Employers pointing to the act to justify layoffs may be in for a surprise
A layoff is one way an employer can send an employee home without necessarily risking an outright termination. This tool is commonly used in a labour context involving unionized employees and a collective agreement, because such agreements usually allow for layoffs. However, in some ways, the concept of layoff has leached into common law employment arrangements.
In fact, the Employment Standards Act of British Columbia contains wording that seems to allow for a temporary layoff of employees. The act indirectly mentions temporary layoff for a period of up to 13 consecutive weeks.
Temporary layoff is a common gambit used by employers to control the size of their work force by means of removing employees from their duties, and concomitantly, their pay. It is not unheard of for employers, relying on the act, to lay off for one day short of 13 weeks, call the laid-off employee back to work, and impose another temporary layoff shortly after the poor employee resumes work.
This method has been used to send a message to unwanted employees. And typically, employees, confused by the softer tones and implications of the word “layoff” compared to “dismissal” or “termination,” have a fuzzy notion of the true legal effect of a layoff, and some employers are happy to oblige such fuzziness.
Invariably, the employer refers to the act, and sure enough, there it is in black and white: the employer seems to have the right to temporarily lay off with impunity, and the employee is powerless to do anything about it. But is this correct?
A layoff means that the employee is sent home, without the right to attend work and be paid for the work, for a period of time.
Really, a layoff is nothing less than a rupture in the normal relationship between employer and employee. Since a layoff strips the employee of the basic right fundamental to the employment contract – the right to work and receive payment of wages – the magnitude of this change attacks the fundamental terms of the employment contract.
There are two legal regimes operating concurrently in employment law in British Columbia. There is the act, which is the lesser legal regime, and there is the common law, which is the greater legal regime. On the topic of layoff, the way the act has been interpreted to allow layoffs collides directly with the current state of the common law.
At common law, the rule as to layoffs is clearly worded. Unless the employment contract in question between the employer and the employee specifically allows for temporary layoff, then any temporary layoff imposed by the employer constitutes a breach of a fundamental term of the employment contract: the right to work and be paid for such work.
At common law then, a layoff without the contractual right to do so is a repudiation by the employer of the employment contract, meaning the employee is dismissed, and therefore allowed to pursue a claim in damages.
But what about a temporary layoff under the act? Can’t the employer rely on the act to allow temporary layoff? Certainly, the act can amend employment contracts, and in fact, does so in imposing certain basic standards into every employment contract. Such is the basic effect and power of the act.
But in the case of temporary layoffs, the act gives way to the common-law rule that temporary layoffs imposed without agreement are dismissals.
The common-law courts have ruled that the act refers to temporary layoffs only indirectly, and by implication. Accordingly, the judicial thinking goes, if the legislators intended to create a general right to lay off in the act in favour of employers, a right which would have directly conflicted with the state of the common law on point, then the act would have made specific provision for this right, given its devastating effect on the laid-off employee. Because the act does not set out a specific right for employers to lay off, no such right exists and the common law on point prevails.
So what is the upshot? The common law is obscure to all but judges, lawyers and the most diligent laypeople. On the other hand, the act is easily and readily accessible by employers and employees. The act contains wording that a non-judicial eye might interpret to allow temporary layoffs of employees. When employers impose layoffs, they will refer to the act to justify it, and adequate confirmation of the right to lay off will appear to be obtained. But employers beware. Unless you have specifically contracted to do so, the common law has the final say.