Unlike most employment relationships in Ontario, which are governed by the Employment Standards Act, federally regulated employees and employers are subject to the Canada Labour Code (the “Code”). The Code sets out the rights and responsibilities of employers and employees in federal industries such as broadcasting, air travel, banking and Crown Corporations. There are three parts to the Code; the first deals with industrial relations. The second part of the Code deals with occupational health and safety. The third part of the Code regulates employees’ conditions of employment.

Part III of the Canada Labour Code

Part III of the Code allows employers to temporarily lay off employees for limited time periods. There are strict limitations on how long a temporary layoff can last before an employee will be considered terminated, and become entitled to pay in lieu of reasonable notice. However, due to the pandemic, the federal government has decided to extend the temporary layoff periods in June of 2020, and once again, in November of 2020.

Part III of the Code establishes that employers have to meet minimum working conditions in the federally regulated working sector. Those minimum working conditions include statutory holidays, vacation time, minimum wages, and hours of work.

There is a list of federally-regulated industries that fall under Part III of the Code, and they include, but are not limited to:

• Television and Radio Broadcasting;
• Road transportation services that cross provincial or international borders;
• Telecommunications, such as, telephone, Internet, telegraph, and cable systems;
• Air transportation, including airlines, airports, aerodromes, and aircraft operations;
• Canadian banks, but also authorized foreign banks; and
• Port services, marine shipping, ferries, tunnels, canals, bridges, and pipelines that cross international or provincial borders.

Under Part III of the Code, federally regulated employers can temporarily lay off employees for up to three or six months. The three-month maximum applies where employers did not provide notice with a recall date. However, in situations where the employer did provide notice with a recall date, then the employer can temporarily lay off an employee for up to six months. Given the unique challenges the pandemic has presented for most employers, the federal government has decided to temporarily increase these lay off periods.

What an Extension of the Lay Off Period Means for Federally Regulated Employees and Employers

The Canadian Labour Minister announced the first extension of the allowable temporary layoff period on June 23, 2020. That initially meant:

• For employees laid off prior to March 31, 2020, the time period was extended by six months or to December 30, 2020, whichever occurred first;
• For employees laid off between March 31, 2020, and September 30, 2020, the time period was extended until December 30, 2020, unless a later recall date was provided in a written notice at the time of the layoff.

However, on November 9, 2020, the federal government, once again, announced that it would further extend the layoff periods, which now means:

• Should an employee be laid off for a period of 3 months or less, before March 31, 2020, the time is extended by 9 months after the day on which it would otherwise end; accordingly, an employer would have up to 12 months to recall the employee before the lay-off is deemed to be a termination of employment;
• Regarding the period between March 31, 2020, and December 31, 2020, the time is extended and the employer has until March 31, 2021, to recall the employee before the lay-off is deemed to be a termination of employment;
• Should an employee be laid off with an expected recall date or fixed period, prior to March 31, 2020, the date specified in the written notice will be extended by 9 months or to March 31, 2021, whichever is earlier and the employer would have up to that period or date to recall the employee before the lay-off is deemed to be a termination of employment;
• Throughout the period between March 31, 2020, and December 31, 2020, the term of the lay-off is extended and the employer has until March 31, 2021, to recall the employee before the lay-off is deemed to be a termination of employment unless a later recall date or fixed period was provided in a written notice.

There are some employees to whom these extensions do not apply. Those employees include, but may not be limited to, employees who were let go before June 22, 2020, or employees who were dismissed before November 9, 2020, because the employer did not apply the extension that was announced on June 23 or November 9th, whichever one applies. These extensions also do not apply retroactively. Furthermore, the extension provisions will not apply to layoffs that occur after December 31, 2020.

The rules for these temporarily extended layoff periods are complex, and it might be prudent to contact an employment lawyer if either federal employers or federal employees are dealing with temporary layoff situations.

For advice on these and other employment or labour law matters, contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins LLP. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416-364-9599 to schedule a consultation.