When business is slow, it’s common to hear employers talk about laying off employees. In these situations, the employer’s intent isn’t to end the employment relationship but to use temporary layoffs until business picks back up.

While a temporary layoff is a logical solution for dealing with a decline in business, many employers need to keep in mind that the Employment Standards Act in BC only permits temporary layoffs in very particular circumstances.

When Can You Lay Someone Off Temporarily?

The BC Employment Standards Act only allows employers to temporarily layoff employees in these circumstances:

• The employee’s contract permits it.
• The employer is in a sector where temporary layoffs are a standard industry-wide practice. For example, work cannot be performed during the “break-up” season in logging.
• The employee agrees to a temporary layoff.

How Does a Temporary Layoff Work?

Where allowed, the maximum time an employee can be temporarily laid off is 13 weeks in a consecutive 20-week period. This period begins on the first day of the layoff. 

If an employee earns less than 50 percent of their regular wages in any week within the 20 weeks, it will also count towards the 13 weeks.

Termination of Employment

If an employee is laid off, except in the circumstances stated in BC’s Employment Standards Act, the layoff will amount to a termination of their employment. In that case, they must receive termination/severance pay.

A layoff also becomes a termination of employment once it exceeds 13 weeks in a consecutive 20-week period.

Employer Tips Regarding Temporary Layoffs

• Remember, a layoff, temporary or not, amounts to a termination of employment unless it falls within the limited situations listed in BC’s Employment Standards Act.
• If your business often experiences slow periods, consider adding a clause in your employment agreements that permits temporary layoffs.
• Check whether you’re in an industry where temporary layoffs are a common, industry-wide practice.
• If your circumstances do not fall within the first two scenarios of legally permissible layoffs, check whether the employees will agree to a temporary layoff and get their consent in writing.

Layoffs and Employment Insurance

The Government of Canada has an Employment Insurance (EI) program to provide income support to eligible individuals who cannot work or have lost their jobs.

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