Extension of Temporary Layoff Periods for Federally Regulated Employees (Updated Dec 10 2020)

The COVID-19 pandemic continues to significantly impact workplaces in Canada and around the globe. Due to severe economic hardship, many employers have temporarily laid off their employees and face uncertainty as to when their employees can return to work.

Are you a federally regulated employee?

Federally regulated employees are governed by the Canada Labour Code (“CLC”). Contrarily, provincially regulated employees are governed by different legislation such as Ontario’s Employment Standards Act, 2000. The main sectors governed by the Code are as follows:

  • Banking 
  • Interprovincial/international transportation (eg. trucking companies, railways)
  • Airports, and Air transportation 
  • Television, Telephone, Radio and Cable systems
  • Fisheries
  • Grain Elevators
  • Uranium Mining and Processing
  • First Nation Activities and Crown Corporations

For lists of federally regulated employees read our post List of Federally Regulated Companies in Canada. Often, whether you are a federally regulated or provincially regulated employee is factually based. If you are unsure whether you are a federally regulated employee, it is recommended to consult with an experienced employment lawyer. 

Canada Labour Code Amended to Extend Temporary Layoffs

Previously, a temporary layoff under the CLC was 3 months or less. However, a temporary layoff could last more than 3 months but less than 6 months if the employer notified the employee of the recall date in writing. Once these time periods expire and the employee has not been called back to work, their employment would be deemed terminated and they would be entitled to severance pay.

To give employers more time before they would be liable for severance pay and to allow them longer to figure out how to recall employees, on November 9, 2020, the federal government has temporarily extended the temporary layoff periods to the following:

  • For those laid off before March 31: By 9 months after the day on which it would otherwise end, therefore, an employer would have up to 12 months to recall the employee before the lay-off is deemed to be a termination of employment;
  • For those laid off between March 31 and December 31, 2020: An employer has until March 31, 2021 to recall their employee before the lay-off is deemed to be a termination of employment.

The extensions do not apply retroactively. Employees are not eligible for the extension if: 

  • They were terminated prior to June 22, 2020, or, 
  • Their employment was terminated prior to November 9, 20200, because they employer chose not to apply the extension that came into force on June 22, 2020. 

A temporary lay-off does not impact an employee’s continuity of employment for the purposes of calculating severance and termination pay.

During the temporary layoff period employees are not considered to be terminated,  however, the changes described above are temporary and will not apply to employees who are laid off after December 31, 2020.

For more information about the rights of federally regulated employees during COVID visit our article COVID-19 and Federally Regulated Employees: What Are My Rights?  Monkhouse Law is an employment law firm in Toronto with a particular focus on employees’ issues. We help employees all over Canada, give us a call for a free 30-minute phone consultation.

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