Ensure you have the proper clause in your contract: Legal manager at HR firm
As many businesses in Canada are recovering from two years of repeated lockdowns, reduced staff, and lower revenues, some employers are now recalling workers from temporary layoffs, while others are requiring staff to return to the workplace after a long period of remote work. These scenarios can pose a number of employment challenges for in-house counsel.
Under the Employment Standards Act, a temporary layoff in Ontario can last not more than 13 weeks in any period of 20 consecutive weeks, or not more than 35 weeks in any period of 52 consecutive weeks if certain conditions are met throughout the layoff period, including payments and benefits.
In-house counsel should ensure that employment contracts explicitly mention that the employer has the right to place staff on a temporary layoff.
“If an employer is placed on what they thought was a temporary layoff but there was no mention of temporary layoffs in the employment contracts, then they’ve got a bit of a difficult situation,” says Patrick Stepanian, legal manager at HR consulting firm, Peninsula Canada. The contract should also specify whether the layoff would be with or without pay and benefits, he adds. When a temporary layoff in Ontario lasts more than 23 weeks and the employee is not recalled to work, they will generally be entitled to termination pay.
“This is all tied to the Employment Standards Act and having that proper clause in your contract,” says Stepanian. “If you do not have that proper clause, then we’re talking about someone trying to lay you off under common law, and there is no implied layoff right in common law, so from the day you are supposedly laid off, you can consult with an employment lawyer or HR advisor and talk about being constructively dismissed, potentially.”
Another challenge facing employers is handling employees who refuse to come back to the workplace after a period of remote work. Providing employees were made aware early on that any remote working arrangement was temporary, they are required to return to the office when it is deemed safe, Stepanian says. During a temporary layoff, an employer, upon notice to their employee, can set a recall date requiring the employee to return.
Stepanian gives the following recommendations to in-house counsel:
- Think about how many employees you can safely recall to work while observing physical distancing and other health and safety measures. If it is not safe to bring back your entire staff at once, consider a phased return to full capacity
- Use objective criteria when recalling staff (seniority, order of layoff etc)
- A recall notice should give employees sufficient notice to make arrangements for return to work
In the case that the employee refuses to resume their responsibilities in the workplace, the employment relationship may come to an end, although many employers are implementing hybrid arrangements as a compromise.