As we approach the third anniversary of the beginning of COVID-19-related lockdowns and policies which impacted the day-to-day lives of people all around the world, it’s interesting to see how COVID-19 policies continue to work their way into people’s everyday lives. 

One of the first ways the government became involved in assisting the economy during the early days of the pandemic was through the Canada Emergency Response Benefit, which provided Canadians who lost employment (whether they worked for someone or themselves) with income while much of the economy was shut down. 

A recent decision from the Alberta Court of Appeal shows how COVID-19, specifically CERB, continues to play a role in how the courts handle employment law matters. 

Employee given two years’ notice after employer extended work beyond planned termination date

We originally blogged about the conflict between the parties back on April 1, 2022. The main issue in that trial revolved around the employee who was notified that he would be terminated from his job because the location at which he worked would be closing. He was originally given 16 months of notice, which was set to conclude on September 11, 2019. 

When his planned termination date came and went, the employer told him that he “was being kept on” because the location was not shutting down on the originally anticipated date. The employee would stay on until June 3, 2020, when the employer gave him one more month of notice and terminated his employment. 

During the original trial, the employer asked the court to side with its position that the original termination notice should have survived beyond the originally planned termination date. However, the court referred to Alberta’s Employment Standards Code, which stays, “a termination notice is of no effect if an employee continues to be employed by the same employer after the date specified for termination of employment.” 

When providing notice of termination, an employer must tie a specific date to that notice. 

In the end, the court awarded the employee, who had over 30 years of service with the employer, with 24 months’ notice. This amounted to $134,904 in salary and $14,196 in vacation pay. However, the judge also determined that CERB benefits received by the employee should be deducted from his payment. 

Employer wants to take CERB payments out of damages it owes former employee

The employer appealed the decision, taking the position that the trial judge did not properly determine that the employee had failed to mitigate his job loss. At the same time, the employee appealed on the grounds that CERB payments should not have been deducted. 

This was a position he had also taken during the trial, during which the trial judge stated that the way CERB payments were treated in such situations was inconsistent with case law. 

However, the trial judge found that one consistent determining factor in whether to deduct CERB from damages in wrongful dismissal cases was whether they would ultimately be repayable by the employee. In the original hearing, the trial judge believed the employee would be able to keep the entirety of the CERB benefits he had received and thus deducted them from his awarded damages. It stands to reason that had the trial judge believed a portion or all of the CERB payments would have to be returned, the employee would not have had the amount deducted. 

Interestingly enough, after the decision was issued, the British Columbia Court of Appeal issued a decision that, as of the time of writing this blog, was the only appellate decision that directly addressed whether CERB payments should be deducted when awarding employees damages for wrongful dismissal. 

In the decision, referred to as Yates, the employee had appealed a trial judge’s decision to deduct CERB benefits from the damages she received following a finding of wrongful dismissal. The facts, in that case, are a little different than those in the one we are discussing here in that the employee in Yates was laid off at the start of COVID-19. The employee’s termination here was not related to COVID-19.

In Yates, the court reviewed a concept called “compensating advantage,” explained in a 2013 Supreme Court of Canada decision. The Supreme Court wrote that compensating advantages, which one could consider CERB payments to be, should be deducted when awarded damages for wrongful termination. However, when the BCCA wrote its decision for Yates, it looked at broader policy considerations which favour non-deducibility. The court wrote, 

“it seems wrong for a defendant employer who has breached the employment contract with the plaintiff to enjoy, effectively, a windfall from an income support program designed to benefit workers impacted by the COVID-19 pandemic. If a windfall is to result, it seems to better reflect the intention of Parliament that it go to the worker” 

The court in the present case found that the BCCA’s analysis was compelling and decided to adopt it. As a result, the CERB benefits received by the employer would not be deducted from their damages. 

Work with the experienced team at HMC Lawyers for your employment law needs

The employment law team at HMC Lawyers has over 130 years of combined experience helping employees and employers navigate a wide range of employment law matters, including those related to conduct in the workplace and issues concerning wrongful dismissal. We regularly help clients resolve matters, including alternative dispute resolution methods such as mediation. 

At the same time, we are ready to represent clients in litigation where necessary. If you have questions about a termination from work or your rights in the workplace or discipline that you have been subject to, please don’t hesitate to reach us online or by phone at 1-800-480-3534. We look forward to talking to you.