Indigenous Business Group – Employment Commentary


Thus far in March the World Health Organization has declared that COVID-19 is a pandemic, Prime Minister Trudeau has announced a suite of federal responses related to the spread of the virus, and British Columbia has declared a state of emergency. In response to the rapidly increasing impacts of COVID-19, individuals, businesses, governments and Indigenous Nations have all been scrambling to adapt.

With the slow-down or complete closure, as the case may be, of many businesses, employers are facing many difficult employment-related questions. Indigenous Nations and businesses are no different. Below we provide guidance with respect to some of the most asked employment questions, as they may apply to Indigenous leadership.

1. Governing legislation: Canada Labour Code or BC Employment Standards Act?

It is critically important to be clear on whether employees are provincially or federally regulated because this will impact employment standards, occupational health and safety requirements, human rights, and other rights and obligations of employers and employees. The majority of employees in BC will fall under the provincial Employment Standards Act. However, those employees who are employed directly by an Indigenous Nation may fall under the federal Canada Labour Code.

The determination of whether an employee falls under provincial or federal jurisdiction is highly fact-specific and should be made on a case-by-case basis. The implications of incorrectly determining which jurisdiction an employee falls under may result in legal liability for Indigenous employers.

Employees presumptively fall under provincial jurisdiction. The provincial presumption will be set aside where the employment is related to a ”federal undertaking”, according to the following two-step inquiry:

  • The first step is to look at the nature, operations and habitual activities of the employer to see if it is fundamentally a federal undertaking, which should properly be subject to the Canada Labour Code (the “functional test”);
  • Where the functional test doesn’t settle the matter, the inquiry proceeds to a review of whether provincial regulation of the employer would impair a core federal power.

Certainly “Indians and lands reserved for Indians” as described in section 91(24) of the Constitution Act, 1867 as an exclusive area of federal jurisdiction would be such a federal matter for employment law purposes. Thus, the Canada Labour Code would apply to First Nations governance and administration or reserve lands focused enterprises or work.

2. Employer and Employee Rights and Obligations

  1. Legal Obligations

Both employers and employees have an obligation to ensure the health and safety of their workplace under occupational health and safety legislation. These obligations include taking reasonable steps to protect employees from a contagion such as COVID-19.

Employers also have an obligation to ensure that personal information of employees, including health information, is kept confidential in the workplace.

  1. Right to Refuse Work & Right to Prohibit Employees

All employees—whether provincially or federally regulated—have the right to refuse unsafe work under applicable occupation health and safety legislation. If an employee refuses to work, employers should handle the situation on a case-by-case basis and consider the situation on its merits. Employers are advised to err on the side of caution and consider things such as whether an employee can travel to and from work, and perform their job, all while maintaining a safe distance from others.

Especially in light of the provincially declared state of emergency, public health recommendations and directives for self-isolation and social distancing, and new legal restrictions on some business operations, it may be reasonable to instruct an employee to stay away from the workplace if the employer is concerned about the employee exposing others to infection or vice versa. However, employers should be mindful not to invite an allegation of constructive dismissal or an employment-related complaint by unreasonably refusing employees access.

  1. Discrimination & Harassment

Under human rights law in BC and throughout Canada, employees are protected from discrimination based on prohibited grounds. Employers should take steps to guarantee that no employee is subject to discrimination as a result of a misconception that they are the carrier of a communicable disease. Any employee who has been wrongly singled out in this manner of stereotyping may have a claim for prohibited discrimination in employment.

3. Leaves, Layoffs and Terminations

  1. Leave

British Columbia

Many Canadian provinces have been in the process of amending employment standards legislation to build upon job-protected leaves. In this regard, BC has now amended the Employment Standards Act to create a new class of job-protected leave designed to respond to employment-related issues resulting from COVID-19. Bill 16 sets out that employees who are unable to work due to COVID-19 will be entitled to unpaid leave and will have the assurance that their job, or a comparable position, will still be available once they are able to return to work.

In order for an employee to be eligible for the leave, one of the following conditions must be met:

  • The employee has been diagnosed with COVID-19 and is acting in accordance with the instructions of a medical health officer or other medical professional;
  • The employee is in quarantine or self-isolation in accordance with an order or guidelines from the government;
  • The employer has directed the employee not to work, due to the employer’s concern about the employee’s exposure to others;
  • The employee is providing care to a dependent;
  • The employee is stranded outside of British Columbia; or
  • Any other prescribed situation exists relating to the employee.

The leave is retroactive to January 27, 2020 in order to capture those employees who already faced one of the situations above prior to Bill 16 coming into force. The leave is valid for as long as the situation entitling the employee to the leave persists. Employers are entitled to ask for reasonably sufficient proof from an employee that the employee qualifies for the leave. It is likely not permissible at this time for employers to require a note from a doctor, due to social-distancing and self-isolation requirements currently in place.

While the COVID-19-related job-protected leave is temporary, the province has also introduced a permanent measure of 3 days of job-protected leave for employees unable to work due to illness or injury.

In any case, employers are not required to pay employees for sick leave or other leaves of absence, whether related to COVID-19 or not.


Federally regulated employees with over 90 days of employment are generally entitled to up to 3 days of paid sick leave or as otherwise may be provided for in their employment contract or in a workplace policy. These entitlements are not specific to COVID-19.

Federally regulated employees are newly entitled to up to 16 weeks of unpaid, job-protected leave, if they are unable to work as a result of COVID-19.  The circumstances under which an employee is entitled to this leave are similar to those entitling employees to the equivalent provincial COVID-19 related leave.  Such circumstances must be as a result of COVID-19, in each case, and include when the employee is in quarantine or has been asked to isolate; must care for a family member or is otherwise unable to work.

In order to take such leave, employees must, as soon as possible, in writing, give their employer notice of the reason for the leave, the intended length of the leave and any changes to the length of the leave.

Canada Emergency Response Benefit

While on leave from work, both federally and provincially regulated employees may have access to the new Canada Emergency Response Benefit (CERB).  The CERB will provide those eligible with $2,000 per month for 4 months, as a taxable benefit.  It is available to workers who still have a job but are not getting paid because of COVID-19.  It is anticipated that individuals will be able to apply for the CERB in early April.

  1. Layoffs

British Columbia

In BC, for an employer to be able to temporarily layoff an employee, one of the following conditions must be met:

  • The right for the employer to layoff the employee is expressly set out in the employment contract;
  • Temporary layoffs are an industry custom. This is common in seasonal or other employment which regularly ceases for sustained periods of time; or
  • The employer offers a temporary layoff and the employee agrees.

Where one of the conditions above has been met, the maximum length that a layoff may last is 13 weeks within a 20 week period. If the 13 week period is exceeded, the employee is automatically deemed to have been terminated effective the first day of the layoff and would be eligible to receive the employee’s termination entitlements, including notice or pay in lieu of notice of termination.

There is no statutory requirement to provide an employee with notice of a layoff, or pay the employee during their time away from work due to layoff.

Where the conditions above for layoff have not been met, an employer may still choose to layoff an employee.  In such a case, an employee may claim that it was never a term of their employment contract that they could be sent home without pay, in which case the employee may been constructively dismissed.  In other words, the employee can waive their right to return to work and demand to be paid out immediately in lieu of notice of termination.  However, employees have to show efforts to mitigate their damages before walking away from a job, which, in our view, will be difficult to do in this economic climate.  Given the uncertainty of the future job market, we anticipate most employees would accept a layoff.

The comments in the preceding paragraph are equally applicable with respect to the COVID-19 related job-protected leaves (both provincial and federal).


Under the Canada Labour Code, a layoff is considered temporary, i.e. not a termination, when, among other things:

  • the term of the layoff is 3 months or less;
  • the term of the lay-off is more than 3 months and the employer:
    • notifies the employee in writing at or before the time of the lay-off that the employee will be recalled to work on a fixed date or within a fixed period neither of which will be more than six months from the date of the lay-off, and
    • recalls the employee to employment in accordance with the previous subparagraph;
  • the term of the lay-off is more than 3 months and:
    • the employee continues during the term of the lay-off to receive payments from their employer in an amount agreed on by the employee and their employer,
    • the employer continues to make payments for the benefit of the employee to a registered pension plan or under a group or employee insurance plan,
    • the employee receives supplementary unemployment benefits, or
    • the employee would be entitled to supplementary unemployment benefits but is disqualified from receiving them pursuant to the Employment Insurance Act.


Any employee who is entitled to job-protected leave should not be laid off.

  1. Terminations

Where an employee is not entitled to job-protected leave, an employer may decide to simply terminate the employee by providing the required notice or pay in lieu of notice.

Note that there are additional obligations on employers in the case of group terminations, meaning the termination of employment of 50 or more employees.

4. Conclusion

Employers should address employment issues related to COVID-19 on case-by-case basis. The Clark Wilson Employment and Labour Law Group and Indigenous Law Group are available to discuss any of these issues and questions that may arise.

For more legal analysis of how COVID may affect your business, or personal affairs, visit Clark Wilson’s COVID-19 Resource and FAQ pages