Can an employer fire half of its employees?

In early November, news broke that Twitter was firing half of its staff. Meta (Facebook’s parent company) recently fired 11,000 employees, around 13% of its staff. Though this might bring concerns about an economic downturn, or the appropriate number of staff needed to run a major social media company, the concern for many Canadian employers and employees is whether such a mass termination is even legal. Unfortunately, due to the lack of information surrounding the Twitter terminations, it is hard to give a definitive answer.

Whether Twitter’s mass termination is legal in Canada depends on the wording of the contract, the length of notice, and if any severance is provided. Clearly, this is a very fact-dependent issue. Twitter Canada employees affected by the mass termination should contact an employment lawyer. However, if there is an issue with notice, a Twitter employee and their employment lawyer may want to explore claiming bad faith in the manner of dismissal. Though bad faith in the manner of dismissal is a blog topic for another day, simply put, a judge will penalize employers who fire employees in an undignified manner. Terminating employees by email, even if it is a mass termination, may be seen as bad faith in the manner of dismissal.

The mass termination rules for Ontario-regulated employers

Since Twitter Canada is likely regulated under Ontario’s employment law regime, let’s look at the provincial rules for mass termination. The legislation in Ontario sets the minimum notice period for termination. Generally, the employer can pay out the notice period, which is called “pay in lieu of notice.” The employer should make it clear in the employment contract when they plan to give the minimum amount of notice. If they do not do so, they may be liable for longer common law notice.

In Ontario, the Employment Standards Act (ESA) sets out special rules that apply when an employer fires 50 or more employees within a four-week period. Under the ESA, when a mass termination occurs, the employer must submit a Form 1 (notice of termination of employment) to the Director of Employment Standards. The employer mut also post a copy of Form 1 in the workplace on the first day that they give notice to their employees. However, notice to the employees subject to the mass termination will not be considered delivered until the Director of Employment Standards receives Form 1.

The amount of notice that employees get when they are part of a mass termination is determined by Termination and Severance of Employment, O Reg 288/01. That piece of regulation makes it so the amount of notice that employees receive is based on the number of employees who have been terminated and is not based on the employees’ length of service. Under this regulation, the employer must give:

• Eight weeks of notice if 50-199 employees are getting terminated
• Twelve weeks of notice if 200-499 employees are getting terminated
• Sixteen weeks of notice if 500 or more employees are getting terminated

Employees who receive notice under the mass termination rules can resign before the given date of termination. However, the employee must give one week of written notice if they have worked for less than two years for the employer or provide two weeks of written notice if they have worked for the employer for over two years.

Ontario does have an exemption for its mass termination rules. The mass termination rules in Ontario do not apply if two factors are met:

1. The number of employees whose employment gets terminated represents less than 10% of the employees who have been employed at the company for the past three months and
2. None of the terminations are caused by the permanent discontinuance of all or part of the employer’s business at the establishment

Based on the publicly available facts, the mass termination at Twitter does not pass the first part of the test.

The group termination rules for federally regulated employers

The mass termination rules are different for federally regulated employers. Notably, the Canada Labour Code (CLC) uses the term “group termination” instead of “mass termination.” Specifically, a group termination is defined as the termination of 50 or more employees working at a single industrial establishment within a four-week period.

When an employer decides to do a group termination, they must provide a written notice to the Head of Compliance and Enforcement at least 16 weeks before the group termination is to take effect. The employer is also required to give that copy of the notice to the Minister of Employment and Social Development, the Canada Employment Insurance Commission, and the employees who will be terminated. In addition to the copy of the notice, employees who are part of the group termination should get the notice that they are entitled to under section 230 of the CLC.

How Suzanne Desrosiers Professional Corporation can help

Our employment lawyers can help an employee or employer who needs to address the issue of mass termination or group termination. Our team can help guide your situation so that a cost-effective solution can be found to the mass termination or group termination. For guidance from one of our employment lawyers, please contact us by calling us at 705-268-6492 or by emailing us at info@sdlawtimmins.com.