Layoffs are a difficult and challenging process for both employers and employees. Here is some guidance and information you’ll need to navigate the layoff process in a legal, ethical, and compassionate way. We will cover the legal requirements for layoffs in Canada, strategies for planning and communicating with employees, alternatives to layoffs, and tips for managing the aftermath of a layoff.
There can be many reasons why Canadian companies are considering layoffs today, but some of the most common ones include:
- Financial difficulties: Companies that are facing financial difficulties, such as declining revenues or increased expenses, may consider layoffs as a way to reduce costs and improve their bottom line.
- Restructuring and reorganization: Companies that are undergoing restructuring or reorganization may consider layoffs as a way to streamline their operations and improve efficiency.
- Mergers and acquisitions: Companies that are involved in a merger or acquisition may consider layoffs as a way to eliminate redundancies and integrate the operations of the two companies.
- Technological advancements: Companies that are investing in new technologies or automating processes may consider layoffs as a way to reduce the number of employees needed to perform certain tasks.
- Changes in market conditions: Companies that are facing changes in market conditions, such as increased competition or changes in consumer demand, may consider layoffs as a way to adapt to these changes.
- Impact of COVID-19: The pandemic has affected many industries and companies, forcing them to reduce their workforce due to a decrease in demand or closures.
It’s important to note that layoffs are a last resort measure and employers should consider alternatives before taking this decision. Companies should also consider the impact of layoffs on the remaining employees and on the community, and make sure to follow the legal requirements and provide support to the employees that are laid off.
In Canada, there are several laws and regulations that employers must follow when conducting a layoff. These include:
- The Canada Labour Code, which applies to federally regulated employers and sets out the notice period that must be given to employees before a layoff.
- The Employment Standards Act, which applies to provincially regulated employers and sets out the notice period that must be given to employees before a layoff.
- The Human Rights Code, which prohibits discrimination on the basis of certain grounds, such as age, sex, and disability. Employers must ensure that their layoffs do not discriminate against employees on the basis of these grounds.
- Legal council – always involve your legal team to ensure all the i’s are dotted and the t’s are crossed.
Employee Selection process
Employers must also be careful in the selection of employees for layoff, making sure that the employees selected are not selected on a discriminatory manner.
When selecting employees for layoff, employers should consider several factors to ensure that the process is fair, legal, and non-discriminatory. These factors include:
- Job performance: Employers should consider the job performance of employees when selecting them for layoff. Employees who have consistently performed poorly or have not met performance expectations may be more likely to be selected for layoff.
- Attendance and reliability: Employers should also consider the attendance and reliability of employees when selecting them for layoff. Employees who have a history of excessive absenteeism or who are frequently late may be more likely to be selected for layoff.
- Skills and qualifications: Employers should consider the skills and qualifications of employees when selecting them for layoff. Employees who have more specialized skills or qualifications may be more valuable to the organization and less likely to be selected for layoff.
- Seniority: Employers should also consider the seniority of employees when selecting them for layoff. Employees who have been with the organization for a longer period of time may have more job security and be less likely to be selected for layoff.
- Diversity and Inclusion: Employers should also consider the diversity and inclusion of employees when selecting them for layoff. They should make sure that the selection of employees for layoff does not discriminate against employees on the basis of their age, sex, race, religion, sexual orientation, or other protected characteristics.
- Business needs: Employers should also consider the current and future business needs of the organization when selecting employees for layoff. Employees whose roles are not critical to the organization’s current or future success may be more likely to be selected for layoff.
- It’s important to note that employers should ensure that the selection process is fair, objective and non-discriminatory and to document the reasons for selecting certain employees for layoff in case of any legal challenges.
Planning and Communication
Effective planning and communication are essential to a successful layoff process. Employers should begin by developing a clear and comprehensive plan for the layoff, including the number of employees to be laid off, the timeline for the layoff, and the support and resources that will be provided to employees during the transition.
When communicating with employees, it is important to be clear, direct, and compassionate. Employers should be prepared to answer any questions employees may have and to provide them with clear and accurate information about the layoff, their severance pay and benefits, and the support and resources that will be available to them during the transition.
Alternatives to Layoffs
Before conducting a layoff, employers should consider whether there are alternatives to layoffs that could be implemented. These alternatives include:
- Reduced hours: Instead of laying off employees, employers could reduce the number of hours employees work each week. This would help to reduce costs while still allowing employees to maintain some level of income.
- Furloughs: Employers could also implement furloughs, which involve temporarily laying off employees for a specific period of time. This would allow employees to maintain their employment status while also allowing employers to reduce costs.
- Voluntary severance programs: Employers could also offer employees the opportunity to voluntarily sever their employment in exchange for a severance package. This would allow employees to make the decision about whether to leave their employment, rather than having it imposed upon them.
Managing the Aftermath
The aftermath of a layoff can be a difficult and challenging time for both employers and employees. Employers should be prepared to support employees during this transition, both those who are being laid off and those who are remaining with the company. This can include providing employees with access to Employee Assistance Programs, mental health resources, and career counseling services.
Employers should also be prepared to manage morale, productivity, and employee engagement after a layoff. This can include implementing programs and initiatives that help to maintain a positive workplace culture, such as employee recognition programs and team-building activities.