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COVID-19: Employee Law Termination Rights

October 20th, 2020 in Employment & Severance

Bruce Dickinson, the esteemed singer-songwriter, said that nothing lasts forever but the certainty of change.  While the duration of the COVID-19 pandemic remains unknown, we can be certain that it will not last forever and, until it is resolved, we will continue to live through a period of unprecedented change.  For some, such change takes the unfortunate form of employment loss and it is the aim of this blog to discuss employee rights when terminated on the basis of COVID-19.

Termination

As the adverse commercial impact of COVID-19 continues to intensity, many industries are being forced to consider radical steps to save costs and compensate for significantly reduced revenues.  These steps include reducing labour pools through terminations.

Unionized Employees

For unionized Ontario employees, termination conditions are contained in collective agreements and typically account for seniority rights, “bumping rights”, and termination entitlements.  If you are a unionized employee, it is important for you to obtain a copy of your collective agreement (usually through your union representative) so that your termination rights and entitlements can be determined.

Non-Unionized Employees

Non-unionized Ontario employees who are terminated are entitled to notice of termination (or pay in lieu of notice) and severance pay. Courts have held that severance pay cannot be given as working notice and must be given as additional pay at the time of termination.  Severance pay is also in addition to any other amount to which an employee is entitled under Ontario’s Employment Standards Act, 2000 (“ESA”) or under an employee’s employment contract.

Severance Pay

The ESA is the law which sets the minimum amounts of severance pay entitlement and the common law (case law) sets standards for what terminated employees may, in reality, receive.  Severance pay is calculated by: multiplying (a) an employee’s regular wages for a typical work week; by the sum of: (b) the number of completed years of employment; and (c) the number of months of employment completed (that are not included in (a) – partially completed months are not included), divided by 12.  For example:

Hiring Date Termination Date Service Duration Severance Pay
January 1, 2008 October 15, 2020 12 Years + 9.5 Months 12 + (9/12) = 12.75 x $(a)

In the above example, if an employee’s regular wages for a typical work week are $800.00, then severance pay would total approximately $10,200.00.

In Ontario, the maximum amount of statutory (under the ESA) severance pay is the amount equal to an employee’s regular wages for a regular work week multiplied by twenty-six (26) weeks.  Using the above example, the maximum severance pay would total approximately $20,800.00 (26 x 800). Employers may offer less, however, under the assumption that an employee is not clear on these rights. A severance lawyer can help ensure the maximum is received.

Termination for Cause

Some, less scrupulous, employers may attempt to frame an employee’s dismissal due to COVID-19 as termination for cause.  Under such justification, an employer is not required to provide an employee with common law severance.  However, termination for cause relates to serious employee misconduct and, though there is no fixed rule as to the degree of misconduct required to justify a dismissal for cause, it will not typically apply to terminations due to COVID-19.

Conclusion

The current employment terrain is as uncertain as it is unforgiving.  Before agreeing to any conditions of termination or lay-off, please contact one of our employment and labour law experts and we will help you navigate your way to the best possible resolution of your employment matter.

How We Can Help

The first step in asserting your legal rights is contacting a qualified and experienced employment lawyer. At Vice & Hunter LLP, our employment law team works diligently to secure the maximum entitlements for our clients and would be happy to discuss your legal options.

To learn more or to book an appointment reach out to J.F. Lalonde or call 613-232-5773.