There are many conflicting cases across Canada about whether amounts paid to employees from the Canadian government under the Canada Emergency Response Benefit (“CERB”) program are deductible from wrongful termination damages.

Recently, the British Columbia Court of Appeal weighed in on this ambiguity in the case of Yates v. Langley Motor Sport Centre Ltd., 2022 BCCA 398. The trial judge in this case found that the employee, who was terminated at the outset of the Covid -19 pandemic, was entitled to 5 months of pay in lieu of notice of termination (amounting to approximately $25,000 in wrongful dismissal damages). However, Ms. Yates collected $10,000 in CERB payments from the Canadian government in that 5-month period and the trial judge deducted the $10,000 CERB payments from her damages award. 

The employee appealed, and the BC Court of Appeal sided with her, finding that that policy considerations justified not deducting CERB from her wrongful termination damages.

The Court stated, among other things, “… CERB was an emergency measure delivering financial aid during the early weeks and months of an unprecedented global pandemic. The program’s goal was to mitigate harm to individuals in a moment of great uncertainty. CERB payments notwithstanding, many people lost their livelihoods as a result of the pandemic. It strikes me as out of step with that reality to conclude that the combination of CERB and damages awards leaves individuals “better off” after their employment was terminated than before.”

It appears that the uncertainty regarding the deductibility of CERB payments from wrongful termination damages is now settled law, in BC at least. Other provincial courts will certainly take note but have no legal obligation to follow this precedent. 

If you have any questions surrounding CERB or wrongful termination damages generally, please feel free to contact us.

About the Author

Ljubica Durlovska is an Employment Lawyer at HRC Law Professional Corporation. With a passion for employment and labour law, she has spent many years helping employers with a wide range of workplace issues, including assisting clients with employment contracts, discipline, investigations, policy development, accommodation, termination, and employment-related human rights and health & safety matters. Ljubica also has experience in corporate/commercial law and leasing.

About HRC Law

At HRC Law Professional Corporation, our mission is to provide Canadian businesses with affordable, accessible and top-tier legal services. We will never bill you for our time or surprise you with additional fees. For more information on how we can help, visit www.hrcemploymentlaw.com or contact the author directly by sending an email to ldurlovska@hrcemploymetnlaw.com.