Seek legal advice when facing a COVID-19 shutdown layoff

By LegalMatters Staff • With the coronavirus shutdown creating uncertainty for millions of Canadian workers, it only makes sense to consider all your options when caught up in a forced layoff, says Toronto employment lawyer Ellen Low.

Low, principal of Ellen Low Employment Law, says workers face “many moving pieces and strategies” when dealing with the fallout from the pandemic, so getting the correct information is essential to making an informed decision.

“Seek advice,” she tells LegalMattersCanada.ca. 

Low says the employment landscape has been thrown into turmoil at an unprecedented rate.

Challenging time

“There’s been a lot of change in a really short time,” she notes. “To add to that, courts are closed, so we are not getting any jurisprudence or interpretation about what this all means. Employment lawyers get many questions and it can be a challenge to provide answers in some cases.”

Of course, it’s not only workers who are facing dark days, Low says.

“It’s a terrible time for employers. They are trying hard to figure out what they can do to keep the lights on and also get some money to their people, especially the small business owners I represent,” she says.

“They’re exploring such things as supplementary benefits, workshare programs, they are trying to get some clarity on who is entitled to Employment Insurance (EI) regular benefits, who is entitled to EI sickness benefits and how does the new statutory protected leave fit in.”

Low says she has heard many misconceptions involving layoffs so it is important for workers to understand their rights under the province’s Employment Standards Act (ESA).

“It’s not illegal to put someone on layoff. A lot depends on the employee’s contract and a lot can depend on the industry in which they work,” she says. “A blanket statement that it is illegal, however, is misleading.

ESA provisions

“In Ontario, there is a temporary layoff provision within the Employment Standards Act. Where it gets confusing is that unless that right to put someone on layoff under the ESA is expressly included in the employee’s contract it is not otherwise implied that the employee will agree to accept it.”

Temporary layoffs are permitted only if the provision is written into the worker’s employment agreement, Low says, and even then “if the employer is going to rely on that they ought to bring it to the employee’s attention” at the outset.

“It’s a term of employment that you either agree to when you are hired or you can try to negotiate it out or frankly you can reject it,” she says.

Low says there are exceptions to the rule, such as industries where layoffs and recalls are common, such as construction, manufacturing or seasonal work.

‘Implied term of contract’

“Sometimes it is pretty common to go on layoff and recall. It’s an implied term of the contract,” she says. “You can expect to be put on layoff but you can also expect to be recalled.”

Even though workers sign contracts, they may not completely understand the ramifications of what they have agreed to or their rights under the ESA, Low says.

“That is a question mark. It is surprising to me what people do and don’t know with respect to their employment agreements,” she says.

A worker has the right to accept a temporary layoff with the expectation that they can return to work if the employer is able to resume business, says Low.

“Other people may take the position that the temporary layoff constitutes a termination of employment because the contract doesn’t allow for it, and then we’re into a discussion about what does the notice period looks like in the time of quarantine for coronavirus,” she says.

People should consider their alternatives when faced with a temporary layoff or have been asked to temporarily take a reduced salary, Low says.

“First you should consider whether to accept a layoff or whether you want to do a little negotiating or seek self-clarity in terms of that layoff,” she says.

No blanket solution

There is no one blanket solution when it comes to such job losses, Low says, adding it comes down to achieving “the most strategic outcome for the client.”

“That is the challenge because unfortunately, it’s a case by case assessment,” she says. “It really depends on the individual contract of employment, it depends on the industry and then there is the question of what the worker wants to achieve.

“Do they want to continue the employment relationship or if you are not entitled to be put on layoff, do you want to sever that relationship now and start talking about a severance package?”

Low says workers should not be afraid to ask the tough questions.

“Weigh your options. Do you have to accept a temporary layoff at all? If you don’t accept it what happens? What rights do you have while on layoff? Are you willing to wait until after the time period to see if you are recalled?” she says. “It is a good time to get some advice.”