Layoffs in the News – What are the Rules?
With recession in the headlines and daily reports of companies in the tech sector laying off large numbers of employees, many people are wondering what the difference is between a layoff and a termination and what their rights are in either circumstance. Here are some frequently asked questions, answered for non-unionized employees in British Columbia.
My employer told me I have been laid off. What does that mean?
A layoff in most cases is the same thing as being terminated or fired. Once an employer is no longer providing work to be done or paying an employee, employment has ended. Since layoffs are driven by the financial circumstances or strategic decisions of the employer, and not employee misconduct or poor performance, notice or severance pay is owed.
Employers can only lay off an employee without effectively terminating their employment if:
- The employment contract expressly allows for temporary layoffs;
- Layoffs are a well-known and longstanding industry-wide practice (like in logging where work cannot be performed at certain times of the year); or
- The employee agrees to the layoff.
Even if one of these conditions apply, the layoff must be short-term and temporary under the BC Employment Standards Act. Unless one of these conditions exists, then a layoff is the same as a termination of employment.
If I am laid off because my company is having financial trouble, do I still get severance pay?
Yes, in most cases you are still entitled to reasonable advance notice of termination or severance pay. The employer’s financial situation generally does not impact your entitlement to severance pay. Unless there is a bankruptcy or other similar legal proceeding underway, the financial situation of the employer does not impact the requirement to pay employees severance or provide notice.
What if I am part of a large group of employees being laid off?
If 50 or more employees are terminated from the same location within a 2-month period, as a minimum standard, the employer is required to give specific notice, or pay in lieu of notice as set out by the BC Employment Standards Act. The amount of notice depends on how many employees are being laid off but can range from 8 weeks to 16 weeks.
Over and above the Employment Standards Act minimum requirements, employees are often entitled to common law severance. In determining how much severance pay is required, judges will consider availability of alternative employment. In an industry downtown or recession, this may mean that more severance is owed than in a job seekers market.
Do I need to hire a lawyer if I am laid off?
An employment lawyer can assess your severance pay entitlements taking into consideration your contract, legislation, and legal precedents, so you know whether what you have been offered is fair and reasonable. If the offer is not reasonable, our lawyers will build a gameplan with you to negotiate for something fair. In most cases this can be done in a single meeting, for a flat fee. We don’t take a percentage of your severance pay. Contact us at [email protected] or 604-535-7063 for more information.
This blog is not intended to serve as legal advice, and only provides general information.
Every situation must be considered on its own facts. Need legal advice? Contact us by phone at 604 535-7063 or email [email protected].