Spotlight on Section 64 – Group Terminations

On January 6 and 9 2023, two unrelated decisions were released dealing with s. 64 (Group Terminations) of the BC Employment Standards Act (“ESA”).

The first was a decision from the BC Supreme Court, which addressed an argument that a termination clause in the employment agreement of a non-union employee was unenforceable because it did not refer to the group notice requirements of s. 64.

The second was a decision of the BC Labour Relations Board which addressed the question of when a unionized employee with recall rights is considered terminated for the purposes of s. 64.

In Forbes v Glenmore Printing Ltd., 2023 BCSC 25, Glenmore Printing was successful in defending against an argument that the termination clause contained in Mr. Forbes’ employment agreement was unenforceable because it potentially provided for less notice than Mr. Forbes was entitled to pursuant to the ESA.

Although Mr. Forbes was not part of a group termination, if he had been he would have been entitled to more notice (or pay in lieu thereof) than provided for by his employment agreement, which did not mention or take into consideration potential group notice requirements under s. 64. Mr. Forbes argued that this possible contravention of the minimum requirements of the ESA rendered the termination clause in his agreement void, entitling him to reasonable notice in accordance with the common law.

Justice Ahmad rejected this argument on the basis that the group notice requirements in s. 64 are not intended to serve the same purpose as common law reasonable notice or individual termination notice:

In my view, in order to oust the common law entitlement to reasonable notice, a contractual term must meet the minimum statutory requirements set out in s. 63. The s. 64 notice requirements, being additional statutory rights not found in the common law, do not establish the minimum standard that is required to oust an employee’s common law entitlement to reasonable notice.

The Court noted the absence of any express provision in the agreement purporting to waive the employer’s obligation to comply with s. 64 requirements, and concluded that where an employment agreement is silent with respect to group termination an employer will be bound by the minimum statutory requirements established by s. 64.

This decision will give comfort to employers that they can continue to craft termination provisions with a view to ensuring compliance with the minimum requirements of s. 63 of the ESA, and that as long as they do not purport to waive their obligations to comply with s. 64, a termination clause will not be invalidated for failure to expressly address this potential obligation.

In Canadian Forest Products Ltd., (MacKenzie Wood Products Division) and the Pulp, Paper and Woodworkers of Canada Local No. 18, 2023 BCLRB 5, the Board was asked to resolve conflicting arbitral jurisprudence on the question of when an employee with recall rights is terminated for the purpose of s. 64 of the ESA. The alternatives before the Board were:

a) The Midway Approach: termination occurs when the employee’s recall rights expire, as Arbitrator Pekeles found in Midway Forest Products and United Steelworkers, Local 1-423, Ministry No. A-097/09 (2009) (“Midway”); or

b) The Canfor Approach: when the recall period is exceed, the termination date is deemed to be the first day of layoff, as Arbitrator Glass held in Canadian Forest Products Ltd. (MacKenzie Wood Products Division) v. Public and Private Workers of Canada, Local No. 18 (Employment Standards Act Group Termination Benefits Grievance), [2021] B.C.C.A.A.A. No. 76 (the “Award”).

The importance of the distinction to Canfor, whose employees were subject to staggered rights of recall, was that pursuant to the Canfor Approach more than 50 employees would be considered terminated on the same day; whereas, pursuant to the Midway Approach, this threshold was never reached.

Canfor applied for reconsideration of the Award pursuant to s. 99 of the Labour Relations Code. Applying a standard of correctness to its review of the Award, the Board held that the correct interpretation of s. 64 of the ESA is that termination occurs upon expiry of an employee’s right of recall, consistent with the Midway Approach.

The Board was heavily persuaded by its view of the deeming clause contained at s. 63(5) of the ESA (the section addressing individual notice entitlements), and in particular the amendments to that subsection made in 2002. Section 63(5) expressly states:

For the purpose of determining the termination date under this section, the employment of an employee who is laid off for more than a temporary layoff is deemed to have been terminated at the beginning of the layoff.

Significantly, in 2002 s. 63(5) was amended to add the words “under this section” after the Employment Standards Tribunal interpreted the deeming language at s. 63(5) as applying equally to s. 64. The Board noted the absence of a similar deeming provision in s. 64 and found the 2002 amendments were intended to clarify that the deeming language applied only to s. 63 and not to s. 64. The Board cancelled the Award and dismissed the grievance.

Given that the Board’s decision settles an important question of legislative interpretation, it is highly likely that the Union will apply for reconsideration.

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.