My manager recently asked everyone on our team if we’re interested in taking unpaid leave. Is this legal? If I take a voluntary leave and then I get terminated, am I still entitled to the same amount of severance?
The first answer
Nadia Halum Arauz, associate, Whitten & Lublin Employment Lawyers, Toronto
The employer is likely seeking volunteers who would prefer to stay home and receive the Canada Emergency Response Benefit (CERB) before implementing more severe measures such as reductions to compensation, layoffs or terminations. I see no issue with the employer’s approach in seeking volunteers first.
If the employee does choose to take a voluntary leave and is ultimately terminated, the period of time that the employee was on leave should be counted toward the employee’s service when determining how much severance they are entitled to. In other words, the leave should not reduce the amount of severance to which the employee is entitled.
However, the employee should be aware that if there is a period of time during which they are receiving employment insurance or CERB benefits, and this period of time overlaps with a period during which they receive severance pay from the employer, they will likely have to repay the EI or CERB benefits received during the overlap.
The second answer
Eric Lam, lawyer, Taylor Janis Workplace Law, Calgary
An employer may lay off employees temporarily, so long as it follows strict requirements under the relevant provincial employment standards legislation for notice of layoff and recall. The standards vary by province as to what constitutes an appropriate length of layoff before the layoff becomes a termination of employment.
However, you are not required to voluntarily accept an unpaid leave and an employer should not change the fundamental terms of their employee’s contractual relationship without consent. If an employer makes changes regardless or fails to follow provincial employment standards legislation, this would constitute a constructive dismissal.
A constructive dismissal occurs when, without providing a formal termination, an employer unilaterally changes the fundamental terms of the employment relationship such that a reasonable employee in similar circumstances would understand their employment contract to be ended. In such instances, the employee is entitled to resign and seek damages against their employer as if they had been formally terminated.
The damages associated with constructive dismissal are the same as those for employees who have been terminated. A court would review the employee's age, length of service, role and the availability of other work to calculate what amount of pay in lieu of reasonable notice would be appropriate in the circumstances.
If you choose to take a voluntary leave and are terminated upon recall, you would be entitled to the same termination pay under provincial employment standards legislation and reasonable pay in lieu of notice as severance as if a leave had not been taken.
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