During the COVID-19 pandemic many employees suddenly found themselves laid off by their employers and this issue remains one that is raised by employees.
Generally speaking, employers are not entitled to lay off employees on a temporary basis unless they have the right to do so pursuant to the employee’s contract. Otherwise, what might be labelled by the employer as a “layoff” can be construed by the employee as a wrongful dismissal as long as the employee does not condone (or agree) to the layoff.
Court of Appeal Decision in Pham v Qualified Metal Fabricators
In the case of Pham v. Qualified Metal Fabricators Ltd., 2023 ONCA 255, the Plaintiff was a welder who worked for his employer for nearly 20 years. In March of 2020, as the world shut down, the employer laid off a large number of its employees, including the Plaintiff. This was the first time the Plaintiff had been laid off during his career with the company. He was told that the layoff would be temporary and that he should hope to be recalled to work in a few weeks. Later, the layoff was extended unilaterally by the employer three additional times with the last extension starting on December 9, 2020 which was set to end September 4, 2021.
In December 2020, instead of accepting that his employer was able to lay him off for an additional 10 months, the Plaintiff sought out legal advice. That month, he retained a lawyer who wrote to the employer saying that the Plaintiff had, in fact, been wrongfully dismissed due to the layoff.
Importantly, while the Plaintiff did not explicitly agree to the layoff and subsequent extensions, he also did not speak up or object until approximately 9 months into the layoff.
As a result of the Plaintiff’s silence and lack of consent to the layoff, the Court of Appeal found that unless an employee takes positive action confirming their agreement to a temporary layoff, silence alone will not be considered condonation of a temporary lay off.
In order for a temporary layoff unilaterally imposed by the employer to be condoned by the employee, the employee must take a positive action confirming their acceptance of the layoff.
Employees should feel empowered to seek out legal counsel in the event of any layoff or unilateral change to their employment by their employer promptly. However, in the case of a layoff, even if time has passed, an employee should still seek out counsel as they may be seen as having not condoned the change to their employment.
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