Owner's choice to stay closed when pandemic restrictions eased didn't make employment impossible
An employer’s decision to remain closed when its temporary layoffs during the pandemic became permanent did not mean it was impossible to reopen and exempt it from paying termination pay, the BC Employment Standards Tribunal has ruled.
Shady Tree Neighbourhood Pub is a pub in Squamish, B.C. On March 18, 2020, the owner closed the pub and temporarily laid off its employees because of the provincial government’s declaration of a state of emergency due to the COVID-19 pandemic. It remained closed due to a public health order restricting the ability of food and drink establishments to operate.
The temporary layoff lasted almost 24 weeks until Aug. 31 – the limit for temporary layoffs allowed in the BC Employment Standards Act (ESA), which had been extended from the regular limit of 13 weeks in response to the pandemic. However, the pub remained closed and the employee layoffs became permanent.
The pub did not pay the employees termination pay for length of service, as is required by the ESA. The owner told them that the pub didn’t owe them anything because the ESA had an exception for termination pay for employees who are “employed under an employment contract that is impossible to perform due to an unforeseeable event or circumstance.”
Seven employees filed employment standards complaints seeking termination pay from the pub.
Difficult to reopen with restrictions
Although government restrictions allowed food and drink establishments to operate with takeout or delivery service only, the owner said that the pub could not remain open without patrons inside the establishment. He also claimed that, when inside dining was permitted in May 2020, it didn’t make sense to reopen and bring back staff because the uncertainty of the pandemic and safety risk to staff and patrons was still a concern – the kitchen and office were too small for staff to work at a safe distance at necessary staffing levels.
In June 2022, an adjudicator found that the exemption didn’t apply and ordered the pub to pay the employees a total of nearly $10,000 in wages and interest, along with an administrative penalty for violating the ESA.
The adjudicator found that, while the pandemic constituted an “unforeseeable event” under the ESA, the pub’s owner did not prove that it rendered the employees’ continued employment impossible within the meaning of the ESA’s exception. This was because businesses similar to the pub were allowed to reopen in May 2020 at reduced capacity and with restrictions in place, and the owner’s decision to not reopen was a choice. It was possible for the pub to reopen under the safety protocols and capacity requirements required by public health orders, said the adjudicator.
The adjudicator’s decision was also based on evidence from the pub’s general manager, who stated that the pub’s kitchen was a standard size and similar to restaurants that had re-opened in May 2020. The general manager also said that it wasn’t impossible for employees to work two metres apart and wear masks, and the parking lot could have been used for an outside eating area. In addition, the owner was not responsive to his inquiries as to when or if the pub would reopen, the general manager said.
Couldn’t operate safely: owner
The pub’s owner appealed to the BC Employment Standards Tribunal. He argued that the adjudicator failed to observe the principles of natural justice by failing to consider relevant evidence that proved it was impossible to operate the pub safely during the period of layoff and at the time of termination.
The owner also argued that the general manager should not have been considered as a witness because they were “very partial in favour” of the employees.
In addition, new evidence became available that should allow the tribunal to accept the appeal, the owner said, noting that the pub reopened in July 2022 and some former employees were rehired, establishing that he had always intended to reopen when it was safe to do so, contrary to allegations that he had no intention of doing so.
The tribunal agreed that the key reason that the owner kept the pub closed was “fear and concern for the health and safety of employees and patrons,” which was important to the pub’s health and safety responsibilities as an employer. However, it dismissed the appeal.
Adjudicator’s discretion
The tribunal found that the choice to consider the general manager’s evidence was an exercise of discretion as part of the adjudication and investigation. The evidence was relevant to the employees’ complaints and the issue of whether the ESA exception applied and therefore was not a breach of natural justice, the tribunal said.
The tribunal also found that an ESA adjudicator need not list all of the evidence considered in the decision or explain every finding of fact, so the fact that the allegations that the owner had no intention of reopening weren’t addressed didn’t mean they weren’t factored into the decision or that there was bias. The decision was sufficiently detailed to support the conclusions and the threshold was high to prove that a decision-maker was biased, said the tribunal.
As for the new evidence of the pub’s eventual reopening, the tribunal found that this would not have led the adjudicator to reach a different conclusion. The main question was whether it was impossible to reopen the pub at the end of August 2020, not whether the owner wanted to do so. The new evidence did not “shed new light on this question” and would not have changed the outcome of the complaints, said the tribunal in dismissing the appeal.
See 516400 B.C. Ltd. (Re), 2022 BCEST 73.