A class action is a type of lawsuit where the plaintiff is a group of individuals with a common complaint against the defendant.
There can be hundreds or even thousands of plaintiffs. Class actions are special in that the plaintiff group has be certified by the courts before the lawsuit can continue. Among other requirements, the plaintiff must demonstrate that there is a common issue to litigate and that a class proceeding would be the preferable procedure for resolving that common issue. Class actions have a policy objective of access to justice and judicial economy. Class actions have now been permitted in employment law cases. Class actions have been made for overtime, holiday pay, vacation and sometimes for wrongful dismissal. In recent developments, class actions have recently been launched by workers against their former employer with respect to the mishandling of “mass terminations”. See Dillon v. Novi Canadian ltd. (1999), 45 C.C.E.L. (2d) 23 (Ont. S.C.J.). Many large organizations will feel the need to restructure their operations, sometimes terminating large groups of employees to reach this goal. The Employment Standards Act has special rules when it comes to “mass terminations”. In Ontario, a mass termination is when 50 or more employees are terminated within a four-week period. Employers who are planning to take this step must complete and submit a Form 1 (Notice of Termination of Employment) to the Ministry of Labour’s Director of Employment Standards, who will respond with a letter of acknowledgement. The employer must also provide the employees with individual notices of termination and they must post a copy of the Form 1 on the first day of the notice period.
As for notice, an employee’s notice is not determined by the length of their employment. Instead, the amount of notice is based on the number of employees who were terminated. If 50 to 199 employees were terminated, they each receive eight weeks’ notice. If 200 – 499 employees were terminated, they each receive 12 weeks’ notice. If 500 plus employees were terminated, they each receive 16 weeks’ notice. There are exceptions to these special mass-termination notice rules such as if the total number of employees terminated is less than 10% of all employees employed for at least three months or if none of the terminations are caused by the permanent closure of the employer’s business at the establishment. Please note that the above information does not constitute legal advice. It is general information about the law. If you require legal advice with an employment issue, please contact the experts at Ball Professional Corporation.
Mass terminations in Toronto – what is it and how can we help?
What are Mass Terminations?
In Ontario, employers owe non-unionized employees more severance pay if they are let go as part of a mass termination. The minimum severance entitlements for a mass termination are greater than the entitlements a dismissed individual has in a regular dismissal (non-mass termination).
A mass termination is defined in the Employment Standards Act (ESA) as the termination of 50 or more employees at one workplace over a four-week period.
What are the Employer Obligations in Mass Terminations?
An employer has different obligations in a mass termination situation depending on how many employees are dismissed. The statutory minimum notice period for a mass termination is:
- 8 weeks’ notice or pay in lieu if 50 – 199 employees are terminated
- 12 weeks’ notice or pay in lieu if 200 – 499 employees are terminated
- 16 weeks’ notice or pay in lieu if 500 or more employees are terminated
How Our Lawyer Can Help Those Affected by Mass Terminations in Toronto
It is wise to speak with a lawyer prior to accepting the severance offer from your employer. While a mass termination event can be scary, the employer cannot force you to sign the severance letter.
Severance letters may include a termination clause that tries to limit the amount of severance you can receive and/or non-compete clauses that prevent you from finding work elsewhere.
These are things worthy of speaking with a lawyer. You have two years to pursue your severance entitlements from the date of the termination. There are other factors that may increase your severance entitlements, including tough economic conditions in your industry, or a full economic recession. The harder it is for you to find new employment, the greater the compensation might be.
Canadian Employment Law
Mr. Ball is author of the authoritative and definitive text Canadian Employment Law - published by Canada Law Book (a division of Thomson Reuters). The text is used and cited by lawyers, law schools and judges across Canada.
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