Employee Dismissals and Wrongful Dismissals

Temporary Lay-offs

An employer may wish to temporarily lay off employees during challenging economic times, until the economy improves. The ESA defines “temporary layoff” in section 1 as:

(a) in the case of an employee who has a right of recall (ie. the right of an employee under a collective agreement to be recalled to employment within a specified period after being laid off), a layoff that exceeds the specified period within which the employee is entitled to be recalled to employment, and

(b) in any other case, a layoff of up to 13 weeks in any period of 20 consecutive weeks.

The above, however, is simply the ESA’s definition of the term “temporary lay-off”. It does not give an employer the right to temporarily lay off an employee. BC case law (such as Besse v. Dr AS Machner Inc., 2009 BCSC 1316) has established that employers are not entitled to temporarily lay off employees, unless the employer is able to establish:

(1) the employee has consented to being temporarily laid off; or

(2) the temporary lay-off is provided for in the employment contract, either as an express term, or as an implied term based on well known, industry wide practice.

If the employer is able to establish one of these factors, then the limits set out in section 1 of the ESA apply. If the employee has been laid off for more than 13 consecutive weeks, and the period has not been extended either by agreement of the employee or the Director, then the employee is legally considered to have been permanently terminated, and is entitled to severance pay.

The employee is also able to commence a legal action for wrongful dismissal even before the 13 week period has expired, for example, where it is clear that the employee has in fact been terminated, despite the employer’s use of the term “temporary lay off.”

Section 63(5) of the ESA states that “the employment of an employee who is laid off for more than a temporary layoff is deemed to have been terminated at the beginning of the layoff.”

Where an employer temporarily lays off an employee and is not able to establish that it had the right to do so, then the lay off is legally considered in British Columbia to be a termination. In some cases, it may amount to constructive dismissal.


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