Arbitrator Rules COVID-19 Pandemic Was A “Once-in-a-Lifetime” Event That Did Not Trigger Layoff/Severance Provisions

On February 22, 2022, Alberta Arbitrator John M. Moreau, Q.C. dismissed a group of grievances filed on behalf of 11 employees of Dataco Utility Services Ltd. (the “Employer or “Dataco”) by the United Utility Workers’ Association of Canada (the “Union) seeking severance pay as a result of the work disruption caused by the outbreak of the COVID-19 pandemic and the resulting measures implemented by the Government of Alberta to contain the spread of the virus.

The Employer provides electrical meter support services to utility companies in Alberta. In March 2020, as a direct result of the onset of the pandemic, one of Dataco’s largest utility clients had suspended certain electrical meter work and services, including financial meter disconnections (disconnecting electricity/power). This left some Dataco employees temporarily without work through no fault of any party.

On April 30, 2020, the Union advised the Company that due to the extended time that Dataco employees were without work, and the uncertainty surrounding when their regular work would resume, the Union contended that a layoff had occurred and that as a result, the employees were entitled to severance pay under the layoff and recall provisions of the collective agreement. The Employer disagreed and on July 10, 2020, due to the ongoing disruption in work caused by the global pandemic, the 11 grievances were filed.

The collective agreement between the parties stated that “laid off” employees were entitled to severance pay based on their length of service. However, the collective agreement did not define when an employee was considered to be laid off. In this case, the employees were offered alternative work accommodations where possible during the work disruption and had access to government benefits such as the Canada Emergency Response Benefit (CERB). In addition, the employer continued to be in contact with the employees and provided support when and where possible.

The Arbitrator noted the layoff provisions in the collective agreement contained specific notice and consultation requirements before employees could be laid off. It also contained notice requirements before employees could be recalled back to work. As such, the parties clearly intended for an orderly layoff and recall process.

In contrast, the Arbitrator found that the pandemic was anything but orderly and “the decision to reduce its workforce [in March 2020], was at its root due to a cataclysmic event which shook the world and continues to do so.” The Arbitrator, quoting from a British Columbia arbitration decision, described the COVID-19 pandemic as having caused ”unprecedented ramifications around the globe” through the sheer speed and breadth of its impact which was unpredictable and evolving on an almost daily basis in the early stages of the pandemic. The Arbitrator also took notice of the millions who have died as a result of COVID-19 globally, including the thousands in Alberta, and the various measures the Federal Government has taken to cushion its impact.

Taking a purposeful view of the collective agreement and the facts before him, based on the unique circumstances of the pandemic, the Arbitrator concluded the parties had never intended for an extraordinary and unpreventable event like COVID-19 to trigger the rights and benefits found in the layoff provisions of the collective agreement and dismissed the grievances.

This decision is significant for employers across Canada who are faced with similar claims, grievances, or complaints related to the unforeseeable and unpreventable impacts and disruptions caused by the COVID-19 pandemic.

If you have any questions about this topic, other COVID-19 related questions, or any questions relating to workplace law generally, please do not hesitate to contact a Mathews Dinsdale lawyer, including Wilson Chan and Brady Farmer who were counsels on this case, or refer to the Firm’s COVID-19 website resources.

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