By Fiona Anderson.
As a former journalist, I can’t help but be mesmerized by the bloodletting that is happening at newspapers and television and radio stations across Canada. The only exception is the publicly funded Canadian Broadcasting Corporation.
Private companies need to make money to survive and, with advertisers now having their own advertising platforms (their websites and social media strategies) and fewer and fewer people reading print newspapers, revenue at media outlets is falling drastically. While some news websites are quite popular, getting millions of hits a day, the money advertisers will spend to advertise on websites is miniscule compared to what they used to pay for a print ad.
So with revenues dropping, media companies have to cut costs. And that usually means cutting staff.
A basic first lesson in employment law that many non-lawyers still struggle with is that employers are allowed to let their employees go, even if those employees are excellent at their jobs. Assuming the terminations are without “cause” and not discriminatory (that is, not based on race, religion, marital status, age or any other prohibited ground under human rights laws), the only rule is that the employee must be given sufficient notice of the termination or money in lieu of notice. (For a full primer on the basics of notice and severance, read my colleague Samantha Stepney’s recent post here.)
So, the question is: what is sufficient? And the answer is…it depends.
Take, for example, Postmedia Network Canada Corp., which owns the Vancouver Sun (my former employer) and the Province through Pacific Newspaper Group. Postmedia announced on March 10 that it would be giving lay-off notices to 54 unionized employees today (March 24). The announcement was made under the terms of the union contract.
In this case, the amount of severance unionized employees will receive, and even whether there is grounds for the layoffs at all, will be governed by their union contract (also known as a collective agreement). According to an old contract I found online, that severance is one weeks’ pay for each six months or major fraction thereof worked, up to a maximum of one year’s salary.
But for those who aren’t part of the union, other rules are at play. And those rules fall into two general categories depending on whether the particular employee is subject to a written employment agreement.
Senior executives taking on a role at a new company generally spend some time negotiating their employment contract, setting out terms like job description, salary, bonus entitlement and what happens if the executive is terminated without cause (termination with cause, which is rare, requires no severance payment). Assuming there is nothing wrong with the contract that makes it unenforceable, the amount of notice or, more likely, payment in lieu of notice, will be determined by what that contract says.
But many employees, whether managers or not, don’t have written employment contracts. In such cases, the employee’s notice or severance rights are governed by employment standards legislation and the common law. Any employee who has worked 3 months or more will receive at least the statutory minimum (ranging from one to eight weeks notice or pay). But he or she may also be entitled to more under the common law, based on four main considerations: the age of the employee, the nature of their job, how long they have been with the employer and how easy or hard it will be to get other work. What the individual employee is entitled to will depend on his or her specific circumstances. (Again, see Samantha’s post for more on this.)
So if your pink slip comes, make sure you know what you are entitled to receive as compensation. And when you start a new job, if it isn’t unionized make sure you negotiate favourable termination provisions before you sign on the dotted line.
Have questions about a dismissal or your new employment contract? Contact us!