Interpretation Guidelines Manual British Columbia Employment Standards Act and Regulations
EMPLOYMENT STANDARDS ACT - PART 8 - TERMINATION OF EMPLOYMENT
ESA Section 66 – Director may determine employment has been terminated
This section explains the director’s authority in determining when employment has been terminated due to a substantial alteration of employment conditions. This concept is referred to in common law as “constructive dismissal”.
66. If a condition of employment is substantially altered, the director may determine that the employment of an employee has been terminated.
Under s.66 if a condition of employment is substantially altered, the employee’s employment may be deemed by the Director of Employment Standards to be terminated.
In order to find a contravention of this section of the Act, it must be shown that the employer unilaterally made a substantial change in the nature of the employment duties or in compensation. This change, in effect, creates a new employment relationship with substantially different terms. In this situation, the Director may consider that there has been a termination of employment under s.66 of the Act.
A “week of layoff” as defined in s.62 of the Act is “a week in which an employee earns less than 50% of regular weekly earnings averaged over the previous 8 weeks”.
Unless an employment contract contains terms that provide for temporary layoff, a
reduction of an employee’s hours which results in earnings of less than 50% of regular weekly earnings may be deemed to be a substantial alteration of a condition of employment.
Factors to consider when applying s.66
In order for there to be a termination for purposes of this section, it must be proven that the employer has made a fundamental change to an employee’s terms and conditions of employment without providing the employee with reasonable notice of the change. It must be shown that the change made by the employer places the employee in a position of having to accept as a condition of continued employment, changes to wages, working conditions or benefits which an objective, reasonable person would find to be unfair, unreasonable and unacceptable.
It is not necessary to show that the employer’s intent was to encourage the employee to leave their employment.
If a substantial adverse change is made unilaterally by an employer and as a result of this change the employee makes the decision to quit, either immediately or within a reasonable period, it could still be considered that the ending of the employment relationship was the result of the employer’s actions and the employee would be considered to have been terminated for purposes of this section. Some of the factors to consider include:
- reduction of wage rate;
- change in geographic location;
- limiting of authority;
- change in responsibilities, imposed solely by the employer.
If the director determines that the employee is terminated under this section of the Act, s.63 and s.65 would apply.
Employment Standards Tribunal Decisions
Ernest J. Helliker, BC EST RD#338/97
Isle Three Holdings Ltd., BC EST #D084/08
Related sections of the Act or Regulation
- s.1, Definition, “conditions of employment”
- s.62, Definition, “week of layoff”
- s.63, Liability resulting from length of service
- s.67, Rules about notice