Federal Government Extends Time-Periods for Temporary Lay-offs

The Federal Government has temporarily extended certain lay-off periods established under the Canada Labour Standards Regulations in response to the COVID-19 Pandemic.  Specifically, the time period for when a lay-off under the Canada Labour Code becomes a termination has been extended.   Prior to these changes, employers could temporarily lay-off their employees for up to three months if no notice with a recall date was provided, or for a period of up to six months if they provided a notice with an expected recall date, before the lay-off became a termination. 

The allowable time periods before a lay-off is considered a termination under the Canada Labour Code are temporarily extended as follows:

  • For employees laid off prior to March 31, 2020, the time period is extended by six months or to December 30, 2020, whichever occurs first.
  • For employees laid off between March 31, 2020, and September 30, 2020, the time period is extended until December 30, 2020, unless a later recall date was provided in a written notice at the time of the layoff.

Employers should note that the amendments to the Regulations only extend the length of time during which an employer may recall a laid-off employee. If an employee’s employment is terminated by an employer, the employer is obligated to pay the employee eligible termination pay, severance pay and vacation pay as outlined in the Canada Labour Code. In addition, the time that an employee is laid off will continue to count towards their continuity of employment, which will be factored into the calculations for termination and severance pay should their employment eventually be terminated. These changes, which came into effect on June 22, 2020, are a temporary measure, only apply to Federally regulated employers (to which the Canada Labour Code and its Regulations apply), and will have no impact on employees who:

  • Are covered by a collective agreement that contains recall rights;
  • Are terminated prior to the coming into force of these amendments; or
  • Are laid off after September 30, 2020.

Please note that the text of the amendments have not yet been released to the public. 

If you have any questions about this topic, other COVID-19 related questions, or would like assistance with developing and/or reviewing pandemic plans, please do not hesitate to contact a Mathews Dinsdale lawyer, or refer to the Firm’s COVID-19 website resources.

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