The Important Difference Between Layoffs and Termination feature image

The Important Difference Between Layoffs and Termination

Getting laid off and losing your job often have the same consequences for employees – the loss of employment. However, while the distinction between a termination and a layoff may be lost in everyday conversation, the two are distinct, especially in how they apply to employment law matters. This distinction was the topic of a recent decision from the Provincial Court of Alberta. In the case, the employee had taken the position that he had been terminated, while the employer argued he had been laid off.

The employment and its conclusion

The employee, who is a commercial pilot, started working for the employer on June 16, 2014. The employer operated a business offering charter and scheduled flight services as well as medivac flying.

An employee handbook stated that upon the completion of 12 months of service, employees would be entitled to severance pay upon termination or layoff. The handbook also said, “Employees are entitled to two (2) regular days wages for each full year that the employee has worked for the employer prior to termination.  The minimum benefit is five (5) days wages.”

It should be noted that the handbook did not represent an employment contract. This was stated in the handbook.

On October 28, the employee was promoted to Base Captain in Calgary. However, two incidents occurred which the employer said gave rise to his termination or layoff. The first was an incident where the employee left an airplane outside overnight instead of in a hanger. The second was when he failed to file a “company approved operation flight plan.”

On June 30, 2016, the employee joined a phone conference where he was advised, “… we are doing some restructuring and some downsizing here and unfortunately we are calling to let you know that we do have to lay you off effective today.”

It was the employee’s understanding that he had been terminated, not laid off. He was given severance pay of $1,144.45.

Was he terminated or laid off?

The court did not consider the two incidents that the employer said led to the termination. The conference call in which the employee learned he lost his job made no mention of the incidents. The court also noted that the employment agreement between the employer and employee was somewhat confusing.  However, the court noted that the employee has a right to pursue a remedy under common law.

According to the Employment Standards Code, layoffs have to be accounted for in employment contracts, which the was not the case in this situation. There is no contract between the parties that spells out the employer’s right to lay off employees. Because of this, the court held,

“I find that the defendant terminated the plaintiff’s employment without cause.  I find there is no evidence and a complete failure resting upon the defendant to establish the plaintiff breached his contract to the extent that the defendant was entitled to terminate the plaintiff’s employment without notice.  I am further of the opinion that having regard to the length of service, the duties and scope of the services provided, the level of responsibility, the age of the plaintiff and the circumstances of his termination that he was entitled to five months’ notice of the termination of his employment.”

Through early and forward-thinking consultation with a knowledgeable employment lawyer, parties can proactively address the legal implications of a termination. HMC Lawyers endeavours to offer exceptional advice at reasonable rates, so clients can consult with counsel from the outset and save money in the long run by minimizing legal risk and exposure to litigation.

To make an appointment and get advice about an employment matter, including wrongful or constructive dismissal claims, call 1-800-480-3534 or contact us online. We represent clients in Calgary, throughout Alberta, and across Western Canada.

 

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