In New Brunswick, employers are required to provide employees with notice of layoff, with some exceptions. The Employment Standards Act provides an exception which allows employers to lay off employees without notice when there is a lack of work due to a reason which was unforeseen by the employer. A layoff under this section can last for the period of time that the lack of work continues due to the unforeseen reason.
Is COVID-19 an Unforeseen Reason?
According to the case law surrounding this section of the Act, an employer is required to demonstrate several criteria in order to establish that the layoff was due to a lack of work for a reason unforeseen by the employer. The employer must be able to demonstrate:
- there was a lack of work;
- the circumstances giving rise to the lack of work were unforeseen by the employer; and
- there was a justifiable reason for having selected the particular employee to lay off.
The COVID-19 pandemic, unlike lack of work due to escalating problems in the employer’s industry over a course of years, is not a situation that could have been contemplated by an employer. A lack of work due to the COVID-19 pandemic would qualify as a reason unforeseen by an employer. This was confirmed by the Province of New Brunswick on its “COVID-19 Guidance for Businesses” page. As COVID-19 is a reason unforeseen by an employer, employers laying off employees for a lack of work due to COVID-19, for the length of time that the lack of work continues due to COVID-19, are not required to provide notice to employees.
However, while employers may not be required to provide notice of layoff in these circumstances, this does not necessarily eliminate an employer’s common law severance obligations that may be owed to an employee when the employment relationship is terminated. These obligations should be considered on an individual basis in consultation with legal counsel.