The What, When, Who and How of Employee Recall from Temporary Layoff

June 19, 2020

Written By Laura Inglis and Stephanie Henry

In response to the COVID-19 pandemic, governments across Canada mandated the shutdown of businesses and workplaces in order to control the spread of the virus and "flatten the curve". In the face of closures and falling revenue, many employers turned to temporary layoffs in an effort to reduce payroll expenditures. As the community spread of the virus slows, provincial governments across the country are cautiously reopening the economy. This means that some employers are turning their minds to recalling employees from temporary layoff. However, given the uncertain projections of the pandemic in conjunction with the significant economic impact COVID-19 has left in its wake, employers must be proactive and strategic in recalling employees to a radically different work environment. In this blog post, we address employer considerations in recalling employees in the face of COVID-19.

What Is a Recall

A recall is the process of bringing employees back to work after placing them on a temporary layoff. As set out below, the relevant employment standards legislation, any applicable company policies and the provisions of a collective agreement in unionized environments govern the recall process.

Employment standards legislation in each province and territory along with the Canada Labour Code (which governs federally regulated employers) have provisions allowing employers to temporarily layoff employees without triggering statutory termination obligations. In each jurisdiction, a layoff, which exceeds the statutory temporary layoff period, will crystalize into a permanent termination and trigger notice of termination or pay in lieu thereof obligations. By way of example, sections 62 and 63 of the Alberta Employment Standards Code provide that where an employee is laid off for one or more periods exceeding, in total, 60 days within a 120-day period, the employment relationship is severed, triggering notice of termination obligations, with some exceptions.

In response to COVID-19, some provincial and territorial governments enacted legislation which extended the time in which an employee could be placed on a temporary layoff before the layoff crystalized into a termination. In Alberta, for example, the provincial legislature extended the temporary layoff period on April 6, 2020, such that a temporary layoff did not become a permanent termination until "more than 120 consecutive days" had passed. With the first reading of Bill 24 on June 18, 2020, the temporary layoff period in Alberta was extended to 180 days. In light of the highly changeable state of the law, employers should confirm the length of the temporary layoff period and any legislative modifications made in response to COVID-19.

When Should Employers Recall Employees

Before recalling employees, employers should first determine whether public health orders allow resumption of operations and whether they can comply with any applicable public health guidelines. If there is work for employees (even some employees), which can be done safely and in compliance with public health orders and other government directives, employers can consider bringing employees back to the workplace. Please see our prior blog post on best practices for bringing employees back to work.

In terms of the timing of the recall, employers should also consider when the temporary layoffs at issue will become permanent terminations. The employer must recall the employee before the end of the statutory temporary layoff period to avoid triggering termination obligations.¹ As such, where the employer cannot recall all of its employees at the same time, and where the employer conducted layoffs in stages, the employer may want to consider recalling those employees who were temporarily laid off first, as their termination entitlements will crystallize sooner than those employees who were subsequently laid off.

Who Should the Employer Recall

In a unionized workplace, collective agreements often specify the order in which employers must recall employees from a layoff. Where an employment contract or company policy provides a "greater benefit" than the statutory minimum recall requirements, the employer must comply with the greater benefit. Otherwise, absent specific provisions in the applicable employment standards legislation or a company policy, employers are free to recall employees as they choose, as long as they do not do so in a discriminatory manner. For example, making recall decisions based on age, gender, ethnicity, family status, or race contravenes human rights legislation. An employer must be able to point to objective reasons for recalling one employee as opposed to another.

If the employer is unable to recall all of their employees, one consideration in determining who to recall may be the severance costs associated with ending the employment relationship. In this regard, employers may want to recall longer service employees as opposed to shorter service, since longer serving employees tend to be owed greater severance at termination.

Practically, if an employer cannot recall all of its employees, decisions on who to recall should be guided by who is critical to the business, when the employee's temporary layoff will become a permanent layoff, and who will be costly to part ways with (severance or otherwise).

How to Recall Employees

Before recalling an employee, an employer should review the applicable employment standards legislation and ensure compliance with any legislative recall requirements. For example, Alberta's Employment Standards Code sets out specific requirements for a recall notice. In Alberta, a recall notice must: (i) be in writing; (ii) be served on the employee; (iii) and state that the employee must return to work within seven days of the date the employer serves the recall notice on the employee.

To the extent that an employer policy or employment contract provides employees with a "greater benefit" than the minimum statutory recall requirements, the employer must act accordingly. In addition, collective agreements often provide a detailed recall procedure, which employers in a unionized workplace must abide by. Where the legislation, collective agreement, employment contract or company policy do not provide the amount of notice an employer must give before the employee is required to return to work, the employer must provide a reasonable time frame for the recall. 

In every case, the recall notice should be in writing and should specify at least: (i) the date the employee is expected to return to work; (ii) the position the employee will occupy on their return; (ii) the compensation the employee will receive; and (iv) the schedule they will work. Practically speaking, employers should also remind employees to notify the federal government of their return to work, as their return will likely affect their ability to collect the Canadian Emergency Response Benefit (CERB) or Employment Insurance benefits. Moreover, the employer should state that despite the recall, the employer cannot provide a guarantee of future employment and that the employee may be temporarily laid off in the future.

Some jurisdictions allow the employer to terminate the employment relationship, without triggering termination obligations, when the employee does not return upon recall. By way of example, in Alberta, if the employee fails to return to work within seven days of the recall notice, the employee is not entitled to termination notice or termination pay. With that said, before terminating an employee's employment, the employer should ensure the employee in fact received the recall notice. Furthermore, where an employer recalls an employee to a position that is materially different from their pre-temporary layoff position, the employer may not be able to rely on statutory provisions to avoid termination notice and could face exposure at common law for constructive dismissal. There are strategies that employers can use to mitigate the risk of constructive dismissal claims, even where they are recalling employees back to different positions at reduced rates of compensation.

Other Considerations

Before an employer can recall an employee to the workplace, it must ensure that it can provide a safe and healthy work environment. Under occupational health and safety legislation, employers generally have an obligation to take reasonable steps in the circumstances to protect the health and safety of their employees. Where an employee has a reasonable basis to believe that work conditions are unsafe, including due to COVID-19, they may refuse to attend for work. In such cases, generally, the employer has a statutory obligation to investigate the work place hazard and eliminate or reduce the same.

Where an employee cannot return because they are required to quarantine or self-isolate in accordance with public health orders or directives, the employer cannot require the employee to return to work until they are able to safely do so. In these cases, the employee may be entitled to a job protected leave. Similarly, where an employee is unable to return to work because they are caring for someone with COVID-19 or do not have child care because of school and daycare closures, the employee may also be entitled to a job protected leave or some form of accommodation.

There may be instances where an employee states that they are unable to return to the workplace because they believe that they are at a high risk of contracting COVID-19 or will likely endure significant complications should they contract the disease. During the pandemic, provincial legislation across the country has made it clear that employers are not to ask for medical documentation to substantiate an absence from work due to COVID-19. With that said, in some instances, it may be appropriate for the employer to seek medical documentation from the employee's physician to substantiate why they are unable to return to work while the pandemic persists. Where the employee has a reasonable basis to remain away from the workplace, the employer must consider how to accommodate the employee and should obtain legal advice before taking any adverse action against the employee for failing to return to work.

These are unprecedented times and recalling employees can present complex legal issues. It is critical that employers adopt a strategic recall strategy to navigate these issues in a thoughtful and proactive manner. Bennett Jones' Employment Services group can assist employers in structuring employee recall in a manner that helps to mitigate the risks associated with the layoffs and leaves due to COVID-19. 

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