In these difficult economic times, a collective dismissal is not only a current topical issue but also one of the main concerns for employers. As questions on this issue are abundant, an overview of the basic notions a knowledgeable employer should be familiar with is in order. By the end of this article, you will know what a collective dismissal is under the Act respecting Labour Standards, what the indemnities and notices required are, as well as the consequences of non-compliance with these rules.
Dismissal of 10 or More Employees is a Collective Dismissal
In Québec, a collective dismissal is:
- the termination of employment, including a layoff for a period of six months or more;
- involving not fewer than 10 employees of the same establishment;
- in the course of two consecutive months.
An employer who makes such a dismissal is subject to the collective dismissal rules provided for in the Act respecting Labour Standards.
Notice of Collective Dismissal
Before making a collective dismissal, the employer must:
1. Give notice of the dismissal to the Minister of Employment and Social Solidarity. The amount of notice required depends on the number of employees affected by the dismissal:
a) where the number of employees affected is between 10 and 99, eight weeks is required;
b) where the number of employees affected is between 100 and 299, 12 weeks is required;
c) where the number of employees affected is 300 or more, 16 weeks is required.
The reason behind these varying notice periods is mainly due to the fact that the greater the number of employees looking for new employment at the same time, the longer it may take them to find it.
2. Transmit a copy of the notice to the Commission des normes du travail and to the certified association representing the employees affected by the collective dismissal, if there is one.
3. Post the notice in a conspicuous and readily accessible place in the concerned establishment.
It is essential to emphasize that this notice does not exempt the employer from giving individual notices of termination of employment to the employees affected. These are two separate notices.
Impact of These Rules
One of the first impacts of the notice for collective dismissal is the preservation of working conditions with regards to wages, group insurance and pension plans for the time of the notice period. The employer must obtain the written consent of the employee, or the certified association representing the employee, to modify any part of these conditions.
Furthermore, where a dismissal affects 50 or more employees, the Minister may request the employer to establish a reclassification assistance committee.11 The mission of this committee is to provide the necessary resources to minimize the impact of the collective dismissal on the affected employees as well as facilitate the maintenance or re-entry into the labour market of these employees by developing a reclassification plan.
The financial contribution of the employer to this program shall be agreed on by the employer and the Minister. The Minister may exempt the employer of the establishment affected by the collective dismissal from setting up this committee if the employer offers the affected employees equivalent or better measures.
Repercussion of Not Giving Notice or Giving Insufficient Notice
An employer who does not give the required notice must pay a compensatory indemnity to each employee affected by the collective dismissal. This indemnity is equal to the employee’s regular wages for a period equal to the required notice period, or the remainder of the required notice period if the notice given was insufficient. Note that the employee may not cumulate this indemnity and the indemnity given for termination of employment. He or she is entitled to the greater of the two indemnities.
In the case of a superior force or unforeseeable event, the employer is not required to pay this indemnity. A superior force is an unforeseeable event that is impossible to resist, such as a fire caused by lightning. According to caselaw, an extended unfavourable economic situation does not constitute a superior force.
However, it is possible that an unfavourable economic situation may qualify as an “unforeseeable event.” A recent ruling of the Court of Québec determined that an “unforeseeable event” does not have to be an “unpredictable event” and is, therefore, a less exacting standard than that required by “superior force.” In this ruling, the court decided that the sudden and significant loss of contracts in a very short time span does constitute an unforeseeable event. It remains to be seen what other types of unfavourable economic situations may qualify as an “unforeseeable event” in the future.
Lastly, it must be emphasized that an employer who fails to give notice, or who gives insufficient notice, may be liable to a fine of $1,500 for each week or part of a week of non-compliance. This fine is in addition to the payment of the indemnities described above.