The BC government extended its normally 13-week temporary layoff period to 16 weeks due to the COVID-19 pandemic. However, these 16 weeks are coming to an end for many employers.
While many employers are expressing their concerns of potential bankruptcy to Labour Minister Harry Bains, it does not look like temporary layoffs will be extended.
So, what does this mean for Employers?
Simply speaking, there are a few options to explore:
- Bring employees back to regular hours
- Bring employees back to an agreed upon, modified working schedule
- Lay off employees permanently
1. Bring employees back to regular hours
If it makes sense for your business, use our Return to Work Letter Templates to welcome your employees back to work. It’s important to provide reasonable notice to your employees. This will allow them to plan for childcare, commute and other arrangements.
Ensure that your team has the right systems in place to communicate virtually. If employees are newly transitioning to home, develop a process to ensure employees receive the equipment they need to be successful. Provide clear expectations for working remotely, especially if this is something new for the team.
Employees may be feeling nervous about returning on-site. When employees are invited back, provide an overview of the new policies and measures in place to protect them. In addition, provide contact information for who they can go to with any questions or concerns to ensure they feel heard.
2. Bring employees back to modified hours
There is a legal risk associated with bringing employees back to a different working schedule, known as constructive dismissal. To avoid this, employers need to get sign off from employees on the new schedule to prove that it was determined cooperatively, and not unilaterally.
To get buy-in for modified hours, be transparent with business needs and set explicit guidelines for what needs to be achieved in order for their hours to return to full-time. People want to know that a regular working schedule is attainable and that they won’t be stuck in modified hour limbo forever.
3. Make the layoff permanent by not bringing employees back
Employers do not need to issue a termination letter to make temporary layoffs permanent. In fact, as soon as the 16-week duration hits, according to Employment Standards in B.C., employees are entitled to pay in lieu of notice. Essentially, if you don’t make this decision now, it will be made for you.
In addition to this, if employers have laid off more than 50 employees, then employees would be entitled to receiving group termination notice as outlined in the B.C. Employment Standards Act.
Many employers right now are losing money, and others aren’t even yet permitted to open. Permanent layoffs are certainly an option. However, the one-time termination payouts associated with this option, whether individual or group, could force businesses into bankruptcy, insolvency, or even permanent closure.
Other things for Employers to think about:
Determining layoff costs
Layoff decisions are especially difficult to make when there is no certainty for calculating what these decisions will cost. While Section 65 of the E.S.A. does allow for employers to avoid paying severance in “unforeseeable circumstances”, there is no guarantee they will be covered if they do not pay out severance.
In Alberta, employers who hold group terminations as a result of COVID are exempt from their group-termination liability. There is not currently a rule like this in B.C., however employers can request a variance on the length of the temporary layoff. This request requires a majority of laid-off workers to support the layoff extension and it must be submitted to the director of the Employment Standards Branch for approval.
Implications for employees
Whether or not employers are able to get out of paying severance due to COVID-19, once the 16-week timeframe is up, employment is terminated.
If employers want to hire employees back (or never wanted to lose them in the first place), it would now be on a completely new contract. The employee is no longer entitled to previous salaries or seniority levels – a scary thing for many employees. Some employers may choose to take advantage of this instead of honouring previous terms.
Ultimately, how you decide to handle your temporary layoff period coming to an end takes us back to our favourite question:
What kind of employer do you want to be?