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Exceptions - Act Part 8, Section 65

Last updated on April 1, 2021

Contents:

Summary
Text of Legislation
Policy Interpretation
Related Information

Summary

This section explains situations when section 63 (liability resulting from length of service) and section 64 (group terminations) do not apply. 

Text of Legislation

65. (1) Sections 63 and 64 do not apply to an employee

(a) employed under an arrangement by which

(i) the employer may request the employee to come to work at any time for a temporary period, and

(ii) the employee has the option of accepting or rejecting one or more of the temporary periods.

(b) employed for a definite term,

(c) employed for specific work to be completed in a period of up to 12 months,

(d) employed under an employment contract that is impossible to perform due to an unforeseeable event or circumstance other than receivership, action under section 427 of the Bank Act (Canada) or a proceeding under an insolvency Act,

(e) employed at one or more construction sites by an employer whose principal business is construction, or

(f) who has been offered and has refused reasonable alternative employment by the employer.

(2) If an employee who is employed for a definite term or specific work continues to be employed for at least 3 months after completing the definite term or specific work, the employment is

(a) deemed not to be for a definite term or specific work, and

(b) deemed to have started at the beginning of the definite term or specific work.

(3) Section 63 does not apply to

(a) a teacher employed by a board of school trustees, or

(a.1) a teacher who is employed with or who has a service contract with a francophone education authority as defined in the School Act, or

(b) an employee covered by a collective agreement who

(i) is employed in a seasonal industry in which the practice is to lay off employees every year and to call them back to work,

(ii) was notified on being hired by the employer that the employee might be laid off and called back to work, and

(iii) is laid off or terminated as a result of the normal seasonal reduction, suspension or closure of an operation.

(4) Section 64 does not apply to an employee who

(a) is offered and refuses alternative work or employment made available to the employee through a seniority system,

(b) is laid off or terminated as a result of the normal seasonal reduction, suspension or closure of an operation, or

(c) is laid off and does not return to work within a reasonable time after being requested to do so by the employer.

Policy Interpretation

Certain employees, as defined in this section, are not entitled to compensation for length of service, written notice of termination or group termination pay.

Subsection (1)(a)

This subsection applies to employees who work for temporary periods and who have the right to reject requests to work without penalty. Temporary work is work which ends without an expectation for work beyond that date. Accordingly, there is no need for notice.

There are four conditions that must be established in order to come within this exception:

  • there is an "arrangement" between the employer and the employee;
  • the "arrangement" allows the employer to call the employee to work "at any time" for temporary periods;
  • the employee may accept or reject any temporary period of work; and
  • rejecting the temporary period does not pose a risk to the employee's continued employment.

Example

  • An employee is on a list of employees available for work on a relief basis for a major department store. They are asked to work for 2 weeks during a regular employee’s vacation. The employee refuses the work because of a prior commitment. In the absence of other factors, their name will remain on the list for future call-ins.

Sections 63 and 64 do not apply to employees like this. If the employee rejects an offer to work they remain on the list and will be called again.

Example

  • An employee works on the production line in a manufacturing plant. They work whenever the line is in operation, but the days and hours of work fluctuate based on the availability of raw materials. The employer expects that the employee will work whenever required.

Sections 63 and 64 do apply to employees like this. They are on a fluctuating work schedule because of the nature of the employer's business, but are required to be at work when work is available.


Subsection (1)(b)

Employees described in this section must be aware of the exact date of termination at the time they commence employment. (Refer to Section 65 (2) for the meaning of “definite term.”)

Subsection (1)(c)

It is considered that employees hired for specific work to be completed within 12 months do not anticipate a long-term employment relationship. At the time they are hired they know that their employment will end when the project is complete, or by a specific date.

Employees employed in “seasonal” type work; for example, golf courses, ski hills etc. are entitled to compensation or notice under s.63 unless:

  • they have been given an exact date of termination at the time they commence employment; or
  • the specific work they are performing will be completed within 12 months.

Example

An employer offers an employee a position at his company. The job entails cataloguing books in the company library. The work is estimated to take 5 months, and the job will end when the project is complete. The employee accepts the position and completes the task in 6 months. There is no compensation or notice required to be given to the employee in this case.

However, if the employer decided to terminate the employee after she had completed 3 months of work, but prior to the completion of the specific work, the requirements of section 63 would be applicable.

Subsection (1)(d)

If it is impossible for work to be performed due to a change in circumstances that could not have been anticipated, sections 63 and 64 do not apply. An example of such a change would be the destruction of a work site by fire or flood. Such events are not foreseeable and would exclude affected employees from compensation for length of service and group termination pay.

The onus for proving the elements of this exception have been met lies with the employer who is seeking for it to apply to their workplace (see P.C. Bang Pacific Theatre Ltd. B.C. EST RD115/12). In other words, employers seeking this exception must provide the Director with information to demonstrate the event was unforeseeable and that the employees' contract of employment is impossible to perform.

If the exception does not apply, the employer is responsible to pay compensation for length of service and/or group termination pay to its terminated employees as required by the Act.

The following are the most common situations where the Director may be asked to determine whether the exception applies:

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Business failures or economic slowdowns

A business failure caused by cancellation of orders, insolvency, landlord eviction or loss of key personnel could result in an employer not being able to provide continued employment to employees in a workplace. These events are a part of the normal business cycle and cannot be construed as "unforeseen".

A business failure for these reasons would not discharge an employer's obligation to provide individual compensation for length of service or group termination under sections 63 and 64 of the Act.

 

Employee illness or disability

Temporary illness, injury or disability is not considered to be an unforeseeable event or circumstance that would discharge an employer’s obligations under sections 63 and 64 of the Act.

However, if medical evidence shows that an employee is permanently disabled as a result of illness or injury and will never be able to return to the workplace, this section may apply. The employer should be aware of the duty to accommodate under the Human Rights Code.

 

COVID-19 terminations or permanent layoffs

If a business closure or staffing reduction is directly related to COVID-19 and there is no way for employees to perform their work in a different way (for example, working from home) the exception may apply in terminations resulting from the COVID-19 emergency.

This exception is not automatic for all layoffs that have occurred during the time of the COVID-19 emergency. If an employer terminates an employee for reasons that are not directly related to COVID-19 or if the employee's work could still be done (perhaps in a different way, such as working from home or resuming operations with additional personal protective equipment (PPE)) the exception would not apply.

Was COVID-19 and its economic consequences an unforeseeable event?

While each case must be decided on its own merits, the COVID-19 emergency has had an unprecedented impact on B.C.’s economy and layoffs that directly resulted from this emergency, especially in its first few months, will likely meet the unforeseeable event requirement for this exception.

This means that if an employer had employees prior to the emergency and these employees have been terminated or permanently laid off in the early months of the emergency, the decision on whether the exception applies will turn on whether or not it was impossible for the employees’ contract of employment to be performed.

What constitutes “impossible to perform” in the COVID-19 context?

For the exemption to apply in the COVID-19 context, there must be clear evidence that it was not possible for the employee(s) to continue working during the pandemic. Evidence of significant business losses, or reduced profits resulting from the economic impacts of the pandemic will not be enough to demonstrate impossibility (see Labyrinth Lumber Ltd. (Re), B.C. EST D407/00).

The Director will consider each case on its own merits. The following are the most likely scenarios where impossibility may be established in the COVID-19 context:
 

  • The employer establishes it is unable to open as a result of public health orders or directive for a period of time longer than a temporary layoff is permitted

    For example, concert venues have been prohibited from operating for longer than the maximum time period for temporary layoffs provided by the Act and Regulation.
     
  • The employer establishes it is unable to adapt to public health guidelines and directives for its employees by using PPE or other safety measures

    For example, a business that provides a personal service that cannot be performed safely, even with the appropriate PPE, does not recall employees to perform this service to comply with WorkSafeBC or public health guidelines for occupational health and safety and physical distancing.
     
  • The employer establishes that it was viable and planned to continue operating prior to the pandemic, but was forced to permanently closed its doors as a result of COVID-19

    For example, a business had a lease for its operations and a business plan to operate continuously through 2020, but was forced to cancel its lease, terminate its staff, and wind up its operations directly in response to the COVID-19 emergency.

 

Subsection (1)(e)

Two requirements must be met before an employee is excluded under this section.

  • The employee must have been employed at one or more construction sites; and
  • The employer’s principal business must be construction.

Under section 1 of the Act “construction” means “the construction, renovation, repair or demolition of property or the alteration or improvement of land”.

If an employee usually works on the employer’s premises (for example, in the employer’s shop) and rarely goes to construction sites this subsection does not apply. If the employer’s principal business is not construction, this subsection does not apply.

Examples

  • A cabinet maker is employed to build cabinets and install them. They spend 75% of their time in the employer’s shop and 25% of their time at construction sites. This subsection does not apply.
  • A caretaker, whose duties include routine repairs, is engaged in maintenance. They do not work on construction sites, and their employer’s principal business is not construction. This subsection does not apply.
  • A roofer is employed putting roofs on new houses by a company whose business is comprised of 70% new construction and 30% re-roofing and repairs. This subsection applies.

Subsection (1)(f)

Employees who are offered reasonable alternative employment and refuse the offer are not entitled to compensation for length of service.

The test to determine if an offer is reasonable is the “reasonable person test”.

“The test of reasonableness is an objective test that is what a reasonably officious bystander would consider as reasonable, not what the employee believes is reasonable.”
Walther Hopp, B.C. EST #D433/97;

Businesses associated under s.95 of the Act are considered as one employer for the purposes of this section.

In determining what is reasonable alternative employment, the director may consider the following:

  • Is there a standard practice in the business or industry in which the employee is working?

    If the norm is that a transfer to another city can be expected to take place every three to four years, an employer’s request that an employee transfer may be reasonable, providing the job is the same or similar. Financial differences may be a factor to consider.
     
  • What was the employee’s expectation when hired?

    If part of a hiring agreement was that the employee would transfer, a request by the employer to do so would be reasonable.
     
  • Can the employee perform the job with current skills?

    Even if training is to be provided, the offer would not be reasonable if it is for a different kind of work and the employee does not wish to perform that kind of work or does not have the current skills to perform the job.
     
  • Will the wages be equal to the amount the employee is currently earning?
  • Is the status of the work at least equal to the work currently being performed?

    If the work represents a drop in status in the eyes of other employees or the public, even if the wages will be the same or better, the offer may not be reasonable.
     
  • Will there be different working hours or a different workplace?

    If so, are the revised hours or commuting distance reasonable, bearing in mind the employee’s personal circumstances? A job offer at a different location to an employee who has a company car might be reasonable, whereas the same offer to an employee without a car might not be reasonable. Similarly, a job offer to an employee whose babysitting arrangements or spouse’s employment would be seriously disrupted might not be reasonable, whereas the same offer to an employee without dependents might be reasonable.

Subsection (2)

This section establishes that if an employee commences work for a definite term or to perform specific work to be completed within a 12 month period (as described in s.65(1)(a) and (b) above), and the employee continues to be employed for at least 3 months after the definite term or after completing the specific work, they are no longer exempt from ss.63 and 64 of the Act. This section also establishes that for the purposes of determining entitlements to compensation for length of service and group termination, the starting date is considered to be at the beginning of the definite term or specific work.

Example

Nikita is hired on June 1 for a six-month term to implement a new computer system by December 31. The project is not completed as planned and they continue to work until April 15 of the following year. Nikita continued working for at least 3 months after the definite term, and therefore, is entitled to one week’s written notice or compensation for length of service under s.63 of the Act.

Subsection (3)

Section 63 (individual compensation for length of service) does not apply to individuals described in this subsection.

Subsection (4)

Exceptions to s.64, group termination requirements, are provided under the following circumstances:

  • employees who refuse work available to them through seniority provisions;
  • employees working in a seasonal business; and
  • employees who are laid off pursuant to a term of their employment agreement and do not return to work within a reasonable time when recalled by the employer.

Employees covered by a collective agreement

Where there is a collective agreement, disputes respecting the application, interpretation or operation of s.65 must be resolved through the grievance procedure, not through the enforcement provisions of the Act.

Related Information

Employment Standards Tribunal Decisions

Walther Hopp, B.C. EST #D433/97;
Covert Farms Ltd., B.C. EST #D077/99;
Nanaimo Seniors' Village, B.C. EST #D010/07
Top Win Cafe Ltd., B.C. EST #D629/01

Related sections of the Act or Regulation

ESA

Court Case

Honeywell Limited v. the Director of Employment Standards, 1997 CanLII 4191 (BCSC)