Canada Work-Sharing Program and Temporary Layoffs under the BC Employment Standards Act
April 15, 2025
Article by:
Taylor Topliss
Canadian businesses subject to the recent U.S. tariffs are facing significant turmoil including potential loss of business and a corresponding reduction in their workforce.
In response to the tariffs, the Canadian federal government has introduced a Special Measures Work-Sharing Program to help prevent employee layoffs or dismissals.
The Work-Sharing Program provides income support to employees suffering from reduced hours of work due to economic conditions caused by tariffs.
However, BC employers considering the Work-Sharing Program must also consider the temporary layoff provisions under the British Columbia Employment Standards Act (the “BC ESA”), and constructive dismissal risks.
In this article, we briefly outline the Work-Sharing Program, the BC ESA temporary layoff provisions, and constructive dismissal issues, and provide practical examples of how BC employers can navigate each.
Work-Sharing Program – Tariffs Special Measures
Eligibility requirements for the Tariffs Special Measures Work-Sharing Program are posted on the federal government website. For the purposes of this article, we note the following:
- Employers must be operating in Canada for at least 1 year.
- Employees must:
- experience a reduction in normal weekly earnings;
- be eligible for EI benefits; and
- agree to a reduced schedule of work and sharing of available work.
- Employees (and their union, if applicable) and the employer must agree to the Work-Sharing Program.
- A Work-Sharing Program agreement must be at least 6 weeks and may be extended up to 76 weeks.
BC Employment Standards Act – Temporary Layoff Provisions
Under the BC ESA, employees who earn less than 50% of their regular weekly wages are deemed to be on temporary layoff.
Employees must agree to a temporary layoff in advance, which normally forms part of a written employment contract, or it may be implied as normal and expected in a particular industry.
Temporary layoffs can only last 13 weeks in a 20-week period, unless a variance to extend that period is granted by the BC provincial government. However, to obtain a variance, the majority of employees must agree to the extension of the temporary layoff.
If the temporary layoff period is exceeded, employment is treated as terminated under the BC ESA, resulting in termination pay obligations. If the workplace is unionized, employees may be entitled to severance and the right of recall under their collective agreement.
Interplay between BC ESA and Work-Sharing Program
Work-Sharing Program agreements between a BC employer and its employees may not align with the BC ESA temporary layoff requirements.
For example, the Work-Sharing Program can be extended up to 76 weeks. However, if the employees are earning less than 50% of their pay, the BC ESA layoff provisions are engaged and only permit up to 13 weeks of temporary layoff (within a 20-week period) before a deemed dismissal (subject to the collective agreement terms, if unionized), unless a variance is obtained from the BC Government.
In short, BC employers must be aware that compliance with the Work-Sharing Program does not necessarily mean compliance with the BC ESA or termination pay obligations.
To help avoid deemed terminations under the BC ESA, employers can maintain at least 50% regular weekly wages in any Work-Sharing Program arrangement. Alternatively, employers can ensure that any reduction of regular weekly wages below 50% does not exceed 13 weeks within a 20-week period.
Constructive Dismissal
Generally, in the non-unionized workplace, a unilateral reduction of work hours is considered constructive dismissal, unless there is a written employment contract allowing for reduction in hours. With or without a written contract, employees may decide to commence legal action for termination payments.
To help mitigate constructive dismissal claims by pre-existing employees, employers should obtain written consent from employees prior to implementing any reduction of hours. In addition, employers should consider providing working notice of the reduced hours equivalent to the termination notice periods in BC ESA and any written employment contract, where possible.
For new employees, employers should consider temporary layoff and flexible hours of work provisions in employment contracts.
Takeaways for Employers
The BC ESA and the Work-Sharing Program are two separate requirements. Implementing a Work-Sharing Program may breach temporary layoff and termination requirements under the BC ESA and employment contracts. Employers should consult legal counsel prior to implementing any reduction of hours to help ensure compliance with BC ESA and other labour and employment law obligations.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.
April 15, 2025
Canadian businesses subject to the recent U.S. tariffs are facing significant turmoil including potential loss of business and a corresponding reduction in their workforce.
In response to the tariffs, the Canadian federal government has introduced a Special Measures Work-Sharing Program to help prevent employee layoffs or dismissals.
The Work-Sharing Program provides income support to employees suffering from reduced hours of work due to economic conditions caused by tariffs.
However, BC employers considering the Work-Sharing Program must also consider the temporary layoff provisions under the British Columbia Employment Standards Act (the “BC ESA”), and constructive dismissal risks.
In this article, we briefly outline the Work-Sharing Program, the BC ESA temporary layoff provisions, and constructive dismissal issues, and provide practical examples of how BC employers can navigate each.
Work-Sharing Program – Tariffs Special Measures
Eligibility requirements for the Tariffs Special Measures Work-Sharing Program are posted on the federal government website. For the purposes of this article, we note the following:
- Employers must be operating in Canada for at least 1 year.
- Employees must:
- experience a reduction in normal weekly earnings;
- be eligible for EI benefits; and
- agree to a reduced schedule of work and sharing of available work.
- Employees (and their union, if applicable) and the employer must agree to the Work-Sharing Program.
- A Work-Sharing Program agreement must be at least 6 weeks and may be extended up to 76 weeks.
BC Employment Standards Act – Temporary Layoff Provisions
Under the BC ESA, employees who earn less than 50% of their regular weekly wages are deemed to be on temporary layoff.
Employees must agree to a temporary layoff in advance, which normally forms part of a written employment contract, or it may be implied as normal and expected in a particular industry.
Temporary layoffs can only last 13 weeks in a 20-week period, unless a variance to extend that period is granted by the BC provincial government. However, to obtain a variance, the majority of employees must agree to the extension of the temporary layoff.
If the temporary layoff period is exceeded, employment is treated as terminated under the BC ESA, resulting in termination pay obligations. If the workplace is unionized, employees may be entitled to severance and the right of recall under their collective agreement.
Interplay between BC ESA and Work-Sharing Program
Work-Sharing Program agreements between a BC employer and its employees may not align with the BC ESA temporary layoff requirements.
For example, the Work-Sharing Program can be extended up to 76 weeks. However, if the employees are earning less than 50% of their pay, the BC ESA layoff provisions are engaged and only permit up to 13 weeks of temporary layoff (within a 20-week period) before a deemed dismissal (subject to the collective agreement terms, if unionized), unless a variance is obtained from the BC Government.
In short, BC employers must be aware that compliance with the Work-Sharing Program does not necessarily mean compliance with the BC ESA or termination pay obligations.
To help avoid deemed terminations under the BC ESA, employers can maintain at least 50% regular weekly wages in any Work-Sharing Program arrangement. Alternatively, employers can ensure that any reduction of regular weekly wages below 50% does not exceed 13 weeks within a 20-week period.
Constructive Dismissal
Generally, in the non-unionized workplace, a unilateral reduction of work hours is considered constructive dismissal, unless there is a written employment contract allowing for reduction in hours. With or without a written contract, employees may decide to commence legal action for termination payments.
To help mitigate constructive dismissal claims by pre-existing employees, employers should obtain written consent from employees prior to implementing any reduction of hours. In addition, employers should consider providing working notice of the reduced hours equivalent to the termination notice periods in BC ESA and any written employment contract, where possible.
For new employees, employers should consider temporary layoff and flexible hours of work provisions in employment contracts.
Takeaways for Employers
The BC ESA and the Work-Sharing Program are two separate requirements. Implementing a Work-Sharing Program may breach temporary layoff and termination requirements under the BC ESA and employment contracts. Employers should consult legal counsel prior to implementing any reduction of hours to help ensure compliance with BC ESA and other labour and employment law obligations.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.