Layoff is not the same as termination under the Act
Many people refer to a termination of employment, which is permanent, as being “laid off”. Under the Employment Standards Act, a layoff is a temporary thing. Section 1 of the Act defines “temporary layoff” as:
a layoff of up to 13 weeks in any period of 20 consecutive weeks;
and a “termination of employment” as including a layoff other than a temporary layoff. This means that where the employer tries to put the employee on temporary layoff but this extends for more than 13 out of 20 consecutive weeks, the employee will be entitled to severance pay under Section 63.
Reduction in pay is a layoff
Under Section 62 of the Act, a “week of layoff” is any week in which the employee earns less than 50% of their normal weekly wages. Normal weekly wages are based on the average of the previous eight weeks.
This means that even if the employee is working, they may be laid off if their pay is severely reduced. Under the Act, the temporary layoff clock would begin ticking and the layoff would become a termination after eight weeks at the reduced rate of pay.
Layoff and termination at common law
At common law, that is apart from the Employment Standards Act and according to judges, any failure to pay the employee can cause a termination of employment.
There is no 13-week rule at common law. This means that employers who experience a shortage of work or temporary shut-down do not have the right to temporarily lay off their employees unless they have a written contract expressly reserving the layoff rights described in the Act. A professionally drafted employment contract from EmployRight covers this blind spot for employers.
If you do not have a written agreement setting out your right to temporarily lay off employees, you must seek legal advice before attempting any layoff. Please contact EmployRight to speak with an employment lawyer.
The information provided on this page is a general overview of the lay-off rules set out in the BC Employment Standards Act. It should not be taken as legal advice. For answers to specific questions about your workplace obligations, contact EmployRight and speak with one of our employment lawyers.