How does severance pay work if my temporary layoff due to shortage of work becomes a permanent lay off?
I have been employed at the same company for 20 years.
First, when it comes to a temporary lay off, an employer can only do this if one of the following apply: (a) it’s allowed in your employment contract, (b) you agree to it, or (c) you work in a specific industry (for example, forestry or construction) that allows for these types of layoffs.
Something like the coronavirus pandemic, on its own, is not a valid legal reason for an employer to do a temporary layoff that you don't agree to. If they did this, your lay off would be considered a permanent lay off (even if they call it temporary), and you’d be entitled to severance pay immediately.
If it is a valid temporary layoff, your employer has up to 13 weeks to hire you back. If they don't, then you would be entitled to severance pay.
The amount of severance
The amount of severance pay you would be owed depends on many factors. Under the law in BC, you would be entitled to at least eight weeks of severance pay based on your tenure at the company. But you may be entitled to more. Check your employment contract to see if it provides for more. If your contract doesn’t say anything about notice, the law implies a term that your employer give you reasonable notice of dismissal. How much notice is reasonable depends on factors such as how long you’ve been in the job, your age, and your role. See our information on reasonable notice.
Steps to consider taking
Once you calculate what you’re owed, consider writing a letter to your employer setting out your rights and expectations. You may be able to resolve things amicably.
If not, you have options. You can make an employment standards complaint with the goal of compelling your employer to pay you the minimum required under the law (eight weeks in your case). Or you can bring a wrongful dismissal action to seek reasonable notice. Here, it’s a good idea to seek legal advice. You can check out these options for free or low-cost legal help.