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Canada Labour Code: Can an Employer Claim Layoff for an Employee Returning from Illness/Injury?

Whitten and Lublin | Mar 21, 2018

The Canada Labour Code (The Code) applies to employees working within federally regulated industries. This includes industries such as telecommunications, forestry, mining, air transport and more. Under The Code, employers can only terminate an employee that has served for over a year due to misconduct that justifies dismissal. If a termination is not a result of misconduct, if challenged the Canadian Industrial Relations Board (CIRB) may imposed remedies for an unjust dismissal. There is an exception to this; if an employer shows the termination was a layoff then it cannot be challenged.

In terms of an employee that has taken a sick leave only to have been told that their job is not longer available, employers may find it difficult to claim a layoff. In order to claim a layoff, an employer must prove a discontinuance of a function. This may entail merging of departments, technological implementation, work reorganization or a lack/slowdown of work. The employer will bear the burden of proving this to be the case if claiming a layoff.

Lastly, a layoff cannot be claimed because other workers have been hired in place of the worker that has taken a leave of absence. In being consistent with the above, hiring a replacement for the duration of the leave does not prove a discontinuance of a function; conversely, it shows the function still exists. Employers, therefore, would still face the challenge of an unjust dismissal claim in this instance. Remedies would include compensation or reinstatement of employment.

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