Incentives such as hiring bonuses and enhanced short-term compensation can be used to combat labour crunch

In the last week, I have taken four flights on Air Canada. As someone who travels regularly to trials across the country, I am in the highest category of their frequent flyer program and get treated very well by the airline. But that has offered me no immunity to the ills hitting the travel industry these days.

Of the four flights, I faced three cancellations plus delays that were all an hour and a half or longer. On the last one, I left 40 minutes late and then sat on the tarmac in Toronto for close to three hours and waited another two to pick up luggage. My calls to get information from the airline, which used to be answered immediately, took more than half an hour. I can only imagine how long others waited.

The situation is not unique to Air Canada. Despite receiving myriad excuses, the real reason for my — and every flight traveller’s — travails is inadequate staffing.

When COVID hit, the airlines had to survive and were forced to lay off frontline workers: flight attendants, pilots, baggage handlers, everybody. But with the worst ravages of COVID behind us and people flying again, their recall notices were ignored. Their workers had moved on.

This dilemma is endemic across the entire hospitality industry and beyond. Many airlines, hotels, restaurants, as well as other businesses forced to close down, have been reluctant to recall employees for fear of having to lay them off again and facing constructive dismissal actions. Now that Canadians have been educated, through columns such as this, that would assuredly occur.

Let me iterate clear law: In the absence of a contract providing employers the right to lay off, a layoff of a non-union employee is a constructive dismissal. The exceptions are so rare as to not merit mention. What is also the case, as readers know from their own experience, is that very few Canadian employment contracts, at least until now, had clauses permitting layoffs. This is different than the situation for unionized employees, who can be laid off for lack of work, almost always, without recourse.

Employers in industries forced to close down have had the difficulty of their employees moving on to other industries and jobs and reluctant to return to jobs they now view as perilous and insecure.

What should employers do?

  1. To protect themselves from future constructive dismissal claims, they should develop contracts permitting them the right to lay off non-union employees for lack of work. They already have that right with unionized employees.
  2. Unless this would prevent them from hiring sufficient employees, they should revise their employment contracts to make them comply with current law so as to limit severance upon dismissal.
  3. They should provide employees bonuses to return to work but have a provision requiring repayment and deduction from an employee’s final earnings if they resign within, say, six months. Another alternative is a sliding scale of reimbursement depending upon how long the employee remains before resigning.
  4. If they face a surge in demand, such as the airline industry is now experiencing because of pent-up demand to travel and visit family again, provide further additional compensation for a specified period to encourage employees to return.
  5. If there is such anticipated short-term demand, they should provide employees who agree not to take vacation during those busy months a bonus. Ironically, some unions have been fighting against those bonuses despite their members wishing to have the extra money. Legally, employers do not need to do this. They have the absolute right to determine when employee vacations are taken as long as employees receive the vacation mandated by the employment standards act at sometime within the year. But dictating vacations against employees’ will risks losing those who can readily secure other work.