Rights of workers in the tech industry

This week we delve into the world of tech worker layoffs. The COVID-19 pandemic, economic instability, and shifting market demands have all played a role in reshaping the workforce, and the digital product industry has been particularly affected. With many tech companies restructuring and downsizing, it’s more important than ever for employees to understand their legal rights when it comes to losing their jobs. Jill and Dana provide a refresher on termination basics such as minimum entitlements, notice periods, and employment contracts, as well as factors unique to tech industry workers.


Jill Lewis: Welcome to All Worked up. I’m Jill.

Dana DuPerron: And I’m Dana.

Jill Lewis: Dana, what are we worked up about this week? 

Dana DuPerron: Oh, I’m going to sing. [Sings] Let’s talk about tech, baby, let’s talk about you and what you got. That’s it, that’s as far as I got. The voice of an angel –

Jill Lewis: Sorry.

Dana DuPerron: –I know. So –

Jill Lewis: But talking about the tech industry, guys, I never thought that we were going to say this, but there’s been a decline in the tech –

Dana DuPerron: A little bit rough, a little bit rough.

Jill Lewis: Yes, this usually was an industry, especially in Ottawa, like, a huge industry in Kanata, and we’ve got our own little tech boom here – 

Dana DuPerron: I went to Kanata not that long ago, and I could not believe how big it was, and how I was driving for such a long time in Kanata. 

Jill Lewis: Oh, like, wanting to look [unintelligible 00:01:16].

Dana DuPerron: Yes, yes, exactly, so from really north. 

Jill Lewis: So yes, it’s been really shocking to see this drop in tech, and obviously, with that, there are going to be a lot of terminations. So, we just wanted to dedicate an episode to, you know, just what to expect when you’ve got the severance package. 

We have episodes previously, but how would it specifically work for people in the tech industry. You know, how should we start, like – 

Dana DuPerron: Well, so, OK, your employment’s terminated, you are given a termination package. 

Jill Lewis: Yes.

Dana DuPerron: Go have it looked at =

Jill Lewis: By a lawyer. 

Dana DuPerron: – by a lawyer. What I see with a lot of tech companies – and this is just generalising, so I could be – it’s not always the case, it’s just like, here’s a number of money you’re going to be paid, and it’s not sort of explained – 

Jill Lewis: Oh, here’s a lump sum.

Dana DuPerron: – what it is, so it’s kind of hard for people to figure out, how much does this represent? What period of time does this represent?

Jill Lewis: Yes.

Dana DuPerron: We’ve talked about your minimum entitlements tech employees get. They’re entitled to the notice and severance under the ESA. They’re often not entitled to things like overtime pay, so if you thought you had accrued entitlements there, not always the case, depending on what you do. 

Jill Lewis: Yes.

Dana DuPerron: IT professionals is what’s carved out of some of those clauses in the ESA. But you get that notice if you’re contract – if you have a contract – is not enforceable. As we’ve talked about a number of times, you get common law reasonable notice of your dismissal. 

And what we’ve often said in the past with tech employees is, “Oh, you’re a tech employee, your notice period – like, you’re going to re-employ –”

Jill Lewis: You’ve got to find new work; you could be already working.

Dana DuPerron: Yes, by the time, before you even got this notice, you know, and you found another job. 

Jill Lewis: Within this intake meeting, you get offered six jobs. I mean –

Dana DuPerron: Yes, it’s often really easy.

Jill Lewis: Typically, yes. You know, sometimes we would engage in negotiations before we could even send the demand letter.

Dana DuPerron: Yes.

Jill Lewis: You know, the client’s like, “Ah, I got a job offer.” So, you know, a lot of times employers were relying on that as well, so the packages that we were seeing coming out of the tech industry were pretty modest, but they did represent a typical length of time that it took a tech employee to find new work, which was sometimes just three or four months. So it was hard to argue – it was hard to argue them, hard to negotiate them. 

But it’s different now –

Dana DuPerron: Yes.

Jill Lewis: – that’s why we want to talk to the individuals specifically, is that your common law notice period, although it’s not set in stone, and we sort of have this one-month-per-year rule –

Dana DuPerron: But no rule.

Jill Lewis: It’s not a rule, and that shifts back and forth. And one of the factors that a court will always look at is the industry itself at the time of termination. So, whether it’s booming or whether it’s declining, that is a factor. And that’s a factor that we would rely on and use as leverage to try and get you a longer notice period.

So, you know, people – tech guys, in the past, they would come see us, and often times we would tell them, you know, this is pretty good. Or they’ve got already a job offer, they’ve got interviews, so they would sort of just take the offers and go. 

What I would say now, especially individuals who are in any sort of specialised area of tech, if you have sort of –

Dana DuPerron: Yes.

Jill Lewis: – niche experience, it’s going to be harder to find work. We’ve got major terminations in Canada and in the United States, so come see us.

Dana DuPerron: Yes, I’ve got a couple thoughts there, because I have had people who have been very niche, and they’re like, “I worked on this one product that my company did, for eighteen years, and I don’t do other tech stuff.” 

Jill Lewis: Yes.

Dana DuPerron: So, that’s a complicating factor. Another complicating factor that I’m seeing more and more, is tech employees who are in their early, mid, late sixties and who have been with the same company for thirty, forty years –

Jill Lewis: [Thirty- 00:05:18] seven years.

Dana DuPerron: Yes, people who have not had to apply for a job since the internet has existed, right. It’s just – it’s a huge – 

Jill Lewis: They used, like, a paper and scroll and they would –

Dana DuPerron: Well, you know, it was, like, you used to go pound the pavement, knock on doors and stuff, and it’s like –

Jill Lewis: A lot of those guys were recruits straight from college. 

Dana DuPerron: Straight from college and –

Jill Lewis: They didn’t even apply; they –

Dana DuPerron: – and then now, jobs require a university degree, an MBA, like crazy stuff like that –

Jill Lewis: Yes, that’s a really good point. 

Dana DuPerron: – that people are, like, “What? How am I going to re-employ?” So, if you’re having those – now, that’s also not necessarily – this doesn’t mean you’re not going to re-employ, because still, a lot of these, you know, people think, OK, it’s going to be a barrier. And it might not be, because their skills are really fantastic –

Jill Lewis: Yes, and experienced –

Dana DuPerron: – and you’ve been with the company for that long and you’ve got that experience. Like, they do sometimes still get snapped up. But there are all these considerations that we have to keep in mind now, that it’s not just, like, “Well, you’re tech, you’ll find another job,” right. 

And that’s what we see with the recession, because before, it was like, tech, sales, yes, you’ll find another job.

Jill Lewis: Yes, you work at the newspaper, OK.  

Dana DuPerron: Yes. [Laughs] Yes, yes, I work for a fax machine company.

Jill Lewis: Yes. [Laughs]

Dana DuPerron: It’s like – you know, it’s just – it might be more challenging. 

Jill Lewis: Exactly, and another thing just quickly to touch on, like, new positions that you’re applying for and looking for, you might be taking a pay cut. So, there may be entitlements during that time, just because you find new work. 

There might be – I predict that there’ll just be more contracts, like, consulting agreements, three, you know, four-month contracts. So, you know, that can get complicated. But just because those are available doesn’t mean that you’re required to take them; it’s not part of the common law duty to mitigate.

But you definitely want to talk to us if you are in the tech industry. You know, come see us before you sign off on anything; there’s usually – there’s usually something we can do –

Dana DuPerron: Yes, don’t try to look in a crystal ball, right, because that’s always the thing; you have sort of your finger on the pulse a little bit more than we’re ever able to. 

Jill Lewis: Yes.

Dana DuPerron: It’s really hard in that first week or whatever, after your employment was terminated. But I’ve also had a lot of people who have been like, “Well, I talked to this contact and this contact,” and you know, stuff slowing.

Jill Lewis: Yes, things are [unintelligible 00:07:31], yes.

Dana DuPerron: And then, if you’re, like, “Well, oh, this package is worth twelve months, even if your notice period would be sixteen or whatever, but you think you’re going to find work tomorrow. 

Jill Lewis: You may just want to take it –

Dana DuPerron: Sometimes take it and run, but talk to someone –

Jill Lewis: Fetch and grab.

Dana DuPerron: – because work through it, right. Make sure you’ve talked it out and see what you can do, yes.

Jill Lewis: All right. OK, that’s our tech – 

Dana DuPerron: Tech talk. 

Jill Lewis: Tech talk.

Dana DuPerron: Oh, good one, yes. All right – whatever.

Jill Lewis: Don’t forget to like, share, subscribe, comment, follow –

Dana DuPerron: Follow, listen – 

Jill Lewis: Yes, I don’t know. Thanks for listening, and we’ll talk to you next week. 

Dana DuPerron: Bye.

Jill Lewis: Bye.


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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