Despite Canada’s economy working hard to recover after COVID lockdowns, it’s been a difficult winter for big box retail. In the past several months, Nordstrom department store, Bed Bath and Beyond, and Best Buy have all announced major cuts to their Canadian operations, including the layoffs of thousands of employees. This comes on the heels of other major employers, such as Google, Amazon, and Microsoft all making major worldwide cuts that will likely impact Canadian workers.
Workers hit by a mass termination can often feel as though they have nowhere else to turn. When all of your coworkers are in a similar boat, it can be easy to feel defeated and accept whatever offer your employer makes and simply want to pick up the pieces and move on. Yet just because your employer is making massive cuts, that does not mean that you can’t go down swinging.
Even if you’ve been part of a mass termination, you still have rights as an employee, and you may still be able to recover more than your employer is offering. So what are your rights during a mass layoff? What happens when your employer conducts a mass termination?
WHAT THE LAW SAYS ABOUT MASS TERMINATIONS
Under the Employment Standards Act, 2000 (the “ESA”), if an employer is letting go of 50 or more employees over a 4-week period, it is considered a mass termination. This places special notice requirements on the employer, and the termination is not official until they have submitted the proper form to the Director of Employment Standards.
There are also additional notice requirements for employees going through a mass termination. If there are between 50 and 199 employees being let go then 8 weeks’ notice is required, 12 weeks’ notice for between 200 and 499 employees, and 16 weeks’ notice for 500 employees or more. Employers must continue to pay regular wages and continue to make benefits contributions during these notice periods.
Under the Canada Labour Code, which governs federally-regulated employers such as banks, airline, and telecommunications companies, employers terminating more than 50 employees must also provide formal notice of the termination, and must provide the employees with 16 weeks’ notice alongside any individual requirements for termination or severance pay.
However, just because these are the minimum legal requirements, you may still be entitled to more. Even if you’re subject to a mass termination, you are still an individual employee, and that does not extinguish your individual rights under the law.
A PRIMER ON WRONGFUL DISMISSAL
If you have a written employment contract, then it most likely states what your employer would owe you in the event of wrongful termination. That’s the reason most employers implement written contracts – they provide certainty in the employment relationship, but are also frequently used to limit an employee’s entitlements.
However, the catch is that most of these contracts are not very well written. In order to limit what you are owed upon termination, an employment contract must use very careful and precise language, and needs to be updated regularly to ensure it is in line with the current state of the law. Otherwise whatever language it says about your termination, if it says anything at all, may be null and void.
In that case, your contract does not serve to limit what you may be owed. Instead, your entitlements are defined by what is known as ‘common law,’ or law made up of previous court decisions, and based on how long it may reasonably take you to find new work. Your former employer is not meant to be your keeper for life. Rather, the law states that their responsibility is to keep you whole, while your responsibility is to search for new work.
HOW MUCH IS MY CASE WORTH?
How much might you be owed? There is no exact formula, but for the past several decades the common law has relied on a legal test known as the Bardal factors, from a 1960 court decision which looks at the circumstances behind each individual employee. These factors include:
• Your age at the time of your termination
• How long you had been in your role
• The nature of the work that you were doing
• The economic circumstances and job market during your search
Again, there is no precise formula, but the goal is to recognize each employee’s unique situation. For example, an employee in their mid-20s, who had been with a company for a short period of time and likely has a full career ahead of them, will be entitled to less than a senior-level employee in their 60s who will likely have a harder time finding re-employment.
Not only are you entitled to your salary for this period, but the law states that you should be compensated as though you were still employed during this time. This includes continuation of your benefits, payment of any bonuses that you may have earned (with possible exceptions), and compensation to make up for any additional perks that may have been included.
It is important to remember that this money is not meant to be a windfall. You are responsible for what is known as ‘mitigating’ your damages, in other words, looking for comparable employment. Your former employer can keep track of, or even assist with your job search, as they are no longer obligated to pay you once you have replaced your income. Severance packages can also include a ‘claw back,’ allowing the employer to stop paying you out, or only paying you part of what is remaining in the package, once you have found new work.
There is one key difference, and that is if your employer is insolvent or declaring bankruptcy. In those scenarios, you may be able to apply to receive some of your earnings through a federal program known as the Wage Earner Protection Program, where employees may be eligible for a one-time payment. This only applies in certain scenarios however, and an employment lawyer can advise you of your eligibility.
FINAL THOUGHTS
If you receive notice as part of a mass termination, some of your colleagues may readily accept the employer’s offer, but there’s no need to automatically go along with the group. You have options, and you may be entitled to more than the employer is offering.
If your employment has been wrongfully terminated, you can always consult with an employment lawyer to review your employer’s offer. Our team at Kung, Lo & Jia LLP is here for you to help offer advice and provide practical solutions for your legal needs. Contact us today to set up a free, no obligation consultation.