Vancouver Hotel Cites Pandemic to Deny Workers Severance Pay

At least one major B.C. employer is claiming the pandemic means it doesn’t have to provide severance pay to terminated employees.

The Four Points by Sheraton Vancouver Airport hotel has sent employees letters saying bookings are down dramatically so it was firing them and would not be giving them severance or termination pay.

If the hotel’s interpretation of the law is allowed to stand, more than 300,000 people laid off in B.C. during the pandemic who have not yet returned to work would be in danger of being denied severance payments if the layoffs become permanent.

At least some of the people the Sheraton terminated have complained to the province’s Employment Standards Branch, and a Labour Ministry statement said that’s the proper place for the matter to be resolved.

Hotel general manager Vijaay Kanna wrote employees in May and said the drop in business had made the terminations necessary. “Given our hotel relies heavily on international travel and tours for room bookings, it has unfortunately become clear that our business will not rebound in the foreseeable future,” he said.

“While the government wage subsidy allowed us to continue to provide you some work in hopes of the situation turning around, there is no longer a reasonable prospect of us continuing to need your services.”

Under B.C.’s Employment Standards Act, an employee who isn’t being recalled from a layoff is entitled to severance pay or working notice. The longer a person has been working for the employer, the more notice or pay they are entitled to, with a maximum of eight weeks for people who have worked eight years or more.

But Kanna’s letter claimed the act doesn’t require the hotel to pay severance.

“We have made the decision to terminate your employment on the basis your contract of employment has become frustrated due to unforeseen circumstances beyond our control,” he wrote.

“No severance or termination pay is owing in these circumstances.”

A woman who worked as a front-desk employee for the last seven years was one of the people the hotel fired. She estimates that between 20 and 30 of her co-workers received termination letters at the same time.

“It’s not fair for everyone who got terminated,” she said. “We all need a job after this regardless of whether we’re part-time, in school. A job is a job, it’s still money going into our pockets.”

The woman is studying to be a psychiatric nurse, but said many of her co-workers were older, had worked several years at the hotel and will have a hard time finding new jobs.

“I think everyone should have a choice whether they get to stay or not,” she said. “I feel like they’re getting rid of us just because they can.”

Workers at the hotel are paid slightly better than minimum wage, and as business recovers the hotel may want to hire new workers it can pay less, she said.

At least some of the fired workers have filed complaints with the province’s Employment Standards Branch about the hotel’s refusal to pay severance, she said. But so far different agents have given contradictory interpretations of the law over the phone.

Kanna could not be reached by phone and did not respond to an emailed request for comment.

The Sheraton hotel at the airport has remained open throughout the pandemic. It has independent ownership, but the name and some services are franchised from Marriott International Inc., a publicly traded company worth nearly C$41 billion despite recent losses.

Michelle Travis, the research director for Unite Here Local 40, said the hotel is using COVID-19 as an excuse.

“I think it’s very clear they used the pandemic... as a way to deny severance, and that’s a real problem,” she said.

Workers at the Sheraton weren’t unionized, but officials from Unite Here have been talking with them for some time, Travis said.

She noted that Premier John Horgan has said he expects businesses will bring back their previous employees when they restart, although there is no legal requirement for them to do so unless they have a union contract with recall provisions.

“This example totally flies in the face of what the expectation is, and it runs counter to the fair treatment of workers and it’s really the worst possible kind of behaviour you could see on the part of an employer,” Travis said. “I think we want to avoid seeing more examples of employers taking advantage of workers during a pandemic.”

The province needs to make sure workers’ legal rights are upheld, she said, including the right to severance payments when they’re terminated.

But it also needs to introduce a mechanism so that they have a right to return to their jobs when the time comes, Travis said.

“We think this is a hotel that’s going to come back,” she said. “This was a booming industry up until the pandemic hit, and it is going to come back eventually.... There should be a right of recall whether you’re union or non-union.”

B.C.’s Labour Minister Harry Bains was unavailable for an interview.

In an emailed statement, a spokesperson for the ministry said employers are required to follow the Employment Standards Act and regulations. “If a worker believes that their employer failed to follow the act or the regulations, they should file a complaint with the Employment Standards Branch which will investigate, mediate or conduct a hearing.”

In early May, the B.C. cabinet decided an employer can lay off a worker for reasons related to COVID-19 for up to 16 weeks (up from the previous 13) in a 20-consecutive-week period without triggering termination and severance pay requirements.

Since the legislature returned Monday, the opposition BC Liberals have pressed the government to extend the amount of time an employee can be laid off before they are considered terminated and eligible for severance pay.

Echoing a call from B.C. business organizations, they asked to extend the period to Aug. 31, plus another six weeks once the emergency orders are lifted.

“No one, least of all the hard-working women and men that operate small businesses in British Columbia, is attempting to avoid legal responsibility to employees,” Abbotsford West BC Liberal MLA Michael de Jong said in the legislature Tuesday. “Quite the opposite. The operators of those small businesses want to stick around so that they can continue to employ those people.”

Val Litwin, the president and CEO of the BC Chamber of Commerce, said he was unfamiliar with the situation at the Sheraton and couldn’t comment on it. In general it’s in the interest of both employers and employees to maintain a relationship, he said.

“What we’re hearing from most workers and teams is they would also like to come back,” he said. “They would like their employer to not go insolvent or declare bankruptcy, because they think they can get a better cheque with their old employer than being on CERB and they would prefer to stay tethered to their previous employer instead of duking it out in a marketplace that’s now sitting at 13.5-per-cent unemployment.”

Business organizations in the province aren’t seeking to be excused from having to pay severance in cases where terminations become permanent, Litwin said.

“Our members are committed to paying severance, are not suggesting or asking... that government wave a wand and make it possible for employers not to pay severance. That is not the ask.”

The province saw the wisdom of extending the temporary layoff period to 16 weeks and will hopefully agree to extending it further to allow businesses more time and flexibility to restart, he said.

“This is not taking severance off the table. Workers need employers. Employers need workers. There is nothing about what we’re proposing here that has one party left out in the cold.”

Horgan said in the legislature that the government has heard concerns from the business community and has a meeting scheduled with its representatives Thursday to continue the discussion.

UPDATE: Government extends temporary layoff period.

On June 25 the B.C. government extended the temporary layoff period to Aug. 30 and reminded employers and workers they can apply for a variance under the Employment Standards Act if they agree more time is needed.

In a statement, Labour Minister Harry Bains said the extension provides more certainty and flexibility.

“This will also give additional time to ensure that employers and workers are able to craft agreements if there is a need to further extend temporary layoffs, while still protecting workers' rights to compensation for length of service,” Bains said in the written statement.

The government also released a prepared statement from Bains saying: “Government has been clear that we expect all businesses to respect workers’ rights and the benefits they’ve earned. I can’t comment on a specific case before the Employment Standards Branch but businesses should be aware that they could be ordered to pay penalties on top of compensation for length of service if they are found to have illegally denied benefits.”

* Story edited on Feb. 17, 2023 to provide anonymity to a source.