When facing economic unpredictability, employers are often required to make complex workforce management decisions and be agile with their employment practices. Whether contemplating layoffs, terminations of employment or dismissals for economic or organizational purposes, employers should thoroughly assess each measure against the applicable legal criteria that are largely dependent on the relevant circumstances.
Below are five key considerations for responsible workforce management that employers should consider to ensure compliance with the law:
1. Distinctionsbetween a layoff and the end of employment. Pursuant to Quebec's Act respecting labour standards (Act), a layoff is intrinsically temporary and must be founded on actual organizational or economic reasons. While the employment relationship between the employer and the employee is maintained for the duration of the layoff, during such period, the employee is not legally required to work for the employer, nor is the employer required to pay the employee. A layoff of more than six months is considered a termination of employment, subject to certain statutory exceptions. A termination of employment may be based on administrative or disciplinary reasons, whereas a dismissal may involve economic, organizational or technical reasons.
2. Exceptions to prior notice requirements. Whether pursuant to the Act or the Civil Code of Québec (Code), prior notice is generally required when employment is to be terminated for economic or organizational reasons. However, under the Act, prior notice is not required when such termination is the result of a force majeureevent or a serious fault committed by the employee. The length of the prior notice period will depend on the employee's seniority, as well as other contextual factors defined in the Code. In the absence of prior notice, a compensatory indemnity is required, the parameters of which will vary according to the applicable legal regime.
3. Force majeure: Ahighlylimited exception. For an employer to be exempted from the requirement of providing prior notice on the basis of a force majeure event, the event in question must be unforeseeable and unavoidable. Recent case law indicates that an economic downturn, even as a result of a pandemic, does not necessarily constitute a force majeure event. Unusual economic circumstances, supported by rigorous and costed evidence, could be characterized as force majeure.
4. Rules for collective dismissals. Rules pertaining to collective dismissals under the Act apply when the employment of ten or more employees of the same establishment, each of which having at least three months of uninterrupted service, are to be terminated over a period of two consecutive months. The employer must then give notice to Quebec's Minister of Employment and Social Solidarity and comply with much lengthier prior statutory notice periods. In addition, the establishment of a reclassification assistance committee may be required for collective dismissals of more than 50 employees.
5. Alternatives to collective dismissal. To avoid collective dismissals, employers may consider other options, such as mandatory vacation time, or progressive layoffs. These options provide greater flexibility in periods of uncertainty.
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