What if I am part of a mass layoff and my company files for bankruptcy?
One concern with mass terminations is the potential for a company to be having financial difficulty and the potential for them to go bankrupt. While bankruptcy doesn’t impact the amount of notice you’re entitled to, it certainly impacts your ability to collect, so it’s always important to get fast legal advice.
What should I expect if I am involved in a mass layoff?
When an employer is terminating an employee there should always be a termination letter. That termination letter should start with actually confirming that there is a termination in clear words. The termination letter should be very clear at the onset that the employee is being terminated.
While there is no legal obligation to provide the employee a specific reason for their termination, in the event the termination is for cause, there should be a reason included in the termination letter.
After confirming the employee has been terminated, the letter should go into whether the employees being offered notice, how much that notice is, whether the notice is working notice or payment in lieu of notice. If there’s an employment contract that’s impacting that notice. that employment contract should also be referenced. It is important that the termination letter references an employment contract, particularly if it impacts the quantum of notice.
The termination letter should contain information about benefits, particularly the benefits should continue for at least the statutory notice period but consider extending them for the entire notice period if that notice period is longer. The letter should also confirm the employees right to convert some of those benefits and provide the contact information or direct them to the insurance company where they can do that.
The termination letter should deal with logistics, the termination letter should deal with return of company property, the letter should confirm who the employee should talk to in the event they have any questions regarding the termination.
Generally, it is best practice to always include a full and final release attached to the termination letter. In order for an employee to sign a full and final release, they have to be offered something in excess of both the statutory minimums and whatever their contract says.
A full and final release is a legal document that waives the employees right to pursue the employer. The decision to provide an employee anything in excess of what the Employment Standards Act says should be done by consulting a lawyer first.
It’s also important to include a full and final release if you are going to be providing them something in excess of the Employment Standards Act and what’s in their contract. It is always important for an employment lawyer to look over a termination letter or draft a termination letter and help you with logistics.
Samantha Lucifora is an Employment Laywer at Monkhouse Law. Monkhouse Law is an employment law firm located in Toronto focusing on employees’ issues.
For more information, please contact Monkhouse Law Employment Lawyers at 416-907-9249 or fill out this quick form. We offer a free 30-minute phone consultation.