Coronavirus (COVID-19) Layoffs
If you are wondering whether your employer has the right to lay you off due to the coronavirus, the short answer is: probably not. This article explains why.
Throughout the world, private sector employers are engaging in an unprecedented number of layoffs, some permanent and some temporary. In addition to triggering a staggering stock market sell-off and bizarre toilet paper shortages throughout the country, the pandemic has also led many employers to shut down operations, engage in restructuring, and terminate tens of thousands of employees. In some cases, employers are cutting jobs in order to avoid financial ruin and possible bankruptcy proceedings; in other cases, less principled companies are using the rapidly spreading disease as an excuse to fire employees without offering them fair severance packages. In rapidly changing times like the present, it is essential that all employees know their rights in order to avoid falling victim to unfair and illegal terminations, whether they be temporary or permanent in nature.
The Law
Employment law in British Columbia is governed by three types of sources of law: contract law, the Employment Standards Act, and the common law. This article only looks at non-unionized workplaces. Unionized workers are less likely to fall victim to wrongful termination as they are backed by collective agreements and have shop stewards and other union officials to protect their interests. Non-unionized employees, however, are significantly at risk.
If you are facing termination or a “temporary” suspension of your employment contract, the first thing you will want to do is look at your rights and obligations under your contract of employment. Unless your contract explicitly permits your employer to suspend your employment in the event of an epidemic or other unforeseen event—this is legally referred to as a “force majeure” clause—it is unlikely that your employer has the right to temporarily lay you off unless you agree. If your employer tries to obtain your consent to a temporary layoff, call a skilled employment lawyer first. Otherwise, you may be throwing away your rights and may be giving up any entitlement to severance pay.
If your employer is permanently laying you off, then you will also want to look at your entitlement to severance under your contract of employment. Some employment contracts spell out how much severance pay you will be entitled to upon termination; however, other contracts are silent on this issue. Even if your employment contract appears to limit you to a small amount of severance, it is still worthwhile to have the contract reviewed by a knowledgeable lawyer. Oftentimes, there are ways to get around severance pay limitations in contracts.
While contracts are important, they are subject to the minimum standards set out in the Employment Standards Act in most cases. Unless you are in a specialized industry, such as a forestry worker or a lawyer, then chances are you have rights to minimum pay in lieu of severance under this legislation. It is generally illegal for an employer to attempt to use a contract to bypass these minimum standards.
Unlike other jurisdictions, the British Columbia Employment Standards Act does not authorize employers to engage in temporary layoffs. A layoff, whether permanent or temporary, is likely to qualify as a termination in British Columbia, thereby triggering entitlement to severance pay.
If your employer is offering you a temporary leave of absence as a result of the COVID-19 pandemic, either paid or unpaid, you should still be wary and consider contacting a lawyer to advise you on your rights. It may be that the temporary leave of absence, if you were to refrain from consenting to it, would constitute either termination or “constructive dismissal”, which could still lead to an entitlement for severance pay.
Depending on your circumstances, the wording of your contract of employment, and the nature of your employment, you may be entitled to significantly more severance pay under the common law than you would be under the Employment Standards Act. The common law is a body of case law developed over hundreds of years by judges, first in England and now in Canada. Under the common law, an employee who worked at a position for many years could be entitled to one month of pay for each year of service, or even more depending on the employee’s role at the company and the way in which the employee’s service was terminated. For higher-paid employees, this can easily amount to hundreds of thousands of dollars.
COVID-19
Employers, like everyone else, are facing uncertain times due to the emergence of the COVID-19 virus. Some employers simply do not understand their employment law obligations and believe that they are doing the right thing to protect their bottom line by laying off employees or putting them on unpaid leave. Other employers are using the virus as a justification for removing employees whom they have considered terminating for years. At ATAC LAW, we have seen both scenarios first-hand among our clients.
While employers deserve some sympathy in this time of upheaval—it can be difficult to run a company when supply chains are disrupted, customers are in quarantine, and stocks are plummeting—employees should not be giving them a free pass to break the law and take-away their hard-earned entitlement to severance.
At ATAC LAW, we understand the plight of employees in this difficult situation and are eager to help. Our talented employment law litigators are available to meet with you, either in person or by videoconference or teleconference in order to limit the spread of the virus, and to help you navigate the law and protect your rights. Call us today to arrange your initial consultation.
