In light of the disruptions to work caused by the ongoing COVID-19 crisis, many charities and non-profits may be faced with the prospect of temporarily laying off some or all of their employees. Many will try to avoid any layoffs by repositioning work for employees, if possible, or paying employees to be home during the crisis, but some will not have sufficient unrestricted reserves to able to do this.  Every province and their respective employment law may deal with this issue differently, and you should obtain appropriate advice relating to your organization and its employees in different provincial jurisdictions.

For example, in Ontario, unless the employee has previously agreed to be temporarily laid off, whether in an employment agreement or otherwise, there is case law that suggests that such a layoff may constitute wrongful dismissal. However, if an organization is faced with such a wrongful dismissal claim, it may attempt to resist the claim by arguing that the employment contract was ‘frustrated’ due to the mandated closure of the organization’s operations as a result of the Ontario government’s ongoing efforts to reduce the spread of COVID-19. It remains to be seen whether an Ontario court would find this argument persuasive.

Wherever possible, employers should try to obtain the employee’s consent to the temporary layoff, ideally prior to laying off the employee. Additionally, employers should only have the temporary layoff continue as long as is necessary. The longer that an employee is laid off, the more likely he or she will consider claiming that they have been wrongfully dismissed.

Employment legislation varies from province to province and, depending on where the organization’s employees reside, the organization may need to obtain legal advice in multiple jurisdictions prior to proceeding with a layoff. For example, in Ontario, the Employment Standards Act, 2000 provides that an employee may only be temporarily laid off for a period of up to 13 weeks in any 20-week period, or up to 35 weeks in any 52-week period. Other statutory obligations in Ontario include the requirement to continue to pay the employee’s benefits during the entire layoff period. Organizations that are considering a temporary layoff of its employees should obtain legal advice in each jurisdiction where their employees reside prior to proceeding with the layoff.

You might also find this article on the Federal Wage subsidy helpful.