29 May Mass Termination Ontario and Remote Workers
The Covid Pandemic has affected every aspect of our lives, including how we socialize and interact with others.
The Pandemic also affected how and where we work, including the fact that many jobs in various industries have become remote, and as many employees see the benefits of working from home and avoiding long commutes to work in-office, this will more than likely be the norm for the foreseeable future.
However, the Pandemic also affected the market supporting such remote employment resulting in more and more layoffs and terminations. This includes mass terminations by larger corporations, as has been evident in various news reports over the last year, notable examples being Facebook/Meta and Microsoft, among others.
A dichotomy arises in the context of mass terminations and remote employment, as current legislation does not address the status of remote workers.
Pursuant to the Employment Standards Act (the “ESA”), employers are required to provide, and employees are entitled to receive potentially enhanced notice of termination or pay in lieu thereof when faced with a mass termination. A mass termination is generally defined as the employment of 50 or more employees at an employer’s “establishment” being terminated within a four (4) week period.
If a mass termination Ontario takes place, employers may be required to provide, and employees may be entitled to receive notice or payment in lieu of eight (8) to sixteen (16) weeks, depending on the number of employees impacted by the mass termination Ontario. Specifically, if:
- 50 to 199 employees are terminated, then eight (8) weeks of notice or payment in lieu are required to be provided to the employees by their employers;
- 200 to 499 employees are terminated, then twelve (12) weeks of notice or payment in lieu are required to be provided to the employees by their employers; and
- 500 or more employees are terminated, then sixteen (16) weeks of notice or payment in lieu are required to be provided to the employees by their employers.
The above-noted notice or payment in lieu does not include potential severance pay employers may be required to provide, and employees may be entitled to receive under the ESA over and above these eight (8) to sixteen (16) weeks.
However, the issue facing a remote employment scenario is the fact that the ESA refers to an employer’s “establishment” (which is currently defined as a “location at which the employer carries on business”) in determining whether an employer is required to provide, and an employee is entitled to receive notice or payment in lieu in a mass termination Ontario scenario.
As the ESA currently stands, remote employees who work solely from home are not entitled to receive it, and employers are not required to provide the same notice or payment in lieu under the ESA to them as to those employees who work in the office.
However, on March 13, 2023, the Ontario government proposed changes to the ESA, by way of ‘Bill 79, Working for Workers Act, 2023’ (“Bill 79”) that may require employers to provide, and entitle remote employees to receive the same notice or payment in lieu entitlements as those employees who work in office.
Bill 79 proposes to broaden the definition of “establishment” to include “a private residence of the employer’s employee if the employee performs work in the private residence and the employee does not perform work at any other location where the employer carries on business”.
While Bill 79 has not yet received Royal Assent, if passed, these proposed changes would broaden the ESA‘s definition of “establishment” to include employees’ home offices. Such a change may require that remote employees be included when an employer calculates the number of impacted employees in a mass termination Ontario scenario; this could potentially increase the notice or payment in lieu requirements of the employer to said impacted employees.
The proposed amendments to the mass termination Ontario provisions are to come into effect on the later of July 1, 2023, and the day Bill 79 receives Royal Assent.
One thing to keep in mind, as always, is that the ESA sets out minimum requirements and entitlements for employers and employees (including remote employees in a mass termination Ontario scenario once Bill 79 becomes law); the common lay may increase such potential requirements and entitlements, but that remains to be discussed another day.
We here at FIJ will continue to monitor the progress of Bill 79 and report on further developments, but are always available if you have any questions about Bill 79, the ESA, or common law as it may relate to your employment situation.
Originally posted on May 28, 2023
Raffaele Sparano’s primary area of practice is in commercial litigation which encompasses numerous areas of law, including employment, debtor/creditor, bankruptcy, contractual and commercial breaches, shareholder and partner disputes, intellectual property, tort and negligence, construction liens, franchise, estates and residential and commercial tenancies.