Mass Terminations

Written on behalf of Peter McSherry

The recent sad news of the closing of the General Motors plant in Oshawa raises once again the need to be aware of Ontario’s protective laws on mass terminations.
Keep in mind that Ontario law by statute allows for minimum notice and severance pay. Ontario “common law” or judge-made law also provides for potential increased financial compensation in certain circumstances.

Minimum Notice Increased

Ontario’s Employment Standards Act defines a “mass termination” as any firing in which 50 or more employees at the company’s establishment are terminated within a four week period. This includes all locations of the company’s business.

Where this does occur, the company must provide a written notice to the Director of Employment Standards including the details of the termination, the locations affected, the number of employees, the relevant dates, and the economic circumstances which have led to this decision. A copy of this notice must be placed in the workplace.
Individual notice of termination must also be given to each employee.

There are special rules for the number of weeks of notice entitlement in this context which are as follows:

1. If 50 to 199 employees are terminated, then the employer must provide eight weeks’ notice of termination to each employee;
2. If 200 to 499 employees are terminated, then the employer must provide twelve weeks’ notice of termination to each employee; and,
3. If the number of employees terminated is 500 or more, then the employer must provide sixteen weeks’ notice of termination to each employee.

These rules are different from the usual notice requirement which is based on years of service and caps at 8 weeks.
There are situations where the mass termination law does not apply. Where the number of persons terminated does not exceed 10% of the workforce and none of the terminations are due to the permanent closing of all or part of the employer’s business, this rule does not apply.

The employer cannot change any terms or conditions of employment during this time period of working notice. Any revisions to wage rates or benefits are prohibited.

Severance Pay Remains A Claim

The employees may also claim “severance pay” of one week per year to a maximum of 26 weeks where the company payroll exceeds $2.5 million annually and the employee in question has completed at least 5 years of service.

Wrongful Dismissal Damages

These are just the minimum notice requirements of the statute. Presuming no contract to the contrary, all employees will still be able to make a civil claim for compensation for the “common law notice period”. This could be for as long as two years, less the statutory sums.

Human Rights

If the pattern of the dismissals points to adverse treatment due to age, gender, race or religion, a further human rights claim may be possible.

Employees Must Be Aware

It is important to understand your legal rights when facing the bad news of a termination, and in particular, when such a decision effects many co-workers. If you have questions about such an issue, contact the offices of Guelph employment lawyer Peter McSherry. We can guide you through the issues, help you understand your rights, and defend your position. Contact us online or by phone at 519-821-5465 to schedule a consultation