3585-99-ES Rich-Wood Kitchens Limited, Applicant v. Scott Lupa, Rosa Votta, Employment Standards Officer, and Ministry of Labour, Responding Parties.
Employment Practices Branch File No. 63001051
BEFORE: Caroline Rowan, Vice‑Chair.
APPEARANCES: Jacquie Moonen-DeVoest for the applicant; no one appearing for the responding employee; Jeremy Warning for the Ministry of Labour.
DECISION OF THE BOARD; November 6, 2000
This is an application for review of an Order to Pay under section 68 of the Employment Standards Act, R.S.O. 1990, c. E-14, as amended (the “ESA”). The application was filed by Rich-Wood Kitchens Limited (the “Company”) for a review of an Order to Pay in respect of termination pay found to be owing to the Company’s former employee, Mr. Lupa.
The hearing in this matter was scheduled for Thursday, October 5, 2000 at 9:30 a.m. At that time, neither the claimant, Mr. Lupa, nor a representative of Mr. Lupa, appeared at the hearing. The Board waited the normal thirty minutes and then convened at 10:00 a.m. to hear the Company’s request that the Order to Pay be rescinded.
The Company disputes Mr. Lupa’s entitlement to termination pay in the circumstances. The Company does not, however, dispute the quantum of monies found to be owing by the Employment Standards Officer in the event that entitlement is found. The sole issue in this case is therefore whether or not the claimant is entitled to termination pay in the circumstances.
The Facts
Ms. Moonen-DeVoest, the owner of the Company, gave evidence concerning the circumstances leading to the termination of the claimant’s employment, which may be briefly summarized as follows.
The claimant was originally hired in July 1992 and worked continuously thereafter until January 1999.
On or about January 13, 1999, the Company gave the claimant a letter notifying him that he was laid-off effective January 22, 1999. The Board notes that a copy of the written notice of lay-off was not introduced into evidence, since as Ms. Moonen-DeVoest explained, she had failed to bring a copy of the letter with her to the hearing. As a result, she simply testified generally as to its contents. In this respect, she stated that the letter provided to the claimant on or about January 13, 1999 is a standard form letter, which the Company uses when laying off employees. That letter generally states that the employee is being given one week’s working notice of lay-off and goes on to state that “this is a temporary lay-off” and “that we will be recalling you within the thirteen weeks”.
Ms. Moonen-DeVoest’s evidence concerning the contents of the notice of layoff did not purport to be a verbatim recitation of the words used. Instead, she provided only the gist of that letter as best as she could recall it. In these circumstances, the Board has some doubt as to whether the written notice of layoff given to the claimant made entirely clear that he would be recalled prior to the end of the thirteen (13) week period. In addition, the Board notes that the applicant has the onus of establishing that the claimant was temporarily laid off within the meaning of the ESA. If the Company wanted the Board to conclude that the written notice given to the claimant made it clear that recall would definitely occur within thirteen (13) weeks, then it was incumbent upon it to produce the letter and prove its clarity. Having failed to do so, the Board is not satisfied that the evidence before it establishes that the written notice of layoff given to the claimant provided a clear indication that he would be recalled within the thirteen (13) week period.
Ms. Moonen-DeVoest also testified that the Company has historically been required to lay off some of its employees every January. Although Ms. Moonen-DeVoest indicated that the claimant had not previously been laid off, she states that he would likely have been aware that employees who had been laid off in the past had historically been recalled within a period of between six and eight weeks.
Following the claimant’s layoff, the Company made numerous efforts to recall him to work. The first such attempt was made on March 15, 1999. At that time, the claimant informed the Company that he would return in two weeks. He did not, however, come back as scheduled. Thereafter, the Company made three further phone calls to his home, and a fourth call to his wife at her place of employment, in an attempt to reach him to find out if he was coming back to work or not. Ms. Moonen-DeVoest finally sent a registered letter on or about April 14, 1999 to the claimant at his home, which states as follows:
“This letter is to inform you that you are being recalled to work effective April 26, 1999. Please contact me sometime during the week of April 19, 1999 so that we can set up a time to meet”.
The claimant did not, however, show up for work on April 26, 1999. Instead, approximately ten (10) days later, on or about May 6, 1999, the Company received a letter from the claimant requesting his severance pay.
Ms. Moonen-DeVoest complained that various representatives of the Company had contacted the Ministry of Labour and had been informed that it was not important if the Company did not provide a precise date of recall, provided that the Company recalled the individual laid off within thirteen (13) weeks. Representatives of the Company were informed that that was all that was required. As a result of this representation, the Company simply indicated “unknown” on the claimant’s Record of Employment form in response to the written question regarding the claimant’s expected date of recall.
The Ministry did not dispute that one of its representatives had informed (and in the Ministry’s current view misinformed) the Company that simply recalling the employee within a period of thirteen (13) weeks is sufficient to create a temporary lay-off. The Ministry’s representative, however, explained that the Ministry had introduced a policy change on or about February 12, 1999 as a result of the decision in Stolze v. Addario (1997) 1997 CanLII 764 (ON CA), 36 O.R. (3d) 323 (Court of Appeal for Ontario). Briefly, the Ministry explains that its policy now requires that a lay-off notice clearly provide a recall date in order to be treated as a temporary lay-off.
Decision
- The issue to be determined in this case is whether or not the claimant was “temporarily laid off” within the meaning of the exception to the obligation to provide notice of termination contained in subsection 57(10) (b) of the ESA. As previously noted, the Employment Standards Officer found that the claimant had not been temporarily laid off but rather had been given notice of indefinite lay off, since he was not provided with a definite date of recall. The relevant portions of section 57 of the ESA read as follows:
- (1) No employer shall terminate the employment of an employee who has been employed for three months or more unless the employer gives,
(f).......... six weeks notice in writing to the employee if his or her period of employment is six years or more but less than seven years;
and such notice has expired.
(10) Subsections (1) and (2) do not apply to,
(b) an employee who is temporarily laid off, as defined in the regulations;
(14) Where the employment of an employee is terminated contrary to this section,
(a) the employer shall pay termination pay in an amount equal to the wages that the employee would have been entitled to receive at his or her regular rate for a regular non-overtime work week for the period of notice prescribed by subsection (1) or (2), and any wages to which the employee is entitled;
- The relevant provisions of Regulation 327 to the ESA read as follows:
- For the purposes of section 57 of the Act,
"temporary lay-off" means,
(a) a lay-off of not more than thirteen weeks in any period of twenty consecutive weeks,
"termination of employment" includes a lay-off of a person for a period longer than a temporary lay-off;
"week of lay-off" means a week in which a person receives less than one-half of the amount the person would earn at his or her regular rate in a normal non-overtime work week, but shall not mean a week in which a person,
(a) was not able to work or not available for work,
(b) was subject to disciplinary suspension, or
(c) was not provided with work by the employer by reason of any strike or lock-out occurring at his or her place of employment or elsewhere.
- …
(3) Notice of indefinite lay-off shall be deemed to be notice of termination of employment.
(4) Where a person who has been laid off is no longer temporarily laid off as defined in this Regulation, the employment of that person shall be deemed to have been terminated upon the first day of the lay-off and the employer shall pay to that person an amount calculated in accordance with subsection 57 (14) of the Act, as though the employment of the person had been terminated forthwith without notice.
In Stolze v. Addario, cited above, the Court of Appeal had occasion to consider whether or not an employee was temporarily or indefinitely laid off pursuant to the terms of the ESA. In that case, the Court of Appeal found that the intention of the employer was irrelevant to a determination of this issue. Instead, the Court of Appeal had regard to the communication between the employer and the employee at the time of layoff to determine whether an objective assessment of that communication suggested that the layoff was temporary or indefinite.
In the circumstances of that case, the Court of Appeal concluded that the employee in question had been indefinitely laid off notwithstanding that the notice of layoff provided by the employer specifically indicated that the layoff was temporary. In doing so, the Court of Appeal had regard to the entire communication, which contemplated that the employee may be recalled within the period of a temporary layoff, or, alternatively, may not be recalled prior to that time. In these circumstances, the Court of Appeal found that an objective assessment of the communication as a whole was that the employee had, in fact, been given notice of indefinite layoff.
Adjudicators under the ESA have also considered the distinction between a temporary and an indefinite layoff. In Control Comp. Consultants Inc. E.S.C. 1494-97-ES (December 5, 1997, D. Randall), the Referee found that the employee in question had not been temporarily laid off, but rather had been given notice of “indefinite layoff” within the meaning of subsection 8(3) of Regulation 327 cited above. In doing so, the Referee summarized the jurisprudence concerning the interpretation of an “indefinite layoff” within the meaning of subsection 8(3) as follows:
While there has been some disagreement amongst adjudicators under the Act respecting the meaning of this section, the vast majority have concluded that the section means what it says. If a notice of layoff sets out no date of recall, the employee can treat it as a notice of termination without waiting 13 weeks. This interpretation was found to be reasonable by the Divisional Court in Dominion Hosiery Mills Incorporated and Maria Mattiolli, (January 8, 1997, unreported).
In that case, the Referee concluded that the employee in question had been given notice of indefinite layoff within the meaning of subsection 8(3) of Regulation 327. It did so on the basis that there was nothing said by the employer at the time of layoff, which would have indicated to the employee that he was going to be recalled within thirteen (13) weeks. In this respect, the Referee noted that the Record of Employment provided to the employee stated that his recall date is “unknown”.
In the present case, the Company provided the claimant with written notice of layoff on or about January 13, 1999 effective one week later. According to Ms. Moonen-DeVoest, that notice did not identify a specific date of recall, but did indicate that the layoff was a temporary one and that the employee would be recalled within the thirteen (13) week period. As previously noted, however, the Board is not persuaded on the evidence before it that the written notice of layoff made entirely clear that the claimant would be recalled prior to the end of the thirteen (13) week period. In any event, the Record of Employment issued to the employee thereafter, like the one referred to in the Control Comp. Consultants Inc decision cited above, stated that the claimant’s recall date is “unknown.” As such, the information provided to the employee on or shortly after his layoff was, at best, equivocal as to whether or not he could expect to be recalled prior to the end of the thirteen (13) week period.
The facts in this case are therefore to some extent similar to those in Old Ontario House (1982) Ltd., (Decision No. ES 04/93, January 15, 1993, T. Wacyk). In that case, the claimant had initially been told at the time of layoff that he would be recalled within three or four weeks. The claimant was subsequently told that the employer had, in fact, “no idea” when he would be recalled. Ultimately, the claimant was recalled in the thirteenth week of layoff. In those circumstances, the Referee found that the situation changed from that of a “temporary layoff” to that of an “indefinite layoff” at the time the employer communicated to the employee that he did not know when the employee could anticipate returning to work. In doing so, the Referee adopted the following principle articulated in Rogers Dairy Limited, (Decision No. ESC 561/78, December 14, 1978, Davis):
Reading the Act as a whole, it is clear that the mischief which it is sought to cure is the unexpected loss of employment without reasonable opportunity afforded the employee to seek out alternative employment. The employee is therefore entitled to know at the time he is given notice of the interruption in his employment, whether it is a temporary interruption of relatively short duration … or is of longer period in which case it will be viewed as a “termination of employment”. (p.4)
- In concluding that an indefinite layoff was created when the employer advised the employee that it did not know when the employee would be recalled, the Referee in Old Ontario House, cited above, then reasoned as follows:
… To enable employers to tell employees that they have no idea as to when they may be called back until the 13 week deadline brings some closure to the matter denies the purpose of subsection 9(3). It allows employers to keep employees hanging, as happened in this instance, without the information they require in order to make the decisions necessary to get on with their lives, and without the financial buffer of termination pay to deal with the sudden loss of income.
The Employment Standards Act does not require that employees who are being laid off be given any notice of the lay-off. Laid-off employees may, therefore, find themselves quite suddenly and through no fault of their own, in an extremely precarious financial situation. Employees faced with a lay-off of a definite time can decide if they are in a position to give priority to reemployment with the same employer or whether they will hold themselves out as looking for full time employment, which would no doubt make them more attractive on the job market.
Interpreting subsection 9(3) as triggering entitlement to termination benefits if employers cannot advise employees when they will be recalled, requires employers to make their best efforts to act responsibly and honestly with regard to the information that they give employees about the length of their lay-off. This enables the laid off employees to make informed decisions with regard to how they will deal with their situation. If the employer cannot indicate when they can anticipate a recall, then employees at least have the cushion of their termination pay to assist them with their unemployment.
Most importantly, interpreting subsection 9(3) to allow for an indefinite lay-off without it being an “indefinite lay-off” for the purpose of that subsection, in my view, renders that entire section meaningless. If telling an employee that the employer has “no idea” as to when they will be recalled is not an indefinite lay-off, it is hard to contemplate what would be, other than an obvious termination which makes the section redundant.
For the above reasons I find that subsection 9(3) applies to trigger entitlement to rights flowing from termination of employment in circumstances where an employer does not give an employee an indication of when he or she can expect to be recalled.
As a result, I find that the Applicant’s situation changed from that of a “temporary lay-off” to an “indefinite lay-off” at the time Mr. Cofell communicated to the Applicant that he did not know when the Applicant could anticipate returning to work. That he was subsequently recalled does not change this fact.
The Board agrees with, and adopts, the reasoning in that case. The ESA provides an exception to the requirement to provide notice of termination to employees who are “temporarily laid off” within the meaning of the regulations, but employees who are given notice of “indefinite layoff”, are deemed to have been given notice of termination of employment. Where an employer fails to provide the employee with a definite statement that the layoff will end in the relatively brief thirteen (13) week period, the employee is entitled to treat the notice of layoff as notice of termination, to make decisions thereupon and to receive his/her statutory entitlement.
In the present case, the Board is not satisfied that the evidence before it establishes that the Company provided the claimant with a definite statement that he would be recalled prior to the end of thirteen weeks. Even if the Board were to accept that the original notice of layoff did so, the claimant was at best given mixed messages from the Company about whether or not he could expect to be recalled within thirteen (13) weeks of layoff. In this respect, the Board notes that the information subsequently provided to him by the Company on the ROE form, in effect, stated that the Company “did not know” when he would be recalled. While it was open to the Company to indicate a date just prior to the end of the thirteen (13) week period on the ROE form (with perhaps some additional comments that it could be earlier), the Company did not do so.
An employee faced with a sudden loss of income is likely to scrutinize all of the information provided to him from the Company in order to assess whether or not he should be seeking alternate full-time employment or whether or not the layoff will be for a relatively brief period. The employee is entitled to know more than that there is a reasonable likelihood that he will be recalled or that it is probable based on the Company’s experience with other employees in prior years. In all of the circumstances, the Board finds that an “indefinite layoff” was created when the Company, in effect, communicated to him that it “did not know” when he would be recalled. Following receipt of the ROE, the claimant did not have (or at best no longer had) a clear statement from the Company that his layoff was temporary.
The fact that the claimant was ultimately recalled within the thirteen (13) week period does not change this fact. In addition, as the Referee noted in Shaver-Kudell Manufacturing, (Decision No. ES-352-97, April 22, 1997, G. Misra), “[t]he Act places no obligation on an employee to ascertain the length of a lay-off, or to clarify employment status”.
The Company’s primary complaint is that the Ministry of Labour misinformed it as to its obligations under the ESA and that in these circumstances, the Order to Pay should be rescinded. While the Board notes that it is certainly regrettable that representatives of the Ministry of Labour misinformed the Company as to its obligations, the Board has no authority under the ESA to hold the Ministry accountable for that error. As the Referee noted in Northern Radiological Services Ltd., (Decision No. 196-92, Februrary 18, 1994, L. Alter) at p. 4, “there is no mechanism in the Act by which [the adjudicator] could compel payment by the Ministry for its error nor should [the adjudicator] have the Employee bear the burden of the Ministry’s delusion.”
Disposition
- For all of these reasons, the Board finds that the claimant was entitled to termination pay in lieu of written notice of termination. Since the Company took no issue with the amount of the Order to Pay in the event entitlement is found, the Order to Pay is hereby affirmed, and the request for review is dismissed.
“Caroline Rowan”
for the Board