Mass terminations have been making the news in the past year, with the impact hitting across industries and across the country. A Globe and Mail article from May 2, 2023 provided a comprehensive list of mass terminations affecting Canadian workers, and predicted that we may see more mass terminations as we face a possible recession. Mass terminations can have a significant impact on local economies, and for that reason, employers have specific obligations in the case of mass terminations.
Notice of Mass Termination
Every jurisdiction in Canada, except Prince Edward Island, has special notice requirements for mass terminations. In all of these jurisdictions, the obligation to give notice of a mass termination is separate from the obligation to provide individual notice of termination to each employee – this means you must do both.
The threshold, or trigger, for having to provide notice of a mass termination varies between jurisdictions, but there are three considerations in determining the threshold in each jurisdiction:
- the number of employees being terminated
- the time period in which the terminations are taking place
- the location of the employees who are being terminated
The first is the number of employees being terminated. In Alberta, British Columbia, Manitoba, Newfoundland and Labrador, Ontario and the Federal jurisdiction the number is 50. In New Brunswick, Nova Scotia, Quebec and Saskatchewan the number is 10. Note that in New Brunswick there is also a requirement that the number of employees must represent at least 25% of the total number of employees. The legislation in a number of jurisdictions also provides exemptions for certain employees (for example, a requirement that employees must be employed for a minimum period of time or an exemption for employees who are engaged in seasonal work).
The second is the time period in which the terminations are taking place. To trigger the obligation to provide notice of mass termination, the requisite number of employees must be terminated within a certain period of time. In Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, and Saskatchewan the period of time is 4 weeks. In British Columbia and Quebec the time period is 2 months.
The third is the location of the employees who are being terminated. Some jurisdictions provide that notice of mass termination is only required if the requisite number of employees at a single location are terminated within the specified time period. For example, the Alberta Employment Standards Code provides that notice of mass termination is required if an employer intends to terminate the employment of 50 or more employees at a single location within a 4 week period.
Other jurisdictions are silent about location – the obligation to provide notice of mass termination applies when an employer intends to terminate the requisite number of employees within the specified time frame, regardless of whether they work in a single location or in multiple locations.
Note that the Ontario government has proposed amendments to the legislation to make it clear that remote workers are to be included in determining the number of employees terminated if the employee performs work in their residence and does not perform work at any other location where the employer carries on business.
When notice of mass termination is required, there are specific requirements for the notice. For the most part, the requirements include:
- who must be given notice;
- what must be included in the notice; and
- when they must they be given notice.
Every jurisdiction provides that the government must receive notice of mass terminations, either by providing notice to the Minister or to the Director of Employment Standards (or other similar office). The purpose of this is to allow the government to respond to the mass termination by providing programming, training and support to affected employees. In some jurisdictions.
Most jurisdictions also provide that notice must be given to a trade union, if the employees are represented by a trade union and a number of jurisdictions require notice of a mass termination also be given to each employee.
The contents of the notice of mass termination vary, but in all cases includes:
- the number of employees terminated; and
- the effective date or dates of the termination
In some jurisdictions, the notice must also include the following:
- reasons for the termination
- location at which the termination takes place
- nature of the employer’s industry
- name of any trade union, and in some jurisdictions the address
- estimated number of employees in each occupational classification who will be terminated
- nominations of people to represent the employer on a joint planning committee (Manitoba)
- employer’s name and mailing address
- the number of employees at each location who are paid, hourly, salaried, and on some other basis
- the number of employees who are being terminated who are paid hourly, salaried, and on some other basis
- the economic circumstances surrounding the terminations
- the name, title, and telephone number of the person who completed the notice form on behalf of the employer (some jurisdictions also require the email address)
The time frame for giving notice of mass termination is also prescribed by the legislation. In some jurisdictions it is a set time period, regardless of circumstances and in others the time period varies depending on the number of employees whose employment is being terminated. Where the time for giving notice is a set period, it is tied to the termination of the first employee. For example, in the Federal jurisdiction, notice must be given at least 16 weeks before the date of termination of the first employee.
There may be other requirements that apply to mass terminations. For example, both Manitoba and the Federal jurisdiction provide for a joint planning committee. Employers are required to work with this committee and to compensate employees who are carrying out committee functions.
An employer must also comply with all of their other obligations that generally apply during a notice period and on the termination of employees.
Consequences of Non-Compliance
The biggest risk of non-compliance is litigation, and in particular, the risk of class action litigation. We previously wrote about this issue in our post titled “HR Compliance Mistake Costs Company More Than $1 Million”. The case discussed in that post is a prime example of the risks of non-compliance in a mass termination.
How Compliance Works Helps HR Professionals
Understanding your employment law obligations means looking at a number of different sections of employment standards laws, including both the Acts and Regulations. It can be hard to know where to look, or to feel confident that you looked at everything.
Compliance Works makes it easy to identify all of your requirements by pulling together all of the related requirements from Acts and Regulations in an easy-to-read plain language summary that is always up to date, providing you with confidence that you have it all covered.