Layoffs are a reality for many Canadian workers in the current economic climate. But what does the Canada Labour Code (CLC) say about this? Can employers legally lay off employees temporarily? This article will explore the ins and outs of layoffs in Canada.
What is the Canada Labour Code?
The Canada Labour Code is a federal law that governs workplace relations in Canada. It sets out the rights and responsibilities of employers and employees and establishes standards for work hours, wages, and safety in the workplace. The Code also includes provisions for things like temporary layoffs.
Under the Code, employers can temporarily lay off employees without pay for up to 60 days in any given year, as long as the employees are given at least 24 hours notice. After 60 days, the employer must either reinstate the employees or pay them severance.
The Code’s provisions on temporary layoffs are designed to protect employees from being unfairly dismissed while also giving employers the flexibility to deal with business downturns. You must know your rights under the Code if you are an employee who is laid off. And if you’re an employer, it’s important to understand the rules around temporary layoffs to comply with the law.
Temporary Layoffs for Non-Unionized Workers
A Canada’s unionized employee is not terminated unless their temporary layoff exceeds the time frame per section 30 of the Canada Labour Standards Regulations. Before this time, they are not entitled to termination or severance pay under the CLC. This is similar to how provincial employment standards legislation expressly permits temporary layoffs.
Employers are permitted to temporarily fire non-unionized workers under Section 30 of the Canada Labour Standards Regulations for up to three months with no recall date or up to six months, provided they give notice of a specified recall date within six months.
If the layoff occurs outside these time frames and the employee has been terminated per the CLC, they are eligible for severance or termination pay under the CLC.
Canada Labour Code Recall Dates
Remember that, as was said above, firms subject to federal regulation are permitted to fire workers for longer than 60 days. Employees may only be laid off for a period longer than 60 days, though, if the employer gives them written notice at or before the time of the initial layoff that they will be called back to work at a fixed time no later than six months from the initial date of the layoff and follows through on that notice.
If an employer tries to extend a layoff for longer than six months or advances the date of a recall after the initial notice, it is void, and the employee is fired immediately. They can directly request a termination with severance compensation or a CLC reinstatement.
What are Temporary Layoffs?
The Canada Labour Code defines a temporary layoff as a reduction in an employee’s normal work hours. This can happen when there is not enough work for employees to do or when the employer needs to reduce their workforce due to economic conditions.
Temporary layoffs differ from permanent layoffs, which occur when an employer permanently eliminates a position. With a temporary layoff, the employee still has a job and is expected to return to work once the layoff period is over.
There are restrictions on how long an employer can temporarily lay off an employee. The Code states that an employee can only be laid off for not over 60 days in any 12 months. The employee is permanently laid off if the layoff period is longer than 60 days.
Canada Labour Code Layoff Procedure
Employers subject to federal regulation are not required to give early notification of layoffs. However, if an employer plans a dismissal that will last longer than three months, they must provide notice of the recall date.
Under the CLC, layoffs are unpaid. However, workers are eligible to apply for and receive employment insurance (EI). Employers are required to file a Record of Employment (ROE) with code A on behalf of laid-off workers.
Employers are not required to maintain benefits or pension schemes during a temporary layoff. However, seniority does not stop working during a layoff.
What are the Consequences of Violating the Canada Labour Code?
The Canada Labour Code sets out the rules and regulations governing labour standards and workplace safety in Canada. If an employer violates the code, they may be subject to fines, imprisonment, or both. The Code also provides a complaint process, where employees can file a complaint with the government if they believe their rights have been violated. As an employee, you want to hire an experienced labour lawyer in Canada to help you file claims and chase compensation from your employer or insurer.
The Canada Labour Code does allow employers to temporarily lay off employees without pay for several reasons, such as a shortage of work, the discontinuation of a contract, or repairs being carried out on equipment. However, some rules and regulations must be followed for the layoffs to be considered legal. If you are an employer considering temporary layoffs, ensure you are familiar with the requirements in the Canada Labour Code.