Legal Considerations for Terminations and Restructurings in the Canadian Labour Market

The Canadian labour market remains relatively tight due to low unemployment. It has not been spared, however, from a rise in inflation that has also affected many other economies. Concerns about a potential recession remain.

Restructuring a workforce is often a difficult but necessary part of adapting to a slowing economy. Absent careful planning at the frontend, employers can sometimes find themselves confronted with a potential claim for “wrongful dismissal” by disgruntled former employees. Importantly, employers are entitled to dismiss any non-unionized employee at any time for any reason – no justification or business case is required. Only narrow exceptions, such as discriminatory dismissals, interfere with an employer’s right to determine its workforce. The “wrongful” in a wrongful dismissal claim refers only to the amount of notice (or pay provided to the employee in lieu thereof) that was provided to the employee – not the reason for the dismissal. Employers can mitigate against the risk successful wrongful dismissal claims by ensuring that employment agreements, as well as the process of termination itself, are carefully crafted and implemented.

Click here to read the full article.