President Trump has officially announced his plan for significant tariffs on imports from Canada and Mexico, with most goods being hit with an additional 25% tariff. The move will unquestionably penalize American consumers of Canadian goods, but our manufacturing and agriculture sectors will undoubtedly be hit hard.

With our Prime Minister awaiting a leadership change, an Ontario Provincial election coming in weeks and a Federal one likely soon to follow, it is hard to tell exactly what will come next. The Prime Minister has launched retaliatory counter-tariffs, and the Premiers have actively been meeting with their Washington counterparts. However, all accounts indicate that President Trump remains undeterred, and it is unclear exactly what ‘victory’ he is seeking here. 

What we do know is that the impacts on the workplace will be profound.  Some estimates suggest nearly 2 million Canadian jobs are on the line, which would have significant impacts on businesses large and small. Yet if you need to conduct a mass termination within your workplace, you should know that you’re playing by a different set of rules under the law. 

What is a mass termination in Ontario, and what do employers need to know?

What is a mass termination?

Under the Employment Standards Act, 2000 (the “Act”), a mass termination means letting go of 50 or more employees from an establishment within a four-week period. If an employee works exclusively remotely (i.e: from home) then their home is counted as their workplace for the purposes of a mass termination. If they work from home as well as from an office location then the office is considered the establishment. 

While ‘mass’ is defined as more than 50 employees, the employer’s legal requirements under the Act vary given how many employees will be let go. These obligations are triggered as soon as there are more than 50, but notice periods for 50 employees vs. 200 employees will look different under the law. 

How should employers conduct a mass termination?

A mass termination requires employers to notify the Ministry of Labour before taking any further steps. This is done in the form of a Form 1, which is also downloadable from the Ministry of Labour’s website. This notice needs to be sent in written form to the Director of Employment Standards’ office. It can be done via email, fax, in person, or through mail delivery.

This Form 1 notice also needs to be posted publicly within the workplace, and delivered to each individual employee who will be impacted by the layoffs. No notice period begins until the Form 1 has been distributed widely and through the proper means. In other words, employers who forget or are unaware and skip this step may be on the hook for a prolonged notice period given the circumstances. 

What severance is required in a mass termination?

The amount of termination pay is determined by the Act based on the number of employees involved in the mass termination:

50 to 199 employees: 8 weeks’ notice or pay in lieu of notice

200 to 499 employees: 12 weeks’ notice or pay in lieu of notice

500 or more employees: 16 weeks’ notice or pay in lieu of notice

These measurements are irrelevant of how long an employee has been with your organization, so even a newer employee may be entitled to 16 weeks’ pay in lieu of notice. 

However, employees that have been with the organization for 5 years or longer may also be entitled to severance pay. This is an additional amount under the Act for employees of longer duration where the company has more than 50 employees, or a payroll over $2.5 million. This amount will be unique to each employees’ length of service, but can be up to 26 weeks. 

Can I conduct temporary layoffs instead?

The answer to this depends entirely upon your employment agreements. While the Act does have provisions for temporary layoffs, both parties must have previously agreed to this option in a written employment contract. Without a written employment contract that states that temporary layoffs are a possibility, and will not be considered a dismissal, then they may actually be a termination of employment.

The leading case on constructive dismissal is a Supreme Court case that involved a senior level employee who was temporarily laid off without having previously agreed. The Supreme Court established that this sort of substantial, unilateral change by an employer can indeed become constructive dismissal. In other words, employees could claim that they were actually terminated, and the Court may very well agree. 

Is the minimum severance payment enough?

Not necessarily. While the Act requires a minimum amount of severance specific to mass terminations, that does not mean that employees are required to accept that amount. Depending on their employment contract and what limitations it holds, employees could potentially sue for common law notice. 

Remember, if an employee has no written employment contract, or if their contract was hastily drafted years ago and has not been touched since, there may be a problem. Unwritten or badly written contracts do not lock an employee into just accepting your minimum offer, which means that they could potentially sue for a larger amount.

Final Thoughts

The answer comes from working with an employment lawyer. Even in a mass termination, a lawyer can help assess individual situations, and offer advice to help you mitigate your risks. Taking the extra measures to do things properly may be a nuisance in the moment, but can end up saving the business from significant financial penalties in a courtroom later on.

This is a difficult time full of uncertainty for everyone, but my mission as always is to protect Canadian businesses, and that will not change. Contact my office today to set up a consultation. 

“You are not going to make partner.”  

“You should find something else.”

No termination letter is presented.  

You will only be told that you have a few months to “find something else”, with vague explanations as to what will happen if you do not.  

You might be introduced to a ‘career coach’ to help you with this “transition”.  A transition to what, exactly?

No one will confirm whether your employment has been terminated or even use the word ‘terminated’ or ‘fired’.

You might stop receiving work.  

External clients may be told that you are ‘busy’ when you are not, and your files may be surreptitiously transitioned to a new junior lawyer that has recently joined the firm.  

Someone from a human resources-type department will repeatedly follow up with you to find out how your job search is going.  

You might even be ignored by some of the partners you have known for years and have worked tirelessly for, without thanks.  You might receive job postings from some of these partners.

Does this fact pattern sound familiar to you?

Well, it is one that routinely comes through my door.

Shocking as it might seem, this exact scenario plays out on a routine basis at some of the largest and allegedly most prestigious “Big Law” law firms in Toronto on Bay Street.  

Why? You may ask.  To avoid having to pay their associate lawyers their significant, lawful severance entitlements.

If you are an associate lawyer facing this scenario, now what?

A Primer on Dismissal

If you have not practiced employment law, not to worry. 

In Ontario, an employee can be terminated ‘without cause’ at any time, so long as you are provided with sufficient notice and the termination is compliant with the Human Rights Code and the Occupational Health and Safety Act.  

Terminations ‘with cause’ are for extremely rare forms of misconduct (i.e. fraud) that are unlikely to be at play in a Big Law law firm and employers that assert ‘cause’ when they do not have ‘cause’ can be hit with significant punitive, aggravated, exemplary or bad faith damages.

What makes a dismissal ‘wrongful’ is not that you have lost your job, but that an employer has not provided you with adequate severance.

How do you assess whether your severance is adequate?

The starting point is always the employment contract and what is said about termination.  There is a legal presumption that all employees are entitled to common law reasonable notice upon termination unless the employment contract clearly and unambiguously rebuts that presumption.  Much to the chagrin of employers, the enforceability of termination provisions is an ever-moving target, making it likely that an associate lawyer’s common law entitlements could range from somewhere between 4 to 8 weeks per year of service.

Now, what happens if you resign?  

If you resign, you are entitled to nothing.

Seek Advice

What your firm has done is created a stalemate.  

They have told you that you are not going to become a partner but they have not executed your termination, at least legally, by not providing you with the requisite written notice of termination as required by the Employment Standards Act, 2000 and O. Reg. 288/01.

Because of your significant remuneration package the firm is hoping to ‘shame’ you into resigning on your own volition, saving them a severance package.  

Whatever you do, do not resign and seek advice.

Even Big Law Bay Street lawyers need employment law advice, and there is absolutely no shame in that. 

The only shameful part is walking away without collecting your duly-owed severance.

Remember that given your significant remuneration package, this payment may be sizable, even if you are only owed the minimums prescribed by the Employment Standards Act, 2000.  For example, a 8-year employee at a large Bay Street law firm is likely entitled to at least 16 weeks’ wages – potentially more, if the termination provision in your employment contract is not enforceable.

I have routinely advised lawyers in exactly these situations. I know exactly how the mechanics operate behind the scenes. It is always advisable to seek a legal consultation before taking any next steps, and I am happy to discuss your situation further. Contact my office today to set up a consultation.  

Sexual misconduct in the workplace is never okay. Except, of course, when it is.

Sounds preposterous, no?

We have known for years that sexual misconduct in the workplace is not okay. We’ve attended trainings, perhaps as lawyers even written those same trainings, and are familiar with the ongoing campaign over the last decade or so to educate the broader public on the dangers of workplace sexual harassment. These were driven, in no small part, by the Government of Ontario’s groundbreaking changes to the Occupational Health and Safety Act to introduce duties for employers and workers to address sexual harassment in the workplace.

So why have we not been able to come to a unified conclusion that such conduct is completely and totally unacceptable? Why do we have a bifurcated standard between the types of workplaces and their governing law/regulations – where sexual misconduct will always be grounds for a for-cause dismissal in some workplaces, but not in others? 

A stark divide has arisen over the past two years between our privately-regulated workplaces, and the post-secondary colleges and universities that train so many of those skilled workers. The Government of Ontario has laudably and clearly established in legislation that sexual misconduct is never okay in the latter, and will result in an automatic dismissal for cause with no monies owing to the offender.

The former? Well, that may be a matter for debate. 

Strengthening the Legislation

In December 2022, Bill 26, also known as the Strengthening Post-Secondary Institutions and Students Act, 2022, received royal assent. While the name may be lofty, the Bill itself took a hard line when it comes to sexual misconduct. 

It codified the law stating that “if an employee of an institution (in this case a college, university, or training program) commits an act of sexual misconduct toward a student of an institution, the institution may discharge or discipline the employee for that act, and,

(a)  the discharge or disciplinary measure is deemed to be for just cause for all  purposes;

(b)  the employee is not entitled to notice of termination or termination pay or any other compensation or restitution as a result of the discharge or disciplinary measure…”

There were further requirements as well, namely that such institutions are no longer allowed to enter into any such agreements that prohibit employees from disclosing such past misconduct, and that any clauses already contained within existing agreements are automatically void.

The change was likely precipitated by several newsmaking incidents where it was revealed that post-secondary employees terminated for sexual harassment were able to quickly find re-employment at other unknowing institutions. Their past misconduct was, of course, protected by a non-disclosure agreement as part of their termination settlements. 

Now that a hard line is drawn, it would make sense that the same high standards apply to privately-regulated workplaces as well. The Court of Appeal, however, appears to have other ideas.

Where Render Gets It Wrong

The decision in Render v. ThyssenKrupp, 2022 ONCA 310, was noteworthy when it was first released by the Court of Appeal only a few months prior to the legislative change mentioned above. However, the way that the Court assessed the appellant’s conduct was significantly different, and respectfully, incorrect.

To recap, Render was the operations manager at an elevator business in Mississauga which operated out of a small office of 13 people – 10 men, and 3 women. There was frequent joking banter in the office culture, which may have been deemed inappropriate at times, but it had never raised significant flags in the past. The office did have an Anti-Harassment and Anti-Discrimination policy which indicated a ‘zero tolerance,’ and noted that violators may be subjected to termination of their employment. 

That policy was put to the test during an incident in February, 2014 when, during an exchange with colleagues, the Plaintiff grabbed a female colleague’s buttocks. While he had denied that the grabbing was intended in a sexual nature, he later admitted that he was offering colleagues “10 bucks to shake his hand” – the hand that sexually assaulted a coworker. 

The Plaintiff was terminated for cause roughly one week later, after an internal investigation, and given no severance or termination pay. Yet while the decision was upheld at trial, the Court of Appeal disagreed. It ruled that even though the Plaintiff’s termination for cause was justified at common law, his conduct did not rise to the level that would disentitle him from his minimum entitlements under the Employment Standards Act and its regulations.

Under the regulations of the Act, namely O. Reg. 288/01 section 2(1), which outlines the various circumstances where employees are not entitled to any legally mandated termination or severance pay, the list includes “an employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.” Courts have since used this benchmark as a higher standard of cause versus what had previously been interpreted as ‘just cause’ for termination at common law. 

The Court reasoned that the trial judge noted that the conduct was not ‘preplanned,’ and was done in the heat of the moment. It added, “although his conduct warranted dismissal for cause, it was not the type of conduct in the circumstances in which it occurred that was intended by the legislature to deprive an employee of his statutory benefits.” In other words, Render’s conduct was not seen as meeting that higher standard.

The Plaintiff was ultimately awarded his minimum 8 weeks’ termination pay and would have been awarded statutory severance pay had the Plaintiff properly pled and led evidence regarding the same. 

The Double-Edged Sword

Although Render should not be interpreted to suggest that sexual misconduct will never be cause for termination in workplaces outside of post-secondary institutions, Render puts employers in a difficult position when assessing their risk as to whether to terminate an employee for cause after sexual misconduct has occurred. 

With respect to the Court, it is perplexing to say the least that they are interpreting legislative intent regarding sexual assault in one way, when the legislature has stated very clearly that such conduct is absolutely never okay in a different workplace. The answer is not simply because positions of authority rank differently in the world of academia. The Plaintiff in Render was a senior-level employee, so that simply does not add up.

This sort of conduct is never okay, period.  It is high time that the legislature step in and amend the Employment Standards Act, 2000 and O. Reg. 288/01 to specifically spell out “sexual misconduct” as a prescribed reason why an individual would not be entitled to termination pay or severance pay.  Put simply, when it comes to sexual misconduct there should not be two different standards of cause terminations applicable to different kinds of workplace.

If you find yourself dealing with an incident of sexual harassment in your workplace, and you’re not sure what to do next, I can help. For employers, the next steps are crucial in determining what discipline or penalties should take place, and how a workplace can prevent it from happening again. Contact my office to schedule a consultation.