Downsizing a worker on maternity leave

Can an employer downsize a worker on maternity leave and, if so, what severance and termination should be offered?

Question: We have an employee who started working with us in late 2001. She has been on maternity leave since early this year. We’ve been doing some downsizing of sales territories and re-aligning and would like to eliminate her territory as a separate sales region. Can we legally downsize this territory while she is on maternity leave? If so what steps do we need to take? What severance and termination should be offered?

Answer: In all Canadian jurisdictions, the law provides for maternity leave although the specific rules and requirements vary somewhat. Commonly, the applicable employment standards legislation will entitle an employee to a period of maternity leave provided certain conditions are fulfilled, such as having completed a prescribed period of employment prior to seeking such leave.

All jurisdictions entitle the employee to reinstatement at the conclusion of the leave in the same or a comparable position to the one she left. There is also a consistent prohibition against dismissals, suspensions, layoffs, demotions, discipline or other discriminatory conduct in relation to an employee by reason of pregnancy or a request for maternity leave.

It is not uncommon to see labour standards legislation create a reverse onus in cases where an employer is alleged to have discriminated against an employee by reason of pregnancy or having taken maternity leave. Such provisions require the employer to demonstrate the employee was dismissed, laid off, suspended or otherwise discriminated against for good and sufficient cause unrelated to the pregnancy or maternity leave.

In some jurisdictions, should an employer fail to discharge the onus, in addition to any other penalty that may be imposed for such an offence, the court may be empowered to order reinstatement. It is also possible the employee could advance a human rights complaint claiming discrimination on the basis of gender. Within the context of a human rights prosecution, as well, monetary penalties may be awarded in addition to reinstatement as a remedy.

The legislation does not set out any explicit prohibition that would prevent an employer from discontinuing any part of its operations for valid and justifiable business reasons.

However, where a discontinuance of part of the business enterprise impacts upon an employee’s entitlement to return to employment at the conclusion of her maternity leave, the employer runs the risk that the change may be challenged as constituting discriminatory treatment by reason of the pregnancy or the maternity leave.

Therefore, while you may not be prohibited from downsizing the territory as you have contemplated, you may be subject to a complaint by the affected employee alleging she has been the victim of prohibited discrimination. In order to successfully defend such a challenge, it would be important to carefully review the applicable labour standards legislation in the jurisdiction in question and to be in a position to clearly demonstrate the change was made for a reason unrelated to pregnancy or maternity leave.

You have also asked what steps need to be taken. As mentioned, the first step should be to carefully review the employment standards legislation and regulations in place in the jurisdiction where the employee is situated. In addition, you should carefully review the reasons why the change is to be made. You will also need to assemble evidence to demonstrate that the change is for valid business reasons. You should also consider communicating with the employee about the changes prior to the expiry of her period of leave. She may be in a position to start her job search early and therefore minimize the period of unemployment in the period following the conclusion of the maternity leave.

You have also inquired as to what severance and termination should be offered. Again, these are matters that should be considered in light of the employment standards legislation and regulations in force in the subject jurisdiction. You should also bear in mind that the period of reasonable notice will not likely start until the completion of the maternity leave. In addition, statutory employment standards notice provisions are typically the minimum notice requirements.

Ordinarily, an employee will be entitled to a longer period of notice in accordance with the principles established by common law, also known as judge-made law. Finally, if the employee finds a new job, it may reduce your liability for severance pay.

Brian Kenny is a partner with MacPherson Leslie and Tylerman LLP in Regina. He can be reached at (306) 347-8421 or bkenny@mlt.com.

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