Employment Contract Impossible to Perform: COVID-19 An Unforeseeable Event?
Reading Time: 2 minutesBusinesses all across Canada continue to be significantly impacted by the growing coronavirus pandemic. In the last few weeks we have witnessed, and continue to witness, unprecedented business and office closures, terminations and large-scale employee lay-offs that seem to be connected to the current COVID-19 global pandemic.
As a reminder, employees are entitled to a certain amount of notice (or pay in lieu of notice) when their employment is terminated without cause.
Under section 63 of the BC Employment Standards Act (the “ESA”), where an employer terminates an employee without just cause, the following amount of notice (or pay in lieu) must be provided:
- After three consecutive months of employment – one week’s pay;
- After 12 consecutive months of employment – two weeks’ pay;
- After three consecutive years of employment – three weeks’ pay, plus one week’s pay for each additional year of employment to a maximum of eight weeks
If an employer has terminated 50 or more employees at a single location within a short time-frame, then section 64 of the ESA, which governs group terminations, applies.
The group notice requirements are as follows:
NUMBER OF EMPLOYEES | NOTICE REQUIRED |
50 to 100 employees | 8 weeks before effective date of first termination |
101 to 300 employees | 12 weeks before effective date of first termination |
301 or more employees | 16 weeks before effective date of first termination |
However, section 65 of the ESA outlines exceptions for when the requirements for employers to provide employees with individual notice of termination or pay in lieu of notice, or to provide notice of group termination, do not apply. Most notably, section 65(1)(d) provides that:
65 (1) Sections 63 and 64 do not apply to an employee
employed under an employment contract that is impossible to perform due to an unforeseeable event or circumstance other than receivership, action under section 427 of the Bank Act (Canada) or a proceeding under an insolvency Act,
If the closures are directly linked to COVID-19, and there is no way for the employee to perform work, such as working from home, the exception may apply to exclude employees from receiving compensation for length of service and group termination pay. In order to rely on this section, an employer must show two things:
- it was impossible to perform the contract; and
- impossibility of performance was due to an unforeseeable event or circumstances
The present situation involving COVID-19 is unprecedented and so it is difficult to determine at this time whether the “frustration” exception in section 65(1)(d) will apply to employees who are terminated. Therefore, each case will need to be closely assessed on its own set of facts.
If you have any questions or need specific advice about any of these statutory provisions, please contact a member of our Employment and Human Rights team. We are, as always, available by phone, email or video.
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The COVID-19 pandemic has had a profound impact on the Canadian economy and has resulted in job loss and precarious employment across various sectors. It is yet to be seen however if and how these changes will affect an employee’s entitlement to reasonable notice following a without cause dismissal. In this article, we review recent court decisions addressing the impact of COVID-19 on wrongful dismissal damages.
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The coronavirus pandemic has brought so much uncertainty with it and has turned the world of work on its head. Every employer is required to have a COVID-19 Safety Plan that assesses the risk of exposure at their workplace and implement measures to keep their workers safe. On November 24, 2020, BC issued a Public Health Order (the “Order”) requiring the use of masks in all public indoor spaces in the province. Since this Order, our Group has and continues to receive a lot of questions from business owners and employers on the mandatory masking order, in particular, what happens if an employee refuses to comply with an employer’s COVID-19 Safety Plan including an unwillingness to wear a face mask?
In this blog post, we consider whether an employer can terminate an employee’s employment for cause for refusing to wear a face mask while at work.