Code at s. 62(1).

[4] Code at s. 63(1).

[5] Code at s. 62(3).

[6] Employment Standards Regulation, Alta Reg 14/1997.

[7] Code at s. 62(2).

[8] Code at s. 63(1).

[9] Code at s. 63(1).

[10] Code at s. 64(1).

Topics: Employment, Labour and Human Rights Law, Covid-19

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