Nightclubs Must Close. Restaurants can Operate but with More Restrictions.

23. September 2020 0

On September 18th, Dr. Henry ordered that all nightclubs cease operating, and imposed new restrictions on restaurants and other similar businesses serving alcohol.  This raises significant considerations for the owners, including how to manage their existing employees. 

One of the considerations for employers is whether they can rely on the doctrine of frustration (or the specific provision for “impossibility” in section 65(1)(d) of the Employment Standards Act) to avoid having to provide notice or pay on termination of their employees if they need to terminate the relationship.  See, for background, our blog posts on April 9, 2020 and August 17, 2020.   

Nightclubs

Dr. Henry ordered owners and operators of nightclubs to stop operating as nightclubs. 

These businesses may have to terminate their employees since they cannot operate.  If they cannot access the CEWS (wage subsidy) and have to terminate their employees in the coming weeks, they may be able to argue that their employment agreements have been “frustrated” or are “impossible to perform”, such that termination notice or pay in lieu is not owed to the employees.  These businesses have a better chance of relying on the “frustration” or “impossibility” exception because they have been ordered to cease operations. 

Restaurants/Lounges

Dr. Henry imposed new restrictions on restaurants, cafes, pubs, lounges.  These restrictions include the following for most of these types of premises: 

  • Patrons must be able to maintain a distance of two metres from other patrons, unless they are separated by physical barriers;
  • Patrons must generally be and remained seated;
  • Alcohol can only be served to those who are seated;
  • Patrons must not congregate at areas inside the premises or outside the premises;
  • There cannot be more than six patrons seated at a table or booth, even if they belong to the same party.
  • Dance floors must be closed with physical barriers or occupied with tables.
  • Patrons must not sing, engage in Karaoke or dance on the premises.
  • Jam and open mic sessions must not be held on premises.
  • Background music and any other background sounds, such as from televisions must be no louder than the volume of normal conversation.
  • Liquor sales for onsite consumption must cease by 10:00 pm.
  • Unless a full meal service is provided, premises must close by 11:00 pm and all patrons must vacate the premises.  If a full meal service is provided, premises may stay open, but liquor must not be served until 11:00 am the following day.
  • Liquor must not be consumed on premises by owners, operators or staff after 11:00 pm.

These restrictions may result in fewer employees working in restaurants in the coming weeks.  As compared to nightclubs, it will probably be harder for restaurants/pubs to argue “frustration” or “impossibility” if they can continue to operate but have to terminate some of their employees in the coming weeks due to reduced business volume.  However, the actual application of “frustration” or “impossibility” remains to be determined.  A complete copy of the Order is found here.

This update was authored by Scott Marcinkow. Looking for more information regarding workplace issues surrounding the COVID-19 pandemic in BC? Contact Scott at smarcinkow@harpergrey.com or anyone else listed on the authors page.