Discharge? Dismissal ? the employee’s Status after Covid-19
4 May 2020
Me Patricia Chamoun
Legal and business advice
Since the start of the COVID-19 pandemic, we have received many questions from companies who must make heartbreaking decisions about keeping their staff employed. Some of them are experiencing serious financial difficulties and others are on the verge of bankruptcy. With the government’s recent announcement of the gradual resumption of activities by several businesses and industries, the employer will have to consider the status of its employees post COVID-19.
How to find your way around, while respecting everyone’s rights and responsibilities?
We have put together for you the most frequently asked questions from our entrepreneur clients. We respond to it considering the Act respecting labor standards (“Act”) and the case law *.
Written in collaboration with Me Cristelle Sary.
What is the difference between dismissal, temporary layoff, and discharge?
DISMISSAL: The employer permanently breaks the employment bond with his employee for reasons such as financial difficulties, technological innovations, or job mergers.
Can an employer justify the dismissal of an employee in the current context of COVID-19? It is not all black or white. An assessment must be made on a case-by-case basis according to each situation. However, if the company is not able to continue its activities during the current period of closure, and that is able to demonstrate that its activities are significantly reduced, the dismissal can possibly be justified.
TEMPORARY LAYOFF: The employer suspends temporarily the employment contract with the employee, he can be called back to work. He retains his employment bond for the duration of the layoff and his contractual relationship is maintained. There are certain conditions on the duration of the layoff, otherwise a layoff can be deemed as a dismissal or a discharge.
Currently, this is the measure that seems to be the most used by employers, especially in this context of economic uncertainty where it is difficult to establish the date of return to regular activities of the company. A temporary layoff allows the employer to assess the economic sustainability of the business on a regular basis. It can thus estimate its human resources needs and the direct consequences of job losses on its production and make concrete decisions on the mobilization of its employees in the short and medium term. However, if the impact of the current context can jeopardize the solvency of the company, the employer can consider the dismissal of employees.
DISCHARGE: The employer permanently breaks the employment bond for reasons such as the employee’s lack of skills or his unacceptable behavior. This measure must be based on serious grounds as well as a good and enough reason. That is to say that the employer who executes it must do so because of a serious fault such as insubordination, incompetence, or a serious breach of the employee’s obligation of loyalty. In the event of a dispute, the employer must demonstrate a good and a enough reason for the dismissal or pay the necessary compensation.
Can the pandemic be defined as a force majeure?
According to the Civil Code of Quebec and the case law, force majeure is an unforeseeable and irresistible event. The CNESST gives the fire as an example of force majeure. This is a fortuitous event that the employer cannot foresee. However, each situation of dismissal or layoff which invokes force majeure must be rigorously analyzed in light of the facts.
How to be a good corporate citizen?
Before proceeding to a dismissal without a notice of termination (see box), the employer must look at the assistance programs and measures offered by the provincial and federal government. For example, Canada’s Emergency Wage Subsidy and the PACME program are being put in place to help employers retain their employees during the COVID-19 crisis and to ensure their continuity following the gradual reopening of activities of their companies.
Being good pays off. The crisis will pass, and employers will need good employees when they return to regular activities. We suggest adopting new communication measures with employees like following up by email, telephone or videoconference to pass on your messages and vision so that employees do not feel abandoned.
Therefore, it is preferable that the employer tries to keep his employees either by temporary layoff or by using government assistance programs and measures. Indeed, dismissal is not always the best solution, although it can provide financial and temporary relief to employers in the current context.
These unprecedent times, challenges even the strongest companies, therefore it is more important than ever to consult your labor lawyer to help you decide these questions. Obtaining a legal opinion adapted to your situation and sector of activity minimizes the risk of possible litigation.
* Note, the case law plays an important role in legal analysis and may give different and broader rights than those provided by the law.
My obligations as an employer
In the event of a dismissal or temporary layoff of more than six months, the employer is required to give a written notice of termination of employment to his employee who has at least three months of service. This notice must contain the following essential information:
1. It must provide for an employee departure deadline. Under the Act, the period between the termination notice and the employee’s departure varies according to the number of years of continuous service. This period may also be different depending on the case law applicable to each situation; and
2. The reason for termination of employment.
If the employer does not give a notice of termination of employment or does not deliver it within the prescribed time, he will have to pay compensatory indemnity.
Remember that in these difficult times, the employer should act as a good corporate citizen. This means that he must, in the context of social media and the spread of information at high speed, be socially responsible by weighing each action vis-à-vis his employees and his community. Employers must be willing to take good initiatives in order to have a positive impact on society.
This section does not constitute a legal advice. Please consult a lawyer who practices labor law if you are faced with a situation or question like the ones presented below. Each situation is distinct and specific, depending on its context and the applicable facts. The answers below are general in the context of an employer and an employee under Quebec jurisdiction.