THE QUESTION
The company I work for is temporarily closing for six weeks. Is it possible for me to receive employment insurance benefits during the closing? If I don’t have enough hours accumulated to qualify for EI, what would my options be?
THE FIRST ANSWER
Melissa Rico and Kathleen O’Brien, Carbert Waite LLP, Calgary
The situation described is that of a temporary layoff. As a starting point, your employer is obligated to follow the requirements regarding temporary layoffs set out in the applicable employment legislation. In Alberta, the Employment Standards Code sets out the requirements for a valid temporary layoff, including providing you with advance written notice.
Presuming your company does what is necessary for a valid temporary layoff, during the six-week closure, you may be eligible to collect EI benefits if you meet certain requirements. These include having worked the required number of insurable employment hours in the 52 weeks leading up to your claim. This is based on the unemployment rate in your area and ranges between 420 and 700 hours. You should be aware that if you receive EI benefits while on a temporary layoff, you must continue to meet all EI requirements, including that you are available for, able to and looking for work.
If you don’t have the number of hours to qualify for EI benefits, you should ask your employer if they have registered a supplemental unemployment benefit (SUB) plan. These plans are registered by employers and may include coverage for employees who do not have the required number of hours to receive EI benefits. If your employer does not have a SUB plan, your options are limited. A temporary layoff maintains your relationship with your employer. You may wish to speak with them about seeking temporary work during the layoff period.
THE SECOND ANSWER
Kumail Karimjee, lawyer, Karimjee Law, Toronto
Yes. You can receive EI if you are laid off from work and your earnings are interrupted because of the temporary closing of your workplace. You do not qualify for EI if you receive pay during the closure. Your employer should file a record of employment (ROE) showing your insurable hours, the last day you were paid and the reason for issuing the ROE. A “temporary shutdown of operations” fits within the “shortage of work” code on an ROE and provides for entitlement to benefits. There is a one-week waiting period, so you would not receive EI benefits for the first week you are off without pay. Generally, you need to have sufficient insurable hours to qualify for EI.
In terms of other options, the temporary layoff may constitute a breach of your employment contract and/or constructive dismissal. Some employment contracts allow for temporary layoffs because of closures or other reasons. However, if your contract of employment does not provide for temporary layoffs without compensation, a layoff is usually considered a breach of contract and can also result in a constructive dismissal. As such, you may have a claim against your employer for your lost income during the temporary closure or for severance payments. You should discuss this possibility with an employment lawyer.
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