The “Bottom Line” of Restructuring
In today’s shifting economy, restructuring is common amongst large and small employers. Restructuring may involve shifting employees within a company, but more commonly it also involves the elimination of various sectors of an employer.
For an employee, the stress of a restructuring can be lessened by understanding the employer’s obligations.
Notice or Pay
If an employee is fired as part of a restructuring, she may be entitled to notice of termination, termination pay, severance pay or additional pay in lieu of notice. How much notice or pay can typically be determined through three questions: Is there an employment contract with a termination clause? What are the employee’s right under the Employment Standards Act? Does the employee have any right to additional notice or pay under the common law?
If the employee has an enforceable contract with a termination clause, that will determine what pay or notice the employee receives. Otherwise, the employee may be able to receive as much as one month per year of service worked for the employer. This will depend on the employee’s age, education, experience, and length of service. It may also be affected if the employee finds another job.
The assessment above is different if the restructuring involves a mass termination. If more than 50 employees are laid off or terminated, the employee should receive at least eight weeks’ notice or pay in lieu – even if her contract states she should receive less.
If more than 200, or more than 500, employees are terminated at the same time the minimum notice requirements increase respectively.
Josh has worked for his employer for two years and his contract states that he will receive two weeks’ notice per year of service. His company restructures and terminates 75 employees. If Josh was the only employee terminated, he would only receive four weeks’ notice or pay. However, in this mass termination, he will receive at least eight weeks’.
Change in Job
It is not uncommon for some employees to remain employed during restructuring, but to be offered different compensation or different roles. If the change is significant, this may result in a constructive dismissal. For more information about what constitutes a constructive dismissal, see here.
If you think that your employer will be restructuring, or you have been laid-off or terminated, feel free to speak with one of our lawyers who has expertise in this area, at [email protected] or 647-204-8107.
The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.
Tags: Barrie Employment Lawyer Departing Employees Employee Rights Employment Contract Employment Law Employment Law Toronto Employment Lawyer Barrie Employment Lawyer Toronto Employment Lawyers Barrie Employment Lawyers Toronto Employment Standards MacLeod Law Firm Nicole Simes Reasonable Notice Of Resignation Reasonable Notice of Termination Restructuring Severance Package Severance Packages Severance Pay Termination Termination Clause Termination Pay Toronto Employment Lawyer Wrongful Dismissal
Justice for Unionized Employees
Unionized employees often seek our advice regarding human rights issues in their workplace. Sometimes this is because human rights violations have occurred and the union is not assisting them. Other times, the union itself may be part of the problem. The rights of...
Employee Entitlements Upon Termination
Termination is a stressful experience for any employee. An employee who has been fired needs to understand what their employer owes them, and what their employer is offering them. When employers do not make this clear, additional damages could be due to the employee....
Notice of Termination: Appeal Court Weighs in
When terminated, an employee should generally receive reasonable notice of termination or pay instead of notice. This is unless the employee has signed a contract that contains an enforceable termination clause (which we’ve written about here). The calculation of the...