Illegal Layoffs And COVID-19

Illegal Layoffs

Illegal Layoffs | Author : Bram Lecker, Employment Lawyer

One of the most insidious consequences of COVID-19 is the rise of illegal layoffs in Ontario. As employment lawyers who primarily represent employees, we are at the frontline of an infuriating trend. We fully appreciate the unprecedented economic headwinds that employers face presently. If this forces some to let staff go, they should follow the rules set out in the Employment Standard Act, 2000 (ESA). While many play fair, the current environment appears to have emboldened the worst employers out there. Some have chosen to go about this unpleasant business shamelessly. What appears to fuel their audacity is the fact that employees often inadequately understand their rights.

Layoffs And Terminations

In the present economic climate, employees must understand that the law does not allow employers to keep you suspended in an uncertain “grey zone” where your employment status remains unclear. People often use the terms “layoffs” and “terminations” interchangeably and incorrectly. Understand that your rights and entitlements vary greatly depending on which one applies to you.

A temporary layoff is finite in nature. The law requires employers to stipulate a recall date when they declare one. Earlier this year, the Ford government amended the ESA with Infectious Disease Emergency Leave (IDEL) provisions to help employers ride out uncertain times. These amendments were unusually pro-employer and reflective of the abnormal times we find ourselves in. They diverged from our tradition of giving due diligence to employee rights to balance the higher level of control employers have always held in employment relationships. However, even with IDEL, the law remains untouched regarding terminations, common law and employee severance entitlements. And more importantly, IDEL cannot be used underhandedly for non-COVID-19 related reasons.

Also, IDEL is temporary in nature and the amendments will expire on January 2, 2021. At that point, employers must either recall you back to your duties, officially declare extended layoffs in accordance with the ESA guidelines or terminate your employment with proper notice and severance.

No Recall Dates & Illegal Layoffs

We do not undermine the impact of the pandemic on entrepreneurs and employers in Ontario. Indeed, one only needs to drive along the main streets of our towns and cities to witness shuttered storefronts as proof of the devastation. The economy has not rebounded to pre-COVID-19 times. Fully appreciating this hardship, the federal government introduced wage subsidy programs to share the financial load with employers, encouraging them to recall employees back to work. They also extended interest-free loans with generous repayment terms to business owners, and the Central Bank continues to keep interest rates low to facilitate borrowing. Canadians can consider all of this a salute to the risk entrepreneurs and business owners are taking to keep commercial activities and employment going through the turbulence.

That is why we find it unconscionable to find some employers scrounging for more on the backs of hapless employees. They have brazenly used the pandemic and IDEL as a cover to clean up shop by ignoring individuals they do not want back, pleading “no work today“. All the while, they are operating at full speed, business as usual, with a new crew at the helm. Anyone on layoff who discovers someone else performing their job is justified in questioning the validity of this situation. IDEL provisions only apply to COVID-19 related economic constraints. Employers cannot use them as a convenient cover to clean up shop.

Employers who act in bad faith will ignore your pleas for clarity of your job status, and they will drag the matter out as far as they can. They hope to frustrate you into finding work elsewhere. In doing so, you may automatically give up your termination entitlements, helping them to walk away with impunity. The law in this matter has been established for decades, and our case, Martellacci vs. CFX/INX Ltd., stands as a lead authority

A Precedent in Illegal Layoffs

In 1997, we represented Gladys Martellacci in her dispute with CFC/INX Ltd. She had been a purchasing agent with them for 16 years, without any incident of poor performance. In April 1996, they laid her off temporarily for 12 weeks, stating financial hardship. This came without notice; they stopped her pay, forced her on EI and reduced her benefits

Later that year, she discovered her former assistant was performing her job; her Record Of Employment did not stipulate a recall date. When she came to see us, the layoff had left her completely unprepared financially. She had never signed any agreement that stipulated layoffs as a remote possibility, and the company did not have a history of seasonal-type layoffs, making the entire incident highly irregular in our minds.

Shortly after, they extended the layoff by three more months. But aware of our involvement in her case, they reinstated her full benefits to comply with their legislative obligations. As a final insult, when they finally recalled her back to work, it was to a much junior clerical position. This was a textbook example of what illegal layoffs look like. We successfully obtained wrongful dismissal damages for Ms. Martellacci, which allowed her to move on with her life.

Employees At Risk for Illegal Layoffs

We cannot explain what prompts some employers to behave in bad faith to conduct illegal layoffs. However, we have observed a pattern that puts some employees at a higher risk for such treatment.

1. Senior & Tenured Employees

Senior and tenured employees who are close to retirement have become easy targets for the chopping block during the pandemic. Your employer might have found a junior employee to replace you, at a fraction of your salary. In addition, your pending retirement could weigh heavily on your employer’s mind. They will be on the hook for a generous severance package if you have been with them for a long time. The pandemic might have given them just the answer they were waiting for from above, to avoid all of it.

2. Ill & Disabled Workers

Another group vulnerable to illegal layoffs are ill and disabled employees, who are either off on medical leave or just about to return. An uncaring employer will apply the odious HR term, “damaged goods” to you, especially if you cannot hit the ground running and require accommodation. Accommodation can add costs, cause disruption and affect the processes they have always had in place. And if the person who filled in for you is doing a good job, then they may not want you back.

3. Parents & Caregivers

And finally, parents along with pregnant women, those on maternity leave and caregivers remain the most unfortunate group susceptible to illegal layoffs during this time. The pandemic has been tough on parents and caregivers, but your employer may not want to entertain arrangements that might allow you to balance work with your family obligations. Parental accommodation as a basic employee right has long been settled by the Supreme Court of Canada when we represented Michael Hilton in 2003 against his employer, Norampac. Your employer may be counting on you not knowing about this. Do not let them manipulate you into an unwilling resignation.

If you suspect you are caught up in an unfair situation with your employer, then contact us for a complimentary telephone assessment. If we determine your circumstances constitute an illegal layoff, then we will invite you for an in-depth consultation with an experienced employment lawyer to devise a strategy to help you. Your employer might simply require a legal smack behind the head to remind them they are skirting the law. In doing so, we can help reinstate you back to your position.

Alternatively, your employment relationship might have degenerated. You may no longer trust your employer and want to move on. In this case, we can negotiate the terms for your departure. Many factors come into play when calculating termination pay. While the law stipulates minimums, our common laws inject a second, more subjective layer of conditions into the calculations. Severance negotiation remains a cornerstone of our practice and we pay very close attention to common law entitlements to maximize the value of what we obtain for you.

If you have already quit in frustration, then we encourage you to contact us, regardless. You may have a case for constructive dismissal that allows us to go after them for your termination entitlements. Lecker & Associates have primarily represented employees for over 35 years. If the pandemic has cornered you into an uncertain employment situation, you deserve answers. Contacting us is the first step in this process.

About The Author

Bram Lecker, B.A., LLB., is the principal of Lecker & Associates, and one of the most experienced employment lawyers in Ontario. For over 35 years, he has built a skillful team of lawyers who can successfully represent employees in disputes against their employers.