Termination and Layoff Lawyers

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Termination and Layoff: An Unavoidable Reality in the Job Market

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In an increasingly competitive international economic context, and with the technological advancement of service automation, it is common for small and medium-sized enterprises (SMEs) in Quebec and federally regulated companies in Canada to proceed with employee termination, layoff, and collective dismissal. It is a drastic solution that allows employers to cut costs affecting the productivity of the company and to optimize the existing workforce to ensure survival, continuity, and even in some cases growth of the company. Of course, the sudden termination of the employment contract is not without consequences for the terminated or laid-off employees. Indeed, the employee or unionized worker finds themselves without a job and must start looking for new employment, even contracting a headhunter or dealing with a placement agency. Our firm aims to be a key partner in labor and employment law and regularly advises terminated or laid-off employees receiving severance agreements, commonly known as « packages ».

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Termination: The Definitive Severance of the Employment Relationship for Company-Specific Reasons

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It is important not to confuse dismissal with termination. Unlike dismissal, where the employer ends the contract for reasons related to the employee's behavior or competence, termination is the end of the contract for reasons specific to the company. Indeed, the law allows the employer to terminate the employment contract, thus terminating the employee, for the following reasons:

• Economic reasons, such as significant loss of clientele or contracts, a drop in revenue, a decrease in profits, or financial difficulties
• Operational restructuring, including job consolidation or elimination due to changes in the company’s structure or business strategy
• Technological advancements, leading to task automation and changes in technical requirements

There is no legal protection for employees who have accumulated more than two (2) years of service and for employees of federally regulated companies (i.e., banking industry, telecommunications, railways, maritime, nuclear, or atomic energy, etc.) who have rendered more than one (1) year of good and loyal services. The only significant obligation for standard termination is to give reasonable notice as provided by the Act Respecting Labour Standards, the Civil Code of Quebec, and the Canada Labour Code for federally regulated employees. For employees of private federally regulated companies, we recommend reading the Government of Canada's website: Termination, layoff or dismissal - Canada.ca

Of course, this decision by the employer is sometimes scrutinized by the employee and even contested in court. Indeed, termination should not be an indirect method of dismissing an employee. Constructive dismissal has been widely discussed, and the courts define it as resulting from a substantial modification of the essential conditions of the employment contract, such as a sudden decrease in salary or reassignment to a different position with lesser conditions. Courts will also look at whether the employer has good and valid objective arguments to justify the termination. In such a case, the employer will bear the burden of demonstrating that they considered performance, skills, versatility, and seniority of the employees when making the decision to terminate for economic, organizational, or technical reasons. For those interested, here is a decision by the Tribunal administrative du Travail (TAT) that had to consider whether it was really a termination or rather a dismissal within the meaning of the law: http://canlii.ca/t/h2nxj

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Layoff

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Layoff often implies that the company is in financial difficulty, thus forcing the employee to look for employment elsewhere as there is no guarantee that they will be able to work again within the same company. However, a layoff is an interesting alternative to termination because it allows the employer to recall the employee to work without having to proceed with a new hiring process. The employee may thus be called back to work during the layoff period. Although it is unwelcome news for the employee and to a lesser extent for the company as well, a layoff can allow the survival of the company, the improvement of its finances, and possibly ultimately the recall of its laid-off workers.

Our lawyers specializing in termination and layoff have the necessary experience to assist you in all these procedures.

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Collective Dismissal

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Collective dismissal is aptly named. It refers to the dismissal for economic, organizational, or technical reasons targeting a collective group of at least ten (10) salaried workers from the same establishment. A collective dismissal always has significant consequences for the economy of a region in Quebec or a city in the Greater Montreal Area. For this reason, the Quebec government has established several rules to follow to frame the employer's right to proceed with a collective dismissal.

Firstly, the employer must send a notice of collective dismissal prescribed by regulation to the Ministry of Labor, Employment, and Social Solidarity. The following information, which may not be exhaustive and may change following the adoption or amendment of the current regulations, must be transmitted:

• The name and address of the employer's company and the establishment concerned
• The sector of activity of the company
• The name and address of the union representing the employees affected by the collective dismissal, if applicable
• The reasons for the collective dismissal
• The planned date of the collective dismissal
• The number of employees possibly affected by the collective dismissal

It is important to consult a lawyer before proceeding with a collective dismissal because the notice periods vary depending on the number of employees affected. The notice must not only be sent to the Ministry of Labor, Employment, and Social Solidarity, but also to the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST) and to the union, if there is one, in addition to being posted in the establishment in view of all the employees concerned.

While the collective dismissal notice is being processed, the working conditions of the employees cannot be changed without the agreement of the affected workers or the union, if applicable. The duration of the notice provided for in Articles 84.0.4 and following of the Act Respecting Labour Standards varies according to the number of employees affected by the collective dismissal:

Again, given the complexity and sensitivity of a collective dismissal, it is important for the employer to seek advice from a labor and employment lawyer because any insufficient notice may result in the employer's obligation to pay a compensatory indemnity to the employees. Moreover, it should be noted that this notice does not exempt the employer from the obligation to transmit an individual notice of employment termination to each of its employees.

Depending on the scale of the collective dismissal, the Ministry of Labor, Employment, and Social Solidarity may request that the employer, the union, and the employees form a reclassification assistance committee dedicated to facilitating the re-entry of terminated employees into the job market.