British Columbia, Ontario, Alberta & Manitoba


All jurisdictions in Canada allow for temporary lay-offs, however, the legislation varies and it is important to consult an employment law specialist for advice appropriate to your company’s situation.

Any business considering temporary lay-offs during the Covid-19 crisis needs to be aware of the rules applicable in the home jurisdiction of their employees.  Generally, once a period of temporary lay-off has expired, an employee is considered to be terminated and severance is due. However, during the current pandemic, some provinces have made changes to their current rules on a temporary basis and it is expected that further changes may occur.  

British Columbia

Temporary lay offs are limited to 13 weeks within a 20 week period.  No advanced notice is required. There is no requirement to pay vacation pay during a temporary layoff.  Once the temporary lay-off period has expired, the employee is considered to be terminated and severance is owed.

A temporary lay-off begins when an employee earns less than 50% of normal weekly wages.  Normal weekly wages is defined as the average of an employee’s wages over the previous 8 weeks.  Therefore, a temporary lay-off can occur with a reduction in hours or income in any given week. For those employers who are choosing to reduce hours or income, it is important to be aware when the temporary lay-off clock begins.

There is no provision for extension of the lay-off period via the continuation of benefits.  However, continuation of benefits would likely be considered a factor in the employer’s favour should an employee file a constructive dismissal claim.

Should a lay-off last longer than 13 weeks within a 20 week period, severance is not required if the contract is frustrated or impossible to perform.  Under Covid, the closure of a business by government order may qualify under this provision of the act.

Ontario

Temporary lay offs are limited to 13 weeks within a 20 week period.  No advanced notice is required. There is no requirement to pay vacation pay during a temporary layoff.  Once the temporary lay-off period has expired, the employee is considered to be terminated and severance is owed.

The temporary layoff period can be extended to 35 weeks in 52 consecutive weeks if one or more conditions are satisfied.  The most common condition is the continuation of benefits. Premium sharing arrangements can continue either through a repayment agreement which will begin once an employee has returned to full salary or through the collection of post-dated cheques.  Some employers choose to pay the entire premium during the layoff period in order to extend the termination date to 35 weeks.

A temporary lay-off begins when an employee earns less than one-half  of ordinary weekly wages. Therefore, a temporary lay-off can occur with a reduction in hours or income in any given week.  For those employers who are choosing to reduce hours or income, it is important to be aware when the temporary lay-off clock begins.

Should a lay-off last longer than 13 weeks within a 20 week period, or 35 weeks within a 52 week period if benefits are continued, severance is not required if the contract is frustrated or impossible to perform.  Under Covid, the closure of a business by government order may qualify under this provision of the act.

Alberta

Employment Standards limits temporary layoffs to 60 days out of 120 days.  The Act also requires employers to provide advanced written notice of layoffs.  Providing one week of notice for employees with less than two years of service and two weeks of notice for employees with two or more years of service.  However, emergency relief measures have extended the period to 120 days for temporary layoffs occurring on or after March 17th, 2020. In addition, notice is not required if unforeseeable circumstances prevent an employer from providing the notice.  Alberta has deemed Covid-19 as meeting this criteria.

In addition, the temporary layoff period can be further extended if, by agreement with the employee, the employer:

  1. Pays the employee wages or an amount in lieu of wages OR
  2. Makes payments for the benefit of the laid off employee in accordance with a pension plan or an employee insurance plan such as a health and dental plan

 

The temporary lay-off period can be extended until such times as the wages cease or the plan expires.

There is no requirement to pay vacation pay during a temporary layoff.  Once the temporary lay-off period has expired, the employee is considered to be terminated and severance is owed.  However, should a lay-off last longer than 120 days or when wages or benefits cease, severance is not required where the contract has become impossible for the employer to perform as a result of an unforeseeable or unpreventable cause beyond the control of the employer.  Under Covid, the closure of a business by government order may qualify under this provision of the act.

Manitoba

Employment Standards states that temporary layoffs are limited to 8 weeks within a 16 week period.  However, emergency relief measures have been passed. Currently, layoffs related to Covid-19 are not counted toward the 8 week period and severance will not be required at the end of the 8 weeks.