Will all your employees be needed when businesses reopen? If not, the legal framework for collective dismissals should be considered
In Quebec, as elsewhere, the COVID-19 crisis is profoundly disrupting many workplaces. The measures taken to limit the spread of the virus have shut down many activities and had a significant impact on businesses. Even some businesses that were able to continue operating because they were deemed essential have been forced to lay off workers because of the downturn in the overall economy. In Quebec, following the declaration of a health emergency on March 13, 2020,1 the province’s unemployment rate grew by 3.6% to reach 8.1% in March 2020.2 In April 2020, this rate jumped to 17% – the highest unemployment rate among Canadian provinces and the highest rate recorded in Quebec since 1976.3
In this context, and given that the reopening of the economy will be gradual and some businesses will feel the financial impact of this pandemic for several months,4 it is likely that over the next few months, many of the temporary layoffs initially expected to last less than 6 months will eventually exceed this timeframe or turn into permanent job losses. In Quebec, because the termination of employment (or layoff of more than 6 months) of 10 or more employees triggers, under certain conditions, the application of the collective dismissal regime provided in the Act respecting labour standards (the Act), it is essential for employers in the current circumstances to have a solid grasp of the concepts of this legal framework.
Below is a set of questions to consider in the event you find yourself in one of the following situations or anticipate being in one at some point in the near future:
- you had planned temporary layoffs of less than 6 months, but under the circumstances, these layoffs may exceed this timeframe;
- your employees are currently on temporary layoff, and you now realize that you will have to terminate some of these jobs;
- you implemented temporary layoffs and are about to call employees back to work;
- you must lay off or dismiss at least 10 of your employees.
A temporary layoff is a period during which the employer temporarily stops providing work to the employee. The employment relationship is maintained during this period, but the employee does not, in principle, receive any remuneration.
It is important to note that, in Quebec5, when a temporary layoff reaches 6 months, this can trigger a series of obligations for the employer, particularly with respect to collective dismissal.
The Act defines a collective dismissal as a termination of employment by the employer, including a layoff of 6 months or more, involving no fewer than 10 employees of the same establishment over the course of 2 consecutive months.6
The Act does not define the concept of establishment. Generally, an establishment is a physical location where work is performed. However, in the context of a collective dismissal, the establishment is not necessarily equivalent to a building or street address. In other words, several buildings could together be considered as a single establishment for the purpose of defining a collective dismissal. Each situation should be analyzed carefully.
The Act specifies that certain employees are not considered to be affected by collective dismissals7,such as:
- an employee with less than 3 months of uninterrupted service;
- an employee whose fixed-term contract expires;
- an employee who has committed a serious fault;
- a construction worker governed by the Act R-20 (Act respecting labour relations, vocational training and workforce management in the construction industry);
- senior managerial personnel.8
Furthermore, the Act stipulates that the rules governing collective dismissal do not apply in certain situations, such as the layoff of employees for a period that is indeterminate but is, in fact, less than 6 months in duration.9
For these reasons, employers must determine the precise number of employees affected by a collective dismissal on a case-by-case basis since this number will have an impact on the on the length of the notice period to be given, if any. Some collective agreements set out additional requirements.
Before proceeding with a collective dismissal for technological or economic reasons, the employer must give notice to the Minister of Employment and Social Solidarity10 within the following minimum periods:11
Number of employees affected and deadline for submitting the notice:
- 10-99: 8 weeks
- 100-299: 12 weeks
- 300 or more: 16 weeks
A copy of the notice of collective dismissal must be sent to the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) and, where applicable, to the certified association representing the employees affected by the collective dismissal. Furthermore, the notice must be posted in a conspicuous and readily accessible place in the establishment concerned.12
For the collective dismissal notice to be valid, it must contain the following information:13
- name and address of the employer or establishment concerned;
- sector of activity;
- names and addresses of employee associations, if any;
- reason for the collective dismissal;
- date anticipated for the collective dismissal;
- number of employees likely to be affected by the collective dismissal.
Provided that certain conditions are met, the notice may be updated, particularly when the expected date of the collective dismissal or the number of potentially affected employees changes. This allows the employer to adjust to evolving circumstances without having to restart the entire process.
During the notice period, the employer may not modify an employee’s salary or, if applicable, the group insurance and pension plans recognized in the workplace without the written consent of that employee or the certified association representing that employee, if such an association exists.14
Moreover, it is important to note that submitting a notice of collective dismissal to the Minister does not exempt the employer from providing each affected employee with an individual notice of termination.15
Where the employer fails to give notice of collective dismissal or gives insufficient notice, the employer must pay each dismissed employee an indemnity equal to the employee’s regular wages (excluding overtime) for the total period or the remainder of the period within which the employer was required to give notice.16
The employer must pay the collective dismissal indemnity:
- at the time of termination, or
- at the end of a period of 6 months after a layoff that is (i) of an indefinite duration or (ii) expected to last less than six months but exceeds that period.17
It should be noted that the collective dismissal indemnity and an individual termination indemnity are not cumulative.18 The employer must only pay the employee the greater of the two indemnity amounts to which the employee is entitled.19
In a case of force majeure or when an unforeseen event prevents the employer from meeting the deadlines for notices of collective dismissal set out in the Act, the employer’s obligations are reduced.
In these two cases:
- the employer must give the Minister a notice of collective dismissal as soon as the employer is in a position to do so;20 and
- the employer is relieved of the obligation to pay the collective dismissal indemnity, even if, in principle, the notice period is insufficient.21
In light of the unprecedented crisis caused by COVID-19, some employers will likely consider invoking force majeure or the unforeseen event in the context of a collective dismissal. In this regard, although it is conceivable that the current pandemic and the sudden interruption of activities caused by the measures implemented to contain COVID-19 could be characterized as force majeure or unforeseen events within the meaning of the relevant provisions of the Act, this remains to be confirmed by the courts, once they are called upon to consider the matter. That being said, it should be noted that the outcome of these issues will also depend on the evidence presented in each case regarding the causal link between the current crisis and the collective dismissal.
A reclassification assistance committee does not have to be created if the collective dismissal affects fewer than 50 employees.22
A joint reclassification assistance committee is only required, at the request of the Minister, when a collective dismissal affects 50 or more employees.23 The purpose of this committee includes:
- evaluating the situation and needs of the employees affected by the collective dismissal;
- developing a reclassification plan to facilitate the maintenance or re-entry of those employees on the labour market; and
- overseeing the implementation of the program.24
The employer must make a financial contribution to the operating costs of the committee and the reclassification activities themselves, up to an amount agreed upon by the employer and the Minister or, failing any agreement, an amount determined by regulation.25
It is worth noting that in certain circumstances, the employer may request to be exempted, in whole or in part, from the application of the provisions of the Act regarding the reclassification assistance committee.26 The Minister may (after allowing the interested parties the opportunity to present observations) exempt an employer from these provisions if, in the establishment affected by the collective dismissal, the employer offers the affected employees reclassification assistance measures that are equivalent to, or surpass those provided for in the relevant provisions of the Act.27
In view of the gradual reopening of specific sectors of the economy and in this time of uncertainty, employers should consider potential future avenues for their organizations and develop action plans that addresses any legal considerations, including obligations arising from collective dismissal decisions.
If you have any questions about your obligations concerning collective dismissals or for strategic advice on calling some employees back to work or extending temporary layoffs, we invite you to contact the members of our Labour and Employment Law team, who regularly advise many organizations on best practices for managing collective dismissals.
1 Order 177-2020.
4 We refer you to the following article on the gradual reopening of several economic sectors announced on April 28, 2020: https://langlois.ca/covid-19-april-28-2020-update-gradual-reopening-certain-economic-sectors.
5 Please note that the present article deals with employers’ obligations under provincial jurisdiction as defined by the Act respecting labour standards. The rules for federally regulated employers differ and are not covered in the present article.
6 Section 84.0.1 of the Act.
7 Section 84.0.2 of the Act.
8 This is not an exhaustive list. See Sections 84.0.2 and 3 of the Act.
9 Section 84.0.3 of the Act.
10 The notice must be sent by mail to the Ministère de l’Emploi et de la Solidarité sociale, Direction générale des opérations d’Emploi-Québec; the notice takes effect as of the date it is mailed. See: Section 35.0.1 of the Regulation respecting labour standards.
11 Section 84.0.4 para. 1 of the Act.
12 Section 84.0.6 of the Act.
13 Section 84.0.7 of the Act and 35.0.2 of the Regulation respecting labour standards.
14 Section 84.0.8 of the Act.
15 Sections 84.0.4(2) and 82 of the Act.
16 Section 84.0.13 para. 1 of the Act. Moreover, in case of default, the employer is also subject, in principle, to a fine of $1,500 per week (or part of a week). See Section 141.1 of the Act.
17 Section 84.0.13 para. 2 of the Act.
18 i.e. the indemnity provided for in Section 83 of the Act.
19 Section 84.0.14 of the Act.
20 Section 84.0.5 of the Act.
21 Section 84.0.13 para. 3 of the Act.
22 Section 84.0.15 of the Act.
23 Section 84.0.9 of the Act.
24 Section 84.0.10 of the Act.
25 Section 84.0.11 of the Act.
26 Sections 84.0.9 to 84.0.11 of the Act. See section 84.0.12 of the Act.
27 Section 84.0.12 of the Act.