I\u2019ll say this again: Layoffs.<\/p>\n
Whether you\u2019re an employer or employee you have likely had your share of exposure to the aforementioned concept in the last few weeks on social media. There is a great deal of chatter about \u201cbeing laid off.\u201d Indeed, \u201claid off due to COVID-19\u201d or \u201cCOVID-19 layoff\u201d are now commonly searched phrases given the troubling downturn in the economy because of the pandemic. In fact, what a \u201clayoff\u201d actually means has been a source of confusion for my clients for years, employers and employees alike. Indeed, this confusion is compounded by definitional idiosyncrasies in Service Canada\u2019s Record of Employment (\u201cROE\u201d) codes, which do not entirely correspond to certain employment law concepts at the provincial level, including the notion of a \u201clayoff.\u201d In consequence, I have decided to join the chorus of numerous employment lawyers in an effort to clarify what a \u201clayoff\u201d actually means.<\/p>\n
First and foremost, one has to understand that absent an enforceable contractual term, an employer cannot simply tell its employee that there is no work and that if there is work on a certain date in the future the employee would be able to continue his or her employment at that time. In common employment law parlance, such a state of affairs would amount to a \u201cconstructive dismissal\u201d and entitle the employee to statutory and common law compensation because the employment agreement would be at an end.<\/p>\n
This is where the concept of a \u201clayoff\u201d comes in. A layoff is a cessation of work\u00a0not of employment<\/em>. This means that if\u00a0lawfully<\/em>\u00a0implemented, a layoff allows the employer to\u00a0pause<\/em>\u00a0work without pay and without it being deemed a breach of the employment relationship (i.e. termination). It will allow the employer to essentially put work \u201con hold,\u201d and not have to pay the employee their salary during this period of a temporary break.<\/p>\n Most of the employer clients who come to see me confidently tell me that the employee who is now suing them will not succeed as they had \u201claid off\u201d him or her in accordance with the law. They proceed to voice their displeasure with having to deal with a civil action merely for following what is set out in the layoff provisions of the\u00a0Employment Standards Act (\u201cESA\u201d)<\/em>. This is the moment when I usually ask them if they have a written employment agreement with the said employee that sets out that they may layoff him or her in accordance with the\u00a0ESA<\/em>. Overwhelmingly (and expectedly) the answer is \u201cno.\u201d<\/p>\n Therein lies the second misunderstanding: a layoff is not lawful\u00a0even if<\/em>\u00a0the employer\u2019s \u201clayoff\u201d is otherwise conducted in compliance with the\u00a0ESA<\/em>. This is because the right to layoff is found in contract, not statute. The\u00a0ESA<\/em>\u00a0is, of course, important for those employers governed by it. However, it does not\u00a0grant<\/em>\u00a0the right to layoff. Instead, it sets out the legal framework for\u00a0how<\/em>\u00a0to do so if the employer has such a right in the first place. Such a right has to somehow constitute a\u00a0contractual term<\/em>. Absent such a right \u2013 express or implied \u2013 the moment the employer \u201clays off\u201d an employee, they are facing the possibility of a constructive dismissal action. This is a tough pill to swallow but this is the current state of affairs in Ontario. It is rarely if ever an issue in the unionized setting where a layoff is usually spelled out in the collective agreement.<\/p>\n A final word on ROEs. I have stated at the outset that some definitions are not entirely consistent with some provincial employment law concepts and \u201clayoff\u201d is one of them. For instance, whereas a ROE\u2019s \u201cCode M\u201d stands for \u201cdismissal,\u201d \u201cCode A\u201d stands for \u201clayoff.\u201d However, Code \u201cA\u201d is also interpreted as letting an employee go in the event the position has become redundant or eliminated or if there is a temporary or permanent shutdown of operations. In other words, \u201cCode A\u201d may be regarded as an actual termination for the purposes of employment insurance (\u201cEI\u201d). Moreover, to the extent that \u201cCode A\u201d is interpreted as an actual layoff, it would not shield the employer from a constructive dismissal lawsuit; instead, it would merely entitle the employee to EI benefits. Again, the logic is the same: if a layoff is not a contractual term then a civil action could be looming on the horizon.<\/p>\n Where does this leave us? If you are an employer seeking to layoff an employee be sure that your written agreement says you can actually or that you are relying on some sort of implied right to that end. If you are an employee who has been laid off, ask yourself if the layoff was legal.<\/p>\n","protected":false},"excerpt":{"rendered":" I\u2019ll say this again: Layoffs. Whether you\u2019re an employer or employee you have likely had your share of exposure to the aforementioned concept in the last few weeks on social media. There is a great deal of chatter about \u201cbeing laid off.\u201d Indeed, \u201claid off due to COVID-19\u201d or \u201cCOVID-19 layoff\u201d are now commonly searched […]<\/p>\n","protected":false},"author":3,"featured_media":1833,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15,12],"tags":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.zeilikmanlaw.com\/wp-content\/uploads\/2021\/06\/Layoffs-layoffs-layoffs-iStock-1219218371.jpg","_links":{"self":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts\/1645"}],"collection":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/comments?post=1645"}],"version-history":[{"count":0,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/posts\/1645\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/media\/1833"}],"wp:attachment":[{"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/media?parent=1645"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/categories?post=1645"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.zeilikmanlaw.com\/wp-json\/wp\/v2\/tags?post=1645"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}