Tech industry terminations create an employer’s market

Sunira Chaudhri

Sunira Chaudhri

Toronto Employment Lawyer

On July 26, e-commerce giant Shopify terminated 10% of its workforce, adding about 1,000 workers to the unemployment line.

The Canadian labour shortage is a relic of the pandemic past.

 

In recent weeks, throngs of blue-chip and start-up technology companies are trimming down their workforces in the wake of a looming recession.

 

Amazon recently announced it has shrunk its workforce by 100,000 this year.

 

On July 26, e-commerce giant Shopify terminated 10% of its workforce, adding about 1,000 workers to the unemployment line.

 

Clearco announced the termination of 25% of its workforce (125 employees); Wealthsimple let go of 159 employees in June; Carvana Co, an online auto dealer, terminated 2,500 employees in May; and the cryptocurrency exchange company Coinbase announced the terminations of 18% of staff, which amounts to close to 1,000 employees.

 

This list is only a sampling of the terminations we are seeing across the industry this year.

 

Of particular note is the softer terminology companies and the media are using to describe these terminations. The terms “downsizing,” “shrinking” and “laying off” all mean the same thing. These employees are being permanently terminated and in some cases could be entitled to substantial wrongful dismissal damages, particularly if they are employed in Canada.

 

As employers announce terminations in the media, many are using their press releases to share details of the termination packages being given to employees, and in some cases going so far as to call them “generous.” Companies may be claiming this for public relation and other reasons but that does not make it so. Terminated employees must do their own due diligence when terminated to determine their respective rights and entitlements when terminated.

 

Group terminations can be mind bending. Employees may feel a greater pressure to relent and not challenge their termination offers, to let go and move on for the greater good of the company; to commiserate with their former colleagues and look for greener pastures. Don’t fall for the trap.

 

Employees should take stock of their own careers and futures, especially considering the bleak outlook to reemploy in some industries. There are thousands of employees looking for work now. Employer’s will have their pick. Competition will be fierce. Add to that, terminations will continue.

 

If you have been released from the tech industry, here are some pay and perk elements you may be entitled to:

 

SALARY — Your termination letter may proclaim it’s being generous but it’s prudent to consider how long it may take you to find a similar job and compare that against the offer on salary, often referred to as the notice period.

 

BONUS — If you have worked toward earning a bonus but were terminated before payout day, you still may be entitled to a pro rata portion of the bonus you worked toward. Plus, you could be entitled to your lost bonus earnings over the notice period.

 

STOCK OPTIONS — If you were granted options when you were hired or during your employment, you may be entitled to those options vesting, even on termination. If you think those options could be in the money soon, exercising your options could be a great windfall.

 

VESTED AND NON-VESTED LONG/SHORT-TERM INCENTIVE AND RSU PLANS — If you earn variable compensation by way of LTIPs or STIPs, you may be entitled to the vesting of these plans even after termination. You could also be entitled to the STIP/LTIP you would have earned over the notice period.

 

HEALTH BENEFITS — Often employees can continue to enjoy medical and dental benefits even after termination.

 

Even if your employer does not offer these perks or payments to you on termination, you could still be entitled to them. Before signing a severance package ensure you seek every improvement you can, to weather the recession storm.

 

On to this week’s questions:

 

Q. During the pandemic I was able to work from home. I suffered from alcohol dependance. Flowing from that, I admit that I missed some critical moments at work, including meetings and sometimes missed deadlines. I also missed a pretty important one-on-one with my supervisor. I am thankfully on the road to recovery, but I know I am not in a positive place at work. I know for sure my boss is upset with my performance. I am taking counselling and seeing my doctor and I am worried about losing my job. Any advice would be appreciated?

 

A. Addictions are recognized disabilities under the Human Rights Code. If you are seeking medical treatment as a result of an alcohol dependence or addiction, you are likely entitled to accommodation at your workplace as a result of the disability. You may consider accessing short-term disability benefits and/or provide a medical note to your HR department with respect to any restrictions or accommodations you may need while receiving treatment for the disability. If you don’t provide any medical information to your employer, you may jeopardize your role. Employees are required to participate in the accommodation process and that starts with you working with your medical team to provide your employer with at least some general information about the medical accommodation you may need while you are seeking treatment.

 

Q. I work in an HR team and we have had to restructure a lot of our departments, which has led to group terminations at our company. Without getting into specifics, some employees on their termination have raised complaints that they never previously brought to HR while employed. Is HR required to investigate the complaints of employees after they have been terminated?

 

A. It is always a good practice to investigate complaints, especially if they relate to current employees. If a complaint was not brought to HR, it is important to determine why. If there is an internal obstacle where employees feel as though they can’t bring complaints to HR, this should be addressed. An investigation may also be helpful in the event that litigation ensues. It is important to obtain legal advice with respect to any investigation that may be launched, especially if the allegations are sensitive in nature.

 

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

 

The content of this article is general information only and is not legal advice.

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