If a dismissal can be established, then it’s important to look at what sort of pay in lieu of notice an employee would be entitled to. Normally, we can estimate a notice period with a fair amount of certainty. However, this a bit of an unknown right now because we don’t know how long this pandemic/shutdown is going to last and how hiring will ramp back up once things resume afterwards. (You can find more general information on how to determine the length of a notice period and severance in one of my previous columns here).
For those thinking about taking the leap and calling their layoff a termination, I would also add that although the case law to date is fairly accepting of the proposition that laying off an employee can amount to a termination if there isn’t any agreement allowing for the layoff, we have never seen a situation like this one with COVID-19. The case law on a layoff as a constructive dismissal is based on very different circumstances. The first few legal decisions on these pandemic layoff cases will need to deal with whether these unique circumstances alter this longstanding common law concept. I think it will be interesting to see if judges feel that the concept should be interpreted differently or modified given these unprecedented circumstances. With so many employees being laid off right now, even if only a small percentage choose to take the layoff as a dismissal, this would amount to thousands of cases that the courts will need to deal with in the coming months.
I’m a business owner. Does the Employment Standards Act allow me to lay off employees?
I’ve been asked this a lot recently. The answer is “yes and no.” Yes in that the Act does include language, at section 56, stating that an employer can lay off an employee—but no in that the Act doesn’t get you out of your common-law obligations, specifically the constructive dismissal concept mentioned above.
This can be confusing, but it is important to understand that the Employment Standards Act does not give you the blanket right to lay off employees.
I’m a contractor and not an employee. How does employment law affect me?
If you are an independent contractor, this isn’t an employment law issue. Take a look at what your contract to provide services says about termination, and that is your answer.
A word of caution: You might not actually be an independent contractor; instead, you might be a dependent contractor. A dependent contractor who no longer gets any hours of work from their “client” is in a situation that is very similar to an employee, in that the suspension of service without any authority to do so may well amount to a breach of the contract. There is the federal government’s Canada Emergency Response Benefit that is very similar to EI that you would apply to for payments while you are not working, though details are still being laid out. I’ll follow up with another column on this subject in the next few weeks, which will help clarify some of these issues when more details are known.
Scott Hawryliw is a civil litigation lawyer with SRH Litigation in Barrie, Ont. He helps clients with legal problems related to injuries, employment, and business issues and can be reached at [email protected]
If you have an employment-related question you’d like Scott to answer in a future column, please email it to [email protected]