Temporary Lay-off Period Extended in Newfoundland and Labrador

June 15, 2020

On June 12, 2020, legislation was passed temporarily amending the Labour Standards Act (the “Act”) to extend the period of temporary layoff contemplated in the Act.

Background

Previously, under section 49 of the Act, an employee on temporary layoff for a period exceeding 13 weeks over a consecutive 20 week period would be considered to have had their employment terminated. With this recent amendment, the period of time before an employee’s employment is considered to be terminated has doubled, from 13 weeks to 26 weeks over a consecutive 33 week period. The legislation creates a window from March 18, 2020 to September 18, 2020 during which any temporary layoff can be extended for up to 26 weeks over a consecutive 33 weeks before such lay off is deemed to be a termination of employment. Importantly it can be applied to employees already on temporary layoff.

It is also noteworthy that the new legislation extends the time period in which an individual may bring a complaint to the Director of Labour Standards from 6 months to 12 months from the date of termination of employment.

What does this mean for employers?

With the amendment to the legislation regarding the temporary layoff period, employers can take additional time to recover from the financial strain that has accompanied COVID-19 without the added expenditure associated with permanent terminations or returning employees to work before it is fiscally reasonable for their operations.

It should be noted, however, that while the Act addresses temporary layoffs in non-unionized workplaces, employers are not immune from claims of constructive dismissal at common law. In light of the current economic circumstances, however, the risk of a successful constructive dismissal claim may be relatively low where employers communicate to their employees that (1) COVID-19 related layoffs are temporary in nature; and (2) the company intends to recall the employees to work upon the resumption of business operations.

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