In the face of an economic downturn, some employers across Canada are being forced to tighten their belts and make hard choices about workforce downsizing. However, what may initially begin as a cost-cutting exercise can quickly turn into a legal quagmire if the process is not executed properly and with sufficient advance planning. read more…
Does a poor economy mean a shorter reasonable notice period? Canadian employers often ask this question—particularly in cyclical industries.
When assessing reasonable notice, courts will consider the employee’s position and responsibilities, length of service, age, and the availability of similar employment. Not only has it been unusual for courts to consider negative economic conditions as a factor justifying a reduced notice period, this has typically been used to lengthen the notice period in favor of the employee.
However, there are two cases from the past year—one from Ontario and one from Alberta—where the court was prepared to give the employer some credit for the economic situation it found itself in. read more…
Despite signs of a recovering economy, Canadian employers are still looking for ways to downsize operations and minimize human resources expenses. One cost-effective manner is to give working notice when terminating an employee.
What is working notice?
Working notice is an alternative to paying out a lump sum upon dismissal. The employee is given advance notice of his or her final date of employment and continues to work until the date of termination. Working notice allows employers to maximize productivity and value while significantly reducing the cost of termination.
In early 2008, the owner of a dental practice, having recently purchased the business, faced some difficult choices. Given what appeared to be a temporary downturn in revenues, the owners decided on a temporary layoff.
While permitted by employment standards laws, the employer in the recent case of Besse v. Dr. A.S. Machner Inc. found out that the courts considered the layoff to amount to a termination of employment. The employment standards law didn’t provide a right to impose a temporary layoff â€“ at least not without triggering all the severance rights the courts normally accord terminated employees.
In today’s economy it’s become commonplace for employers to terminate large numbers of employees at one time. Depending on the number of employees being terminated, an employer may fall under federal or provincial group termination provisions designed to protect employees and the local economy from an influx of terminated individuals re-entering the workforce. As such, it’s important employers be aware of the obligations they are under in order to protect themselves against, at times, hefty consequences.
Employers operating in federally regulated industries are subject to the Canada Labour Code, which contains specific requirements in the event of a group termination in Division IX, Part III and the associated regulations. These define a group termination as a termination of 50 or more employees in the same establishment within a four- week period. In such a case, the employer must provide the Minister of Labour with 16 weeks’ notice in writing of the pending terminations under Section 212. The notice of group terminations is separate and apart from the notice entitlement for each individual employee. The group termination notice itself must contain the following information: read more…
One of the unfortunate outcomes of the current economic climate is that there are fewer jobs to go around for students. Summer and graduating students who have relied on summer jobs for experience and training are finding few opportunities out there.
To solve this problem, many students and graduates are reaching out to companies to offer their services on a gratuitous basis as unpaid “interns.” The mutual benefit seems obvious — especially if an unpaid internship blossoms into a full-time paying job.
The recent decline in financial markets has caused Canadian pension plans to become significantly underfunded. For instance, in QuÃ©bec close to 97 percent of all defined benefit pension plans are currently underfunded.
As this continues, many employers may look for ways to reduce pension costs or at least offset increases of those costs. Such losses can have a significant impact on a company’s ability to survive the current economic downturn.
In these tough financial times, a number of companies are trying to reorganize themselves in order to avoid insolvency or bankruptcy. In Canada, there are several laws that help facilitate this process: the Companies Creditors Arrangement Act (CCAA) and the Bankruptcy and Insolvency Act (BIA). For the most part, employees are often left high and dry during these restructurings, as these laws don’t offer them much protection.
The CCAA is a federal law that allows financially troubled companies that owe in excess of $5 million the opportunity to restructure their affairs. The CCAA process is court-driven, giving judges a high degree of flexibility to decide how best to deal with the specific cases before them. A monitor is appointed to oversee the restructuring and to report to the court when necessary about the restructuring.
By Katie Clayton and Cherity Smith
Since the economic downturn took hold, each day brings another announcement of employee layoffs and corporate downsizing. Recent blog entries have looked at options such as layoffs, furloughs, and reducing hours of work. There is another option in Canada â€“ work-sharing.
What is work-sharing?
Work-sharing is an adjustment program created by the Canadian government. It provides income support to employees eligible for employment insurance benefits who are willing to work a reduced workweek. The reduced workweek would be for a defined time period in order to help the employer avoid layoffs.
In the last several months, we have posted several blog entries detailing how employers can reduce employment costs and/or increase workforce flexibility in these tough economic times. We have talked about furloughs, work-sharing programs, changing employment contracts, adjusting the size of the workforce and reducing employees’ hours of work.
But all of these discussions have been in the context of nonunion workplaces. What about a unionized workplace â€“ do employers have the same flexibility to reduce hours, shorten the workweek, impose work-sharing programs or set up other cost-saving measures? The answer depends.