“Mass termination” or “mass layoff” is when 50 or more employees are terminated at an employer’s establishment within a four-week period. Under the Employment Standards Act (ESA), special rules for notice of termination apply when an employee has been terminated as part of a mass termination.
Under the ESA, employees who have been terminated may be entitled to notice of termination and severance pay. “Notice of termination” refers to the amount of notice your employer is required to give you before your employment is terminated. Employers can choose to pay you instead of giving you advance notice, and this is called “termination pay”. “Severance pay” is an additional entitlement for long-term employees (i.e. those who have worked for an employer for five years or more).
If you have been laid off in a mass termination, you may be entitled to damages for wrongful dismissal under the common law. Your rights under the ESA and the common law are discussed below.
Your rights under the Employment Standards Act
If you have been dismissed in a mass termination, there are special rules relating to notice of termination. Your right to severance pay remains the same. Allow me to explain:
Notice of Termination / Termination Pay
If you have been working for the same employer for at least three months and you are terminated (not in the context of a mass layoff), your notice of termination depends on the amount of time you worked for your employer:
Period of employment
Less than one year
1 year but less than 3 years
3 years but less than 4 years
4 years but less than 5 years
5 years but less than 6 years
6 years but less than 7 years
7 years but less than 8 years
8 years or more
Notice required
1 week
2 weeks
3 weeks
4 weeks
5 weeks
6 weeks
7 weeks
8 weeks
However, if you are terminated as part of a mass termination, the notice period depends on the number of employees who have been laid off:
Number of employees terminated
50 – 199 employees
200- 499 employees
500+ employees
Notice required
8 weeks
12 weeks
16 weeks
It is not uncommon for employers to provide employees with pay in lieu of notice of termination (termination pay).
Severance Pay
The rules relating to severance pay are applicable regardless of whether you have been laid off in a mass termination.
Under the ESA, you will qualify for severance pay if: a) you have worked for your employer for 5+ years (whether continuous or not) and b) your employer has a payroll of at least $2.5 million or has terminated 50+ employees in a six-month period because all or part of the business has permanently closed.
If you qualify for severance pay under the ESA, you are entitled to one week of severance per year of employment, up to a maximum of 26 weeks.
How to calculate your entitlement in a mass layoff
Assuming your employer provides you with pay in lieu of notice of termination, you will add the notice of termination to your severance pay to calculate the total amount owed to you.
For instance, if you worked for your employer for ten years and were terminated in a mass termination of 65 people, your calculation would be the following: eight weeks of termination pay plus ten weeks of severance pay, for a total of 18 weeks of pay at your regular salary.
Your rights under the common law
Unless your contract of employment specifies that your rights upon termination are limited to the basic standards set out in the Employment Standards Act (and even then, these clauses have sometimes been struck down by courts), you may be entitled to damages for wrongful dismissal. “Wrongful dismissal” refers to when an employee has been terminated and not given reasonable notice. Despite the name, it does not mean that there was a good reason for your termination; rather what was wrongful about it was that you were not given proper notice.
The calculation of a reasonable notice period under the common law is more generous than under the ESA. The amount of reasonable notice required depends on certain factors that may impact your ability to find an equivalent job, such as the character of employment (your role and responsibilities), your length of service, your age and the availability of similar employment, having regard to your experience, training and qualifications. This calculation often results in an amount of notice owing that is much higher than the minimum entitlements under the ESA.
There is no magic formula under the common law for how much money you could receive in lieu of reasonable notice. The calculation of common law notice is fact-specific and will depend on the circumstances of each case. It is also currently unclear how the economic uncertainty related to COVID-19 may factor into the calculation of common law notice. There are also exceptions and exemptions to the mass termination rules in the ESA.
If your employment has been terminated as part of a mass termination, you should consult a lawyer. Natai Shelsen represents employees who have been laid off in a mass termination. She would be happy to speak with you about your rights.