On November 9, 2020, the federal Minister of Labour announced a further extension to the permissible time period for temporary layoffs in light of the continuing impact of COVID-19 pandemic on federally-regulated employers and employees.

The federal Minister of Labour previously extended the time periods for temporary layoffs on June 23, 2020, which we previously reported on here.

Prior to these changes, section 30 of the Canada Labour Standards Regulations (the Regulations) permitted federally-regulated employers to temporarily layoff employees for:

  • up to three months without notice of an anticipated recall date; or
  • for a period of up to six months if notice of an anticipated recall date was provided.

If the time period expires, or if the employer fails to recall the employee within the specified time period, the employment is deemed terminated. Where a layoff becomes a termination of employment, eligible employees are entitled to severance pay, termination pay (if notice of termination was not provided), and any accumulated vacation pay.

In response to the ongoing impact of the COVID-19 pandemic and the impending statutory consequences associated with the expiry of the permitted layoff period, the Government of Canada announced a further extension to the allowable time period before a layoff is considered a termination as follows:

  • if an employee is laid off for a period of 3 months or less
  • before March 31, 2020, the time is extended by 9 months after the day on which it would otherwise end; therefore, an employer would have up to 12 months to recall the employee before the lay-off is deemed to be a termination of employment
  • for the period between March 31, 2020 and December 31, 2020, the time is extended and the employer has until March 31, 2021, to recall the employee before the lay-off is deemed to be a termination of employment
  • if an employee is laid off with an expected recall date or fixed period
  • prior to March 31, 2020, the date specified in the written notice will be extended by 9 months or to March 31, 2021, whichever is earlier and the employer would have up to that period or date to recall the employee before the lay-off is deemed to be a termination of employment
  • during the period between March 31, 2020 and December 31, 2020, the term of the lay-off is extended and the employer has until March 31, 2021, to recall the employee before the lay-off is deemed to be a termination of employment, unless a later recall date or fixed period was provided in a written notice

These changes are temporary and the extension provisions will not apply in the following circumstances:

  • Any layoffs occurring after December 31, 2020;
  • The employee is governed by a collective agreement that contains specified recall rights or a guarantee of minimum work;
  • The employee is on a strike or lock out;
  • The employee continues to receive some form of payment from their employers (i.e. a retention payment, benefit continuation or supplementary unemployment benefits); or
  • The employee was terminated prior to June 22, 2020, or if their employment was terminated prior to November 9, 2020, because their employer chose not to apply the extension that came into force in June.

Employers should note that these amendments do not affect their termination and severance pay obligations under the Canada Labour Code. Further, the Government of Canada has recommended that employers who intend to rely on the temporary extension inform their employees of their intention as soon as possible by providing notice in writing of the new anticipated recall date.