COVID-19 Update: Government of Canada Temporarily Extends the Time Periods for Temporary Layoffs of Federally Regulated Employees

| 5 minutes

On June 23, 2020, the federal Minister of Labour announced an extension to the permissible time periods for temporary layoffs in light of the continuing impacts of the COVID-19 pandemic on federally-regulated employers and employees.

Prior to these changes, the Canada Labour Standards Regulations permitted federally-regulated employers to temporarily layoff employees for:

  • up to three months without notice of an anticipated recall date; or
  • for a period of up to six months if notice of an anticipated recall date was provided.

In recognizing the ongoing impact of the COVID-19 pandemic and the impending statutory consequences associated with the expiry of the initial three month permitted layoff period (i.e. deemed termination and the corresponding obligation on employers to provide payment of termination and severance pay), the Government of Canada has announced that effective June 22, 2020, for any layoffs occurring prior to September 30, 2020, the layoff time periods will be temporarily extended to:

  • the earlier of six months or December 30, 2020 for employees laid off prior to March 31, 2020; or
  • December 30, 2020, unless a later recall date was stipulated in a written notice at the time of the layoff, for employees laid off between March 31, 2020 and September 30, 2020.

Note that the above-noted extensions will not apply in the following circumstances:

  • The employee is governed by a collective agreement that contains specified recall rights or a guarantee of minimum work;
  • The employee is on a strike or lock out;
  • The employee continues to receive some form of payment from their employers (i.e. a retention payment, benefit continuation or supplementary unemployment benefits); or
  • The employee was terminated prior to June 22, 2020.

Any layoffs occurring after September 30, 2020 will be subject to the normal layoff rules.

The Government of Canada has recommended that employers who intend to rely on the temporary extension inform their employees of their intention as soon as possible by providing notice in writing of the new anticipated recall date.

The Government of Canada’s announcement follows other provincial developments and responses to the COVID-19 pandemic. For example:

  • Alberta has amended the provisions of the Employment Standards Code to extend the maximum time for temporary layoffs related to COVID-19 to 180 days. For more information on this extension please visit our blog here.
  • British Columbia extended the length of temporary layoffs to a maximum of 24 weeks, expiring on August 30, 2020, during the COVID-19 pandemic. Further information about BC’s announcement is available here.
  • Manitoba has determined that periods of layoff occurring after March 1, 2020 will not be counted towards the permitted period for a temporary layoff. Further information about Manitoba’s announcement is available here.
  • Newfoundland announced that where an employer temporarily lays off an employee on or after March 18, 2020 and before September 18, 2020, a deemed termination will occur when the layoff exceeds 26 weeks in a period 33 consecutive weeks. Further information about the announcement is available here.
  • Saskatchewan suspended the normal maximum period for a temporary layoff until two weeks after the public emergency ends. At that time, employers must recall their employees or the layoffs will be deemed a termination. Further information about Saskatchewan’s announcement is available here.
  • Ontario deemed employees who have been laid off or have had their hours reduced or eliminated because of the COVID-19 pandemic to be on Infectious Disease Emergency Leave (an unpaid, job-protected leave). For more information, please see our blog here.

It is important to note that these measures are temporary and are only intended to apply until the COVID-19 pandemic has subsided and economic activity resumes.

For more information on employment-related issues arising from COVID-19, please visit our COVID-19 Recovery Hub and our McCarthy Tétrault Employer Advisor Blog.  Additionally, if you are an employer and have questions about this blog or otherwise need assistance, please reach out to any member of our National Labour & Employment Team.

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