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A shifting world of work

The world of work has been undergoing massive changes over the past decade. The COVID-19 pandemic, economic instability, and shifting market demands have all played a role in reshaping the workforce. Unfortunately, these changes have also led to a rise in group or mass terminations, where large numbers of employees are let go from a company all at once.

Recently, we’ve seen this happen at many large tech companies such as Shopify, Meta, Google, and Twitter, leaving many workers feeling uncertain about their rights and their future. In this blog post, we’ll explore the rights of employees who are part of group or mass terminations and offer some guidance for those who find themselves in this difficult situation under Ontario employment law.

What constitutes a “mass termination”?

A “mass termination” occurs when an employer lays off a large number of employees at the same time, typically due to economic reasons or restructuring.

Specifically, a mass termination is defined as the termination of the employment of 50 or more employees at an establishment within a four-week period. This can be due to the closure of the entire establishment or a portion of it, as well as a permanent reduction of the workforce.

What are employee rights under the Employment Standards Act (“ESA”)?

Statutory Notice

Statutory notice, also known as notice of termination, is a requirement under employment law that employers must give to employees before ending their employment. The purpose of this notice is to give employees time to prepare for the end of their job and find a new one if necessary.

Ontario employees covered by the ESA are provided with special rules relating to statutory notice of termination in the context of mass-terminations.

Calculating termination entitlements during mass terminations entails a different formula than usual termination. For example, the number of employees who are terminated is crucial in knowing how much the employee should be paid out, namely:

  • 8 weeks’ notice if the employment of 50 to 199 employees is to be terminated;
  • 12 weeks’ notice if the employment of 200 to 499 employees is to be terminated; and,
  • 16 weeks’ notice if the employment of 500 or more employees is to be terminated.

Severance Pay

In Ontario, as in many other provinces in Canada, employees who are terminated without cause are entitled to receive a severance pay. Severance pay is intended to provide some financial assistance to employees who have lost their jobs and are now facing a period of unemployment.

The normal statutory severance pay rules still apply in the case of mass termination. Generally, if you qualify under the ESA guidelines, you are entitled to one week of severance pay per year of employment, up to a maximum of 26 weeks.

For more information on how to calculate severance pay, please refer to this blog.

Conclusion

Group terminations of employees can be a traumatic and challenging experience for those affected. However, it is important to remember that you have rights and protections in these situations. Employer have a responsibility to follow proper procedures and provide fair compensation and benefits to those who are let go.

If you have been affected by a mass termination, it is important to seek legal advice and support to ensure that your rights are protected. Additionally, it is important for companies to have clear policies and procedures in place for handling mass terminations in a fair and equitable manner.

Ultimately, while a mass termination can be a difficult experience for all involved, it is possible to move forward and find new opportunities. With the right support and resources, those affected can find ways to rebuild their careers and secure a brighter future.

If your employment has been recently terminated through a mass or group termination, reach out to one of our experienced team members.  

Author(s)

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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