'When you actually look at the legislation, they don't create any substantive rights for the employees'
Even if you’re not personally involved, it’s hard to miss the headlines around mass layoffs – particularly in the tech industry.
And with the huge rise in remote work because of the COVID-19 pandemic, many employees working from home are facing the axe.
Does this mean they’ve been treated differently by employers when it comes to mass layoffs? The Ontario government appears to think so, judging by a regulatory change being proposed.
Under the new rules, employees who work solely from home would be eligible for the same enhanced notice as "in-office" and other employees in mass termination situations.
This would ensure that remote employees receive the same eight-week minimum notice of termination or pay-in-lieu, “preventing companies from taking advantage of them,” according to the government.
Ontario’s Employment Standard Act’s notice rules for mass termination apply when the employment of 50 or more employees is terminated at an employer's establishment within a four-week period — and that should represent 10 per cent or more of the workforce.
In the case of a mass termination, an employee could be entitled to eight, 12- or 16-weeks’ notice, depending on the number of employees terminated.
Is this going to make a difference?
But is this new rule necessary? Maybe not, according to two employment lawyers.
“There's nothing wrong with it, I think it's the right move, I think it's correct for them to be including remote workers in this, it's logical,” says Jon Pinkus, partner at Samfiru Tumarkin in Toronto.
“But is it going to make any difference whatsoever from a practical standpoint? I doubt it.”
That could change if there’s a “slew of medium-sized companies engaging in massive layoffs,” he says, “but even in that case, those employees are probably going to have common law entitlements that eclipse their statutory entitlements anyway.”
Pinkus cites other moves by the Ontario government around workers’ rights, such as employee monitoring and the right to disconnect.
“These are all things that sound nice, but when you actually look at the legislation, they don't create any substantive rights for the employees. In this case, they technically do create a substantive right, but one that's not actually meaningful.”
Having practised for many years, Pinkus says it is extremely rare for these provisions to take effect.
“Terminating more than 50 employees at the same time is one thing, but to terminate more than 50 employees, and for that to be representing 10 per cent or more of the workforce, that's a very unusual scenario.”
Larger layoffs are usually done by larger companies such as Walmart or Shopify, he says, where 50 or more employees is not going to come anywhere close to 10 per cent of their workforce.
Cameron Hilker, articling student at Suzanne Desrosiers Professional Corporation, agrees that mass terminations that fall under the rules are pretty rare, and he says there have been no interpretations that have talked about what the Ontario government is suggesting.
“I mean, it's solving an issue that may come up in a very niche situation by an employer who's really trying to wiggle around legislation, but I don't even think — if this were to go to court —that a judge would take such stringent reading of ‘What is the work? What is at the employer’s establishment?’”
Plus, an employer could theoretically get around the new rules by firing 45 remote workers, for example, and firing 25 in-office workers to avoid the 50-person threshold, he says.
“There’s no evidence, firstly, that the act would be read that way,” he says, “In other cases, wherever the employee ends up working could be considered their establishment.”
Plus, you have to be careful with remote work, says Hilker, who is based in Timmins, Ont. For example, if an Ontario employer has an employee working from B.C., then that employee’s workplace is in B.C. “which would have meant you would have had to pay them by the B.C. employment standards and you would also be liable for B.C. employment taxes.”
Minimum entitlements for employees
The rules around mass layoffs are already “quite narrow,” with provisions given out on a sliding scale, says Pinkus.
“Basically, the rule is you have to give them an increased amount of notice. So you may have someone who's only been employed for two weeks, but they’re still entitled to eight weeks’ or even 16 weeks’ notice, because they fall under the mass layoff provisions.”
The premise behind the mass termination rules is that “if you release a whole bunch of people into the market all at the same time, then they're all going to be vying for the same jobs,” he says. “That's something that is a common law consideration… You have to acknowledge that those people are going to require more and so… they're going to take a longer time, of course, to find your job.”
Employees are entitled to notice, regardless of whether they’re involved in a mass termination or not, says Hilker.
“To understand how much notice or pay in lieu of notice, you have to look at the contract,” he says.
“Even if that stringent definition [of establishment] was accepted, an employee is very likely to be entitled to more than just those minimums, especially if they have worked for the same employer for a few years.”
Really, what matters for these people is common law entitlements, says Pinkus, “and those mass termination provisions matter very little to those people.”
Should remote workers be treated differently?
When it comes to employees working from home or out of the office, they should be treated pretty much the exact same as in-office workers, says Hilker.
“It's probably good practice, when you are terminating a remote worker, to ask them to come in and then have a meeting with them in a private office, away from the eyes of their co-workers. And give them a termination letter in-person where you would explain what is that you're terminating them for.”
That’s part of being respectful, which is important because courts will look at the manner of dismissal, he says.
“If you terminate an employee in a way that isn't respectful, you could face additional damages on top of whatever notice that employee is offered.”
It’s also advisable for employers to have policies on how a remote work relationship might end, says Hilker, “and if they have such a policy, they would need to follow it because, basically, they're making the rules and courts will hold onto those.”
There are a few pitfalls to watch for in hiring a remote worker — such as different laws in different jurisdictions around taxes, health and safety and employment standards, says Pinkus, “but when the decision comes to terminate their employment, the requirements for the notice are the same, the way you pay out those entitlements is the same.”
