MINISTRY OF LABOUR MAY GIVE MISLEADING ADVICE REGARDING LEGALITY OF LAYOFF

QUESTION:   After 14 years of continuous service, last week I received a notice from my employer that I was going to be “temporarily laid off” starting in a few weeks. I have never been laid off in the past and no one has even suggested that it was a possibility. Do I have to just sit around and wait for them to call me back or have I been fired?
 
ANSWER: As a result of a decision six years ago by the Ontario Court of Appeal, if you want to you can take the position that you have in fact been fired. If you call the Ministry of Labour, however, and ask them this question, they will not agree. The fact is, they are wrong.
 
The Employment Standards Act says that you can lay people off for up to 13 weeks without benefits or up to 35 weeks with benefits without a termination taking place. According to that Act it is only if the employer doesn’t call you back after those lengths of time that you would be entitled to the minimum payments under the Employment Standards Act.
 
Six years ago, an employee just like you challenged this position. He said, like you, that it was not a part of the terms of his employment that he could be laid off and be put out of work without notice and that the layoff was in fact a constructive dismissal (a termination) regardless of the wording of the Act.  
 
When the matter ended up before the Ontario Court of Appeal, that court agreed. The court found that if there was no agreement between the employee and employer that the employee could be laid off without pay and without notice, then whether the layoff was temporary with a specified date for a return to work or indefinite, it was a constructive dismissal. The onus is on the employer to prove that such an agreement existed.
 
A few years after this decision, the Employment Standards Act was revised to indicate that even if an employer did not provide a specific return to work date, a termination was not triggered by a layoff that met the other conditions set out above.
 
The problem is that the Court of Appeal made it quite clear it did not care whether the layoff was temporary or indefinite, if layoffs were not part of the deal, they were a termination. 
 
Basically, the Ministry of Labour is ignoring the Court of Appeal on this issue.
 
Fortunately, the Ministry of Labour does not have the last word.
 
You may simply want to retain an employment lawyer to pursue damages for reasonable notice at common law. Those are the maximum entitlements and they exceed the minimums under the Employment Standards Act. If you file a complaint through the Employment Standards Act, you can never sue for the larger damages.
 
If you have already found another job, however, there are no larger damages to sue for. You will still, however, be entitled to your minimum termination and severance pay under the Employment Standards Act.
 
If that is the case, go ahead and file your complaint. Your complaint, initially, will be dismissed. As you appeal it up the line, however, you will eventually win. The Court of Appeal’s decision is clear and the changes to the Employment Standards Act have changed nothing. Once enough people have done this, the Ministry of Labour is going to have to give up and accept the Court of Appeal’s decision.
 
Ed Canning is a partner practicing in the Labour & Employment Group at Ross & McBride LLP.

As published in the Hamilton Spectator, April 27, 2004
 
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com