Mass Terminations and Notice of Termination

The Basic Rule

Ontario employment law starts from a basic proposition, one which is implied into every employment relationship, absent a written agreement to the contrary. That implied term forms the foundation of every wrongful dismissal case and requires the employer, in the absence of just cause, to provide advance notice of termination. It is this simple concept that has led to literally thousands of cases in our courts.

One would expect that in the case of an employer giving 11 months advance notice of termination in writing, that such action would eliminate or dramatically reduce many claims of this nature. In one particular situation, that presumption would be very wrong.

Mass Termination

Ontario’s Employment Standards Act contains a provision which deals with mass termination where the number of persons terminated exceeds certain parameters, ranging from 50 to 300.[1] The Act requires that a specific form of notice be given to the Minister of Labour and that this same notice be posted in the workplace in cases where a large number of employees is terminated at the same time.

One purpose of this notice is to put in place certain re-employment programs that are offered by the Ministry to the affected employees, including financial assistance for retraining.

Ontario Court Rules on the Interplay between Mass Termination and Common Law

Mass termination was the subject of a recent Ontario Superior Court decision. 77 employees were set to be terminated due to a plant closure. They were given written notice of termination on April 17, 2014, some 11 months in advance of the termination date which was set for March 27, 2015. However, the relevant form was not sent to the Minister of Labour until May 12, 2015. The issue to be determined at trial was when did the time clock start for the working notice period?

The Court concluded that there could not be legal termination to start the notice period until the moment at which the proper form had been submitted to the Ministry and posted in the workplace. As a consequence of this determination, the prior working notice of 11 months was of no legal effect. This meant that all claims for termination and resultant income loss, both by statute and by common law commenced on May 12, 2015, the date on which official notice was given to the Ministry.

This was a disasterous result for the company and a huge win for the employees. This marked the first time that this issue had been litigated in Ontario.

In reaching this decision, the Court relied upon foundational principles of employment law which reflect the power imbalance in the relationship between employee and employer and hence the need to interpret protective legislation in a remedial and liberal fashion.

A New Principle of Employment Law

The Court added to the basic implied term of advance notice a second term, namely, that this advance written notice be delivered in a manner which is consistent with the mass termination provisions of the Employment Standards Act.

The decision was made in the context of a class action which is not remarkable. That means that this law will apply to any employee impacted by a mass termination of over 50 persons or more in the same four-week period.

Legal Advice Can be Critical

This case is a prime example of the need to take legal advice when facing a termination. Most people would be either unaware of the mass termination rules or believe that advance notice given in this context would be fair enough to deny a claim. If you are facing a termination event, contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation.

 

 

 

[1] Presently S. 58 of the Employment Standards Act