Understanding your rights and responsibilities during a temporary layoff in Alberta can feel overwhelming. The situation often involves complex legal ideas like constructive dismissal, wrongful dismissal, and severance pay. Whether you are an employee facing an uncertain future or an employer navigating workforce adjustments, a clear grasp of the rules is essential. This guide clarifies the key elements of Alberta’s Employment Standards Code to help you manage these difficult circumstances.

What Does “Temporary Layoff” Mean in Alberta?

In Alberta, a temporary layoff is not a termination. It is a specific legal status where an employer temporarily suspends your work and pay without formally ending the employment relationship. However, this status is strictly time-limited.

For a layoff to be considered temporary, it must not exceed 90 days within a 120-day period. If the employer does not recall the employee back to work within this window, the law automatically treats the situation as a permanent termination of employment. At that point, the employee is legally owed termination pay.

When is a Temporary Layoff Permissible?

An employer cannot simply decide to lay off an employee. A legal temporary layoff is only possible under one of these conditions:

• The employee’s written employment agreement contains a clause that allows for it.

• Temporary layoffs are a widely accepted and common practice within that specific industry, such as in seasonal construction or oil and gas.

• The employee explicitly consents to the layoff.

If none of these conditions are met, an employer imposing a layoff is likely engaging in what is known as constructive dismissal.

The Risk of Constructive Dismissal

Constructive dismissal happens when an employer makes a fundamental change to your employment terms without your permission. Forcing a layoff without the legal right to do so is a classic example. When this occurs, the employee has the right to treat the employment relationship as terminated and can pursue a claim for a full severance package.

Understanding Termination and Severance Pay

When a temporary layoff becomes a permanent termination, or in cases of wrongful or constructive dismissal, compensation is required. The amount of severance pay, or termination pay, is not based on the minimums in the Employment Standards Code alone. Common law provides for much more and considers several factors to determine a fair amount, including your:

• Length of time with the company

• Age and position

• The current job market and your chances of finding similar work

A wrongful dismissal occurs if an employer ends the employment relationship—either directly or through an illegal layoff—without providing the appropriate amount of notice or pay in lieu of notice. If you believe you were dismissed unfairly, you can take legal action to recover the compensation you are owed.

A Guide for Employees Facing a Layoff

If you have been notified of a layoff, it is important to act strategically.

1. Examine Your Employment Contract: First, check your contract for any language regarding temporary layoffs.

2. Seek Professional Advice: Before you agree to anything, consult with an employment lawyer to fully understand your rights and the options available to you.

3. Weigh Your Choices: You can choose to accept the temporary layoff and wait to be recalled, or, if the layoff was not permissible, you can claim constructive dismissal and seek severance.

Key Obligations for Employers

For employers, compliance is critical to avoid costly legal claims. You must:

• Provide clear, written notice of the layoff that specifies it is temporary and references the relevant sections of the Employment Standards Code.

• Strictly adhere to the maximum 90-day layoff period.

• Use a formal written recall notice, giving the employee at least seven days to return.

• Ensure the employee returns to the same or a comparable position without negative changes to their employment terms.

Failure to follow these steps can easily lead to a successful claim for wrongful or constructive dismissal.

Why You Should Consult an Employment Law Firm

The laws surrounding layoffs in Alberta are nuanced. An experienced employment law firm provides vital support for both sides. They help employees secure the fair compensation they deserve and guide employers in maintaining compliance to prevent legal disputes.

Ultimately, navigating a temporary layoff requires careful attention to the law. Protecting your interests, whether as an employee or an employer, starts with being well-informed. If you are facing this situation, seek trusted legal guidance.

Contact us today for a consultation to ensure your rights are protected.