As the lockdowns continue to stretch longer, many businesses have found themselves in the difficult position of having to let their employees go. If you find yourself in the unfortunate situation of being laid off or on the verge of losing your job, it is important to be aware of your rights as an employee. But what exactly are these rights and are they different now because of the pandemic?
We spoke with employment and commercial litigation lawyer Michelle Cook of Devry Smith Frank LLP who walked us through what your rights are as an employee during the COVID-19 pandemic and everything you need to know.
Thank you Michelle for taking the time to answer our questions. As we are navigating unprecedented times, what are your current basic rights as an employee? Have they remained the same or are there certain things employees need to be aware of?
While the recent restructuring and closing of many workplaces is certainly unprecedented, workplace rights, such as those contained in the Employment Standards Act and the Canada Labour Code, remain generally unchanged with the most notable exception potentially being around an employer’s right to layoff an employee. Key employee rights and obligations such as minimum wage, the requirement to provide notice or pay in lieu of notice upon permanent termination, holiday entitlements, and the right to statutorily protected leaves of absences also remain unchanged.
Moreover, an employee’s rights under the Occupational Health and Safety Act remain in full force, including employees’ right to know about health and safety risks, right to participate in decisions that could affect their health and safety and right to refuse unsafe work.
Unfortunately, there's been thousands of lay-offs since the pandemic lockdown began. Are employees still entitled to a severance pay? What are your rights as an employee if you have been let go due to COVID-19?
In Canada, the term “layoff” typically means a temporary suspension of employment, usually due to business reasons. If there is a contractual term in the employment contract that permits an employer to temporarily lay off employees, then it is permitted to do so, provided that the employment contract is valid and the layoff complies with the temporary layoff provisions in section 56 of the Employment Standards Act.
Most employment contracts do not contain a layoff provision. An employer is not permitted to unilaterally reduce hours of work or cut an employee’s salary. Depending on the quantum of the reduction in pay or hours, doing so may constitute a breach of contract and may entitle the employee to a severance package for constructive dismissal.
However, due to the unique and unprecedented nature of COVID-19 and the statutorily mandated closure of workplaces, there is some likelihood that the courts may determine that employers are entitled to temporarily lay off employees in accordance with the Employment Standards Act, despite the absence of a contractual term to do so. The courts may also find that the employment contract has been frustrated (i.e. unable to be performed by either party due to unforeseen circumstances), thus disentitling an employee to notice or pay in lieu of notice.
In order for an employee to claim constructive dismissal, he or she would need to assert this position in a timely manner or else be at risk for implicitly condoning, and thereby accepting, the layoff or reduction in hours. The onus of proof would fall on the employee to prove that he or she was constructively dismissed. Irrespective of the legal risk due to the unique and unprecedented nature of COVID-19, resolution of a claim of constructive dismissal would likely require costly litigation and take at least a year. Moreover, if a business becomes insolvent it can be difficult to recover termination pay, notwithstanding a court order, as officers and directors are only personally liable for wages and not termination or severance pay.
A best practice would be to confirm in writing that the change would be temporary and that the employee would be returning to their same rate of pay, benefits and job function when things return to normal
As such, in many cases it may be best for employees to accept the change in their employment. A best practice would be to confirm in writing that the change would be temporary and that the employee would be returning to their same rate of pay, benefits and job function when things return to normal. If an employee has this assurance in writing and the employer refuses to return the employee to their employment or changes a fundamental term of their employment that existed prior to COVID-19 after things return to normal, the employee may then have a claim for constructive dismissal or termination against his or her employer notwithstanding the cautions raised above. At this time, it is highly recommended that the employee seek the advice of an employment lawyer.
If an employee has been temporarily laid off, is there a way they can guarantee that they will be rehired by their employer once the lockdown has been lifted?
Subject to the comments above regarding constructive dismissal after things return to normal, there is no way to guarantee that the employee will be rehired, however failure to rehire an employee will likely be found to be a constructive dismissal or termination. It is strongly suggested that the employee seek the advice of an employment lawyer with respect to their individual circumstances.
We've been seeing the word furlough thrown around quite a lot these days. What is the difference between a furlough and a lay-off?
“Furlough” is another way of saying a temporary suspension of employment without pay whereby an employee returns to work after a period of time. In Canada, “layoff” and “furlough” mean the same thing. People also use the terms “layoff” and “termination” interchangeably, however the concepts are legally distinct with a layoff being temporary and a termination being permanent.
In the United States, they sometimes use the term “layoff” to connote a permanent termination whereby the employee does not obtain a severance package (which is not legal in Canada). This term is particularly used to connote mass terminations without severance packages.
When a Canadian employer uses the term “furlough” instead of “layoff” they typically intend to continue paying for the employee’s benefits, such as health and life insurance, but will not continue paying the employee’s wages until they are recalled to the workplace. Despite the continuance of an employee’s benefits, a unilateral fundamental change has occurred to the employment relationship and therefore the above comments about a potential constructive dismissal in the context of a layoff apply.
These terms should be distinguished with the term “leave,” which is an employer-granted permission to be absent from the workplace, which is typically requested by the employee. In Canada, “leave” often refers to the statutorily protected paid and unpaid leaves, such as pregnancy leaves, sick leave, bereavement leave, etc., whereby the employer must return the employee to their same position and rate of pay after completion of the statutorily protected leave or period.
Moving forward, how should employees plan for the future? What are some takeaways they can learn from this pandemic?
Employees should always seek to have a good rapport and level of communication with their employer to find out about key issues impacting their workplace.
Several employers and industries are facing radical shifts and financial hardship. It is important to keep in mind that many of the changes that negatively impact employees are often being implemented reluctantly in an effort to protect the business so that an employee has a workplace to return to after things return to normal. These changes should hopefully be temporary in most cases.
It is also important to note that not all industries are negatively impacted and jobs in areas such as grocery service and the health sector are flourishing.
Employees should now more than ever implement a budget and prepare for potential future challenges, such as a further reduction in the workforce or second waves of COVID-19
While mandatory closures will likely continue for at least the next couple of weeks, even when measures are lifted the economy will likely take time to recover and for people to return to normal. Employees should now more than ever implement a budget and prepare for potential future challenges, such as a further reduction in the workforce or second waves of COVID-19.
On a positive note, this moment has granted many employees time that might not have otherwise been available and a new perspective on life. Now is a great time to rekindle lost relationships (remotely), take up a hobby that had previously been put off or further one’s education. Ordinary activities such as seeing friends or grabbing a drink on a patio, have become all that much more appreciated and precious. Use this moment to reflect on the positive changes that have come out of COVID-19.
Michelle Cook is an
employment and commercial litigation lawyer at the law firm Devry Smith Frank LLP who advises both employers and employees. She holds a law degree from Osgoode Hall Law School, specializing in Labour and Employment Law, and graduated within the top 8% of her class.
She has litigated before the
Ministry of Labour(Employment Standards), Ontario Superior, Divisional and Small Claims courts as well as the Ontario Human Rights Tribunal.