Is Canada headed to a fall full of lay-offs?

Sunira Chaudhri

Sunira Chaudhri

Toronto Employment Lawyer

Some experts believe it's just a matter of time until we see mass terminations of Canadian employees.

You would think the summer is sleepy in the world of employment, but don’t let the lazy days of the season fool you.


While the world slows down for school vacations and family getaways, employers lay low, reorganize, and pivot; laying careful plans to lower costs, and sometimes headcount.


According to Forbes 2023 Layoff Tracker, 194,000 employees have already been laid off in the U.S. this year alone, including 10,000 this year at Facebook and Instagram’s parent company Meta.


In Canada, however, the shoe is yet to drop.


According to a recent article in the a Globe and Mail, mass layoffs have been used more sparingly in the Canadian marketplace. Instead, some organizations, like the Royal Bank of Canada, have opted to slow down or freeze hiring all together until the costs of frenzied post pandemic hiring come down naturally.


Still, some experts see mass terminations in the offing for Canadian employees. It’s just a matter of time.


There are 5 things employers should keep in mind when contemplating terminations this fall:


1. If replacing employees with A.I., proceed carefully – Employees deemed redundant by new technology may need longer to retrain and obtain a similar job with similar pay. This could not only require employers to pay more on termination but could also leave a lasting, negative impression with your current workforce.


2. Utilize working notice periods where possible – Employers can give notice of termination and require employees to work for a period of time subsequent to being terminated. Employers rarely consider this option but it can be very effective and cost efficient. This tool should be employed carefully, however, with the most trusted employees.


3. Offer continuation of benefits for at least the statutory notice period – Often employers cancel employee benefits on the day of termination. In several provinces (including Ontario) this is illegal. Ensure all perks and benefits are continued post termination for the time required by the relevant legislation (like the Employment Standards Act for Ontario employers).


4. Don’t forget the paperwork – Employers are required to calculate vacation pay and termination payments, issue a record of employment and final paystub following an employee termination. Delaying any of these steps could create needless liability. Create an “off boarding process” to understand and meet your obligations when terminating employees.


5. Get a release, even if it costs more – Offering an employee too little on termination (i.e. only what the legislation requires) leaves an employer open to litigation or complaints for up to two years (or in some cases longer) post termination. Offering an additional gratuitous amount on termination to have an employee sign a release will give you and your terminated employee closure and financial certainty.


As Canada may be on the precipice of even higher unemployment rates this fall, employers should proceed judiciously and with great care to avoid liability later.


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

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