LIFELINE FOR EMPLOYERS
Layoff rules extended
VICTORIA B.C. businesses can still temporarily lay off workers during the COVID-19 pandemic, after Premier John Horgan reversed his government’s position on the issue.
On Thursday, Horgan’s government announced that a 16-week temporary layoff clause, which was set to expire soon, would be extended to 24 weeks, expiring on Aug. 30. Affected employees must agree to any additional extension with their employer.
The decision was a step back for the Horgan government, which had opposed the idea last week.
B.C.’s business community said the change will save many struggling businesses from bankruptcy by giving them extra time to recover and recall staff, instead of firing them permanently and paying out severance. Organized labour opposed the move, arguing government should have done more to ensure temporarily laid-off workers get the first right to return to their positions.
The extension came after a week in which the Horgan government came under intense questioning for its lack of action on the issue. Horgan and Labour Minister Harry Bains promised to discuss the extension at a Thursday meeting with business leaders.
The layoff clause allows businesses to furlough workers temporarily without triggering a legal termination and a payout of severance. The idea was to give businesses flexibility to recall workers as the economy reopened and their finances improved, rather than forcing them to pay severance to employees who they might want to rehire later.
“This extension will provide even more certainty and flexibility,” Bains said in a statement Thursday. “This will also give additional time to ensure that employers and workers are able to craft agreements if there is a need to further extend temporary layoffs, while still protecting workers’ rights to compensation for length of service.
“Our goal is to maintain connections between employers and workers who have a joint interest in supporting the economic recovery of businesses in B.C. and the jobs that go with them. Employers who aren’t able to return to full operations and need additional time can do so with agreement from their employees, but we expect those employees will be recalled when operations have resumed.”
Organizations representing more than 500,000 businesses in B.C. say the extension is vital because many businesses don’t have the cash to pay severances and would go bankrupt if forced to do so.
“This was an outstanding outcome and businesses definitely got a lifeline today,” said Val Litwin, CEO of the B.C. Chamber of Commerce. “What we know from the data is this will ultimately save thousands of businesses from insolvency.”
The B.C. Federation of Labour said it would have preferred government enshrine in law that any workers temporarily laid off have first right to resume their jobs once businesses are ready to rehire.
“We need to have equal protection for workers at the end of the process,” said Laird Cronk, president of the labour federation. “The recall rights of these workers should be protected so they have the first right.”
Cronk pointed to the Four Points by Sheraton Vancouver Airport hotel that’s trying to terminate employees without severance, as well as a labour lawyer who he said is working on two pending lawsuits by employees alleging their employers laid them off temporarily and then rehired other people to do their jobs.
Before approving the change, Horgan and Bains this week argued businesses and employees could partner to apply to the employment standards branch to avoid severance under Section 72 of the Employment Standards Act.
“I think the premier thought they had found a solution through Section 72 of the act,” said Greg D’Avignon, president of the B.C. Business Council. “But there are 250,000 small businesses that have fewer than 50 employees in B.C. and they just don’t have that capacity now to be filling out forms in a day or two in order to keep their businesses alive and avoid personal and business insolvency legislation.”
The branch has a backlog of more than 3,000 cases. But Cronk said temporary layoff variance cases skip the backlog and go straight to the director of employment standards.
Any future extensions to temporary layoffs after August will have to go through the Section 72 variance process.
Cronk said the premier should have made that the requirement today and refused the extension entirely.