Recent uncertainty in the economy caused by a number of factors – pandemic spending, inflation, supply chain constraints, geopolitical insecurity – are starting to impact the workforce locally, nationally and globally. Layoffs originally started in the tech industry and have spread across business sectors. Predominantly, entry level positions are usually the first to be impacted, and many students and recent graduates fill these roles.
Tanya Walker (BCom ‘02), Lawyer and Managing Director at Walker Law and her colleague Jordan Koenig, Senior Associate at Walker Law provide insight on the legal rights of employees, what to do if you are laid off, and how you can protect yourself when you secure a new job.
An employer does not need to have a reason to terminate an employee
“One thing that many people are not aware of is that an employer does not need to have a reason to terminate an employee,” says Tanya Walker.
If an employee is terminated without a reason, the employer owes the employee notice, or payment in lieu of notice, of the termination. Walker says it is important to note that an employee cannot be terminated for any grounds that are discriminatory and are protected by the Human Rights Code including religion, race, gender identity and disability status.
Employees are protected under the law
Walker says one of the most important things employees need to be aware of is that there are separate entitlements and protections available to them under the Statutory Law. In Ontario, this is called the Employment Standards Act (ESA).
Employees that have a signed contract where the termination provisions typically fall under the ESA. For example, as a basic proposition, if an employee works with a company for one year, they are entitled to one week of notice for that year worked.
For employees without a signed contract, Walker explains their entitlements could be negotiated under a Common Law notice period instead of the Employment Standards Act.
Under the Common Law, judges look at the level of employment the person has had, their age, and how long they worked there. Employees could get two to four weeks per month for each year they have worked there, which extends the notice period and how much pay an employee is entitled to.
“Whether or not an employee’s entitled to a Common Law notice, or a Statutory Notice is determined by what is written in their contract,” says Walker.
Review your employment contract
“There’s no legal requirement for a person to have a contract,” says Walker. “We believe it’s best practice for an employer and for the employee to have a contract.”
She says it’s important to note that if any part of the agreement between an employer and an employee to terminate the employment contract does not comply with the Employment Standards Act, then all of the termination clauses will be void and unenforceable.
What should you do if you are laid off?
Review the termination package carefully
“If you are laid off or fired without cause, you’ll normally be offered a termination package, or at least you should be, and it normally sets out how much notice or pay in lieu the company will provide you,” says Jordan Koenig. He recommends reviewing the termination package very carefully, ask for time to get legal advice, and if you feel you should, seek legal advice.
Do not sign immediately
“Just don’t sign anything immediately,” stresses Koenig. “If the company won’t give you time to seek legal advice, don’t feel pressured to sign on the dotted line immediately. You should also ask for a copy of your employment contract so you can be sure, or have legal counsel ensure, that the termination package is consistent with what you would be entitled to under your actual contract.” He says if you discover the termination package does not provide what you should be entitled to, you can negotiate the terms of the termination package.
Take advantage of benefits before they expire
Koenig points out that if you are terminated without cause and are entitled to a notice period, “all of the benefits that you would normally receive during your employment are supposed to be provided to you for the entirety of that notice period so it’s a good idea to take advantage of these benefits during the notice period in case you don’t immediately obtain another job with similar benefits, or in case you’re unable to pay for your own benefits package.” If your benefits package included new glasses or dental work, arrange to have that done during the notice period before the benefits plan expires.
Before beginning a new position, there are a few things to keep in mind:
Review employment contract
“When you start a new job, you should make sure to review the employment contract carefully, and possibly consult an employment lawyer before signing,” says Walker. “Many years ago, when I was a new grad from McMaster, I would be excited to have the offer, and I would just sign on the dotted line without necessarily reviewing the contract carefully. But now practicing law for 16 years I would recommend that you take some time and review it.
Although you’re excited about the job, make sure you really understand the arrangement that you’re getting into.”
Legal entitlements begin after probation period
Under the Employment Standards Act employees typically have a three-month probation period where new employees are not entitled to any benefits or notice if their employment ends within the first three months.
Under the ESA employees are typically entitled to:
- One week’s notice per year of employment, up to a maximum of eight years (for service over two years)
Review employee handbook and company policies
Most businesses have an employee handbook that sets out the company policies and what’s expected of employees. Walker recommends getting a copy before you start your job so you can review it – especially the code of conduct section.
She says there may be benefits that you’re not even aware of, including training or counselling. In addition, she says there may also be internal policies set out for complaints dealing with harassment or communicating with human resources. “Also if a handbook says there are certain processes, and the company doesn’t follow it, you may want to consider other recourse so that it is followed.”
Walker also stresses the importance of being aware if your company has a social media code of conduct. If your company has a policy that speaks about what you can and cannot post on social media, and you post something that is not favourable, “that might result in you being reprimanded or losing your job, so you want to make sure you’re very careful about following the code of conduct and what’s documented because it might be difficult for you to say ‘I didn’t know’ afterwards.” She says if you don’t want your employer to see what you post online, consider making your social media channels closed or private.
Avoid personal use of work equipment
“If you have an iPhone that’s provided to you or any type of phone, laptop or work computer, and you’re using it for personal activities, your employer may be monitoring it,” says Walker. Work equipment is not your own personal equipment, so Walker suggests separating communication between your personal and professional devices.
Build connections at work
“With entry level positions, when there are layoffs, employers seem to let go of the weakest links first,” explains Walker. For example, if a company has 20 new grads, and needs to lay off 10, they will probably look for the 10 weakest links first. “You want to make sure you’re not seen as one of them,” says Walker. “You may want to consider as a new grad trying to go into the physical workspace, even if it’s not required, so you can build relationships with people.”
She recognizes it may be challenging with people working from home or in a hybrid model, but by being around colleagues in-person you can make connections with coworkers, and staff in the office can see the calibre of work you do. “
That’s something you may want to consider – that investment of time to build relationships and to be able to grow in your career.”
Walker also suggests asking for a mentor to support your career journey and entry into the workforce. “When I was at McMaster, I participated in the 16th month internship program after third year. Celestica assigned a mentor to me, and I thought to myself, ‘I don’t need one, I’m in my third year, I know everything about business’. I knew nothing about business from the practical perspective, and my mentor was invaluable to me.”
Understand your legal employment rights
“If you don’t assert your rights as an employee, it could be viewed as having waived them somewhere down the line,” explains Koenig. “If you don’t know what your legal rights are until it’s too late, you might not be able to enforce them if you’ve waited too long.”
Regardless of the economic landscape, students, recent grads and employees should be aware of their legal rights, understand the legal contracts they sign, and be aware of corporate policies they are expected to follow.
“It’s important to educate yourself on your legal rights, because you don’t want to do anything inadvertently that could cause you to lose your job,” says Koenig. “Quite simply, the more you know about your legal rights and responsibilities the better you’ll be able to protect yourself.”
This article is for informational purposes only and is not intended to provide legal advice.