Temporary Layoffs – Guide For Employers & Employees

You were laid off? Oh no! That’s awful. I’m so sorry. You know what, they never appreciated you the way you deserve. What a lousy bunch of – temporarily? Ohhhh. Huh. So, you’re not fired? Ok. Refresh my memory on this whole temporary layoff thing!

What Is A Temporary Layoff?

Chances are, you’ve heard of temporary layoffs. Maybe you’ve wondered if this could happen to you and, if it did, what exactly that would mean.

A temporary layoff is the cutting back or complete cessation of an employee’s employment with the understanding that they will be called back to their full-time position within a specified period of time. A temporarily laid off individual is still considered an employee, even if they are not working. This can mean that they are not working at all, or even simply earning less than half of their regular wages.

Temporary Layoffs – A Solution for Hard Times

A temporary layoff is a way mitigate economic hardship for both employer and employees. Temporary layoffs are often brought on by things like economic downturn, shortages of work and seasonal employment.

Temporary layoffs are most common in union environments where collective bargaining agreements determine the parameters of a layoff such as which employees are the first to return to work.

A temporary layoff allows employers to avoid severance or termination costs as long as the employee is recalled to work within 13 weeks of the layoff’s commencement. Though it would certainly be appreciated by their employees, employers have no obligation to provide notice of a layoff. Additionally, employers are not required to give termination notice until the last day of the layoff should it become clear that the layoff will have to become permanent.

Contractual Agreements and Temporary Layoffs

The parameters of temporary layoffs are set out in the Employment Standards Act (ESA). However, the ESA doesn’t give employers the right to enact them. The right to temporarily layoff an employee must be contractually stated, either in the employment contract or the collective bargaining agreement.

If an employee is temporarily laid off without a provision for this in their contract, the layoff would be considered a constructive dismissal and the employee would be entitled to seek damages for wrongful dismissal.

Wrongful dismissal charges may be avoided if the laid off employee is immediately recalled to their former position. Furthermore, some courts have found that employees who refuse to return to their position after a non-contractual layoff will be found to have failed in their duty to mitigate their damages.

If the power to perform temporary layoffs was not in written agreement at the time of hire and an employer wishes to pursue this option, they should approach their employee with a written proposal for a temporary layoff. It is possible that the employee will choose this over termination, especially since employees can usually collect Employment Insurance benefits during a layoff.

How Long Can Temporary Layoffs Last?

A temporary layoff can last up to 13 weeks in a consecutive 20-week period. However, if a layoff exceeds this 13-week period it will become a termination at which point the employee will be entitled to termination pay in lieu of notice with the first day of the layoff becoming the date of termination.

However, the ESA provides that a temporary layoff may be extended to as long as 35 weeks if:

  • The employee continues to receive substantial payments from the employer,
  • the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan,
  • the employee receives supplementary unemployment benefits,
  • the employee is employed elsewhere during the lay-off and would be entitled to receive supplementary unemployment benefits if that were not so,
  • the employer recalls the employee within the time approved by the Director, or
  • in the case of an employee who is not represented by a trade union, the employer recalls the employee within the time set out in an agreement between the employer and the employee; or

If an employee quits before a layoff is over they are not owed severance or termination packages but may still be entitled to accrued benefits such as vacation pay.

Temporary Layoff Legal Experts

Employers should always seek legal counsel before temporarily laying off an employee. To speak with an experienced employment lawyer about temporary layoffs or any other employment law matter, call us at 905-639-0999 or click here to book your consultation.

Force Majeure, Frustration of Contract and COVID-19

In less than a month, the novel coronavirus has led to the cancellation of most sporting events, music festivals and international air travel. The pandemic has led to the disruption of a wide range of supply chains, the closure of thousands of schools, public places and ‘non-essential’ businesses. Most Canadians are being encouraged to stay home as much as possible. Many businesses both locally and globally are finding it difficult or even outright impossible to fulfil their contractual obligations.

Given the drastic and ongoing disruptions caused by COVID-19, many employers may be wondering about their ability to meet their various contractual obligations and if their current circumstances could trigger a frustration of contract or a force majeure clause if they have one.

Below, we explore the differences between frustration of contract and a force majeure clause and consider how each of them may be applicable given the current coronavirus pandemic.

Force Majeure Clause

A force majeure clause is a civil law tool that employers can rely on to exempt them from their contractual obligations in the event of a war, damage to facilities, natural disaster or other extraordinary crises that could fall under the broad category of Acts of God.

In 1975, the Supreme Court of Canada defined an Act of God as “a supervening, sometimes supernatural, event, beyond control of either party, that makes performance impossible.”

As with an event that triggers a frustration of contract, a force majeure must be unexpected and beyond any reasonable control of either party. It is not meant to absolve employers of normal business risks such as economic shifts, as was illustrated in the case of Domtar Inc. v. Univar Canada Ltd. In this case, Univar, a caustic soda supplier for Domtar, invoked a force majeure clause in response to a dramatic rise in the global cost of caustic soda and demanded Domtar to pay a higher price for their supply. Domtar did so, but later successfully sued Univar for reimbursement of their overpayment.

Force majeure clauses can be vague and leave open to interpretation what exactly qualifies as an Act of God. Or, a force majeure clause can be specific and include a detailed list of what circumstances – such as acts of terrorism, war, labour disputes, pandemic etc. – will be considered worthy of contractual annulment. The level of specificity in a force majeure clause can be a benefit or a burden depending on the situation. For example, if you have a highly detailed list of circumstances that constitute a force majeure, and something extraordinary happens outside this list, you may not be covered. However, if something happens that your clause clearly details, you will likely have less difficulty in invoking the clause.

Frustration of Contract

Frustration of contract takes its origins in English common law. The legal doctrine acknowledges that sometimes unexpected things happen that can make it impossible (not just difficult) for an employment contract to be executed.

Frustration of contract recognizes a contract as ending through no fault of either party but rather as the result of unforeseen circumstances beyond anyone’s control.

Frustration of contract arises from extraordinary events or circumstances such as an accident, changes to the law or some sort of Act of God (similar to a force majeure) like an earthquake, hurricane or some other natural disaster – such as a pandemic.

Frustration of contract relieves both parties of their contractual obligations. When a contract has been frustrated it can be terminated without liability to either party, meaning that neither party is entitled to damages.

Frustration of contract is usually pursued when there is no force majeure clause in an employment agreement and is generally more limited in its applications.

Frustration of contract is largely dealt with in the courts on a case-by-case basis. For a more detailed look at frustration of contract, click here.

Can the COVID-19 pandemic trigger frustration of contract or a force majeure clause?

As the disease continues to spread exponentially and lawmakers at every level of government are either urging or outright requiring Canadians to stay home and non-essential businesses to close, not to mention significant disruptions to supply chains and international travel, and it would seem that contractual operations of all kinds are becoming difficult or impossible to fulfil.

If the ongoing COVID-19 pandemic is impacting your ability to fulfil your contractual obligations, contact KCY at LAW to discuss your situation and if you may be able to invoke your force majeure clause or pursue frustration of contract. Call us at 905-639-0999 or click here to book your consultation.

Illegal Interview Questions: What They Are And What To Do About Them

Are you married? How old are you? How’s your health? Have you ever been arrested? What country are you from? Do you like to drink?

These are probably not questions you want to be asked by someone you barely know, let alone by someone determining your future employment. These prying inquiries may be a faux-pas in polite conversation but they are an absolute no-go in the context of a job interview.

Illegal Interview Questions

Sometimes, versions of these questions may come up casually and innocently in the context of a job interview as employers want to make sure that you will also be a good fit for the company. However, Canadian human rights law prohibits interviewers to ask questions concerning:

  • Country/place of origin and citizenship status
  • Religion, faith or creed
  • Age
  • Gender or sexual orientation
  • Race or ethnicity
  • Family structure, children or marital status
  • Mental or physical health and disability
  • Appearance, height and weight
  • Pardoned offences

With very limited exceptions, it is forbidden to ask questions about any of these topics at any point in the hiring process. Questions should only seek information relevant to the candidate’s ability to perform the job for which they are applying.

How To Deal With Illegal Questions During An Interview

In interviews, passing references to some of these topics may come up – “sorry to delay, my kid is sick and was on the phone, you got kids?”

It is also regrettably possible that an interviewer may make glaringly inappropriate inquiries – “We’re looking for someone committed, do you plan on having children in the future?”

It is up to you to decide in that moment how you want to deal with the situation. Depending on the circumstances, you might not want to stop the interview in its tracks and instead decide to deflect or even directly answer the question. Some options when confronted with this situation are:

  1. “My [family status/country of origin etc.] does not affect my ability to perform this job.”
  2. “I’d prefer not to answer this question unless there is a particular reason why it is relevant.”
  3. “Can you please explain to me how this is applicable to my performance of the job?”

The trouble with certain inappropriate questions is that, even if they were asked in passing and without mal-intent, they leave open the question of what role your answers to them played in the hiring process.

Kartuzova v HMA Pharmacy Ltd.

According to the Ontario Human Rights Tribunal (OHRT), simply asking improper questions is enough to prove discrimination. Such was the case with Kartuzova v HMA Pharmacy Ltd. In this case, Kartuzova applied for a position as a pharmacy technician and was denied the job after an interview ended suddenly following questions about her family and marital status, financial situation, and how she came to Canada. Kartuzova said she had felt obligated to answer these questions and that the tone of what had otherwise been a very positive interview changed abruptly following her answers. The OHRT ruled that the questions Kartuzova had been asked were in violation of the Human Rights Code and ordered the pharmacy to pay her $4,000 for loss of dignity and $496.13 for lost wages.

Employment Law Experts

If you have been asked inappropriate or discriminatory questions during an interview that you felt affected your employment offer, KCY at LAW can help you to register a claim with the OHRT to seek compensation for your lost opportunity. Call us at 905-639-0999 or click here to book your consultation.