Mar 2, 2023
Review your rights before signing paperwork during a layoff: Employment lawyers
The Canadian Press
You've just made it into the office, when your boss brings you into a meeting room, where you find someone from human resources about to deliver you bad news: your company is carrying out layoffs and you're on the list.
Your mind is swarming with thoughts - How will you pay the bills? When will you find your next job? What happens to all those vacation days you haven't used up? - when you're handed a letter outlining how much severance pay and other benefits your company is prepared to give you.
Should you sign the paperwork immediately? Not necessarily, say lawyers who have been approached in recent months by a wave of laid off employees eager to explore their rights and ensure they're getting the most they can from their former employers.
“The reason why you never want to sign right away is because that is your final kick at the can,” said Sunira Chaudhri, a partner at Workly Law in Toronto.
“Even if you have a legitimate claim to anything else from your employer, including vacation time or a bonus or the return of expenses, if you sign a release prior to sorting out all of those details, you cannot go back to your lawyer to seek any additional payments.”
Chaudhri urged people who lose their jobs to review their employer's obligations and compare them with what the company is offering before signing any paperwork.
“The moment you sign a release, your rights are gone,” she warned.
What workers are entitled to is often spelled out in a mix of federal and provincial laws, employment and collective agreements staff sign when hired or during union bargaining and those termination letters.
Unionized employees must turn to their collective agreement, which should outline what they are entitled to, said Lior Samfiru, a partner at Samfiru Tumarkin LLP in Toronto.
“There's really not much to negotiate,” he said. “The collective agreement says you get X, employers pays X and that's it.”
Figuring out what you're entitled to can be more complex for non-unionized workers, but Samfiru said it's worth looking into.
In more than 90 per cent of the cases his firm has handled where someone was let go, they've been owed more than what the company offered.
The first place non-unionized employees should look for information about their entitlements is their province's Employment Standards Act, which outlines the minimum rights employers have to provide during a layoff.
But almost every employee has greater entitlements than those minimums under common law, Samfiru said.
“The longer you work, the older you are and the more senior position you have, the more entitlements you have under common law,” he said.
And it's not just additional weeks or months of salary that companies may be on the hook for.
Benefits, bonuses, stock options and commissions may also have to be handed over to workers for a period of time beyond their last day, Samfiru said.
“Ask yourself, would I have received this if I continued working for the 12-month period? And if the answer is yes, I would have, then it has to be included as part of your severance.”
Another issue that often comes up during layoffs is non-compete clauses, which prevent workers from going to work for rivals during a set period of time following their termination.
Samfiru and Chaudhri agreed such clauses are unenforceable for all workers aside from those in the C-Suite, the highest echelons of a company.
But Samfiru warned some companies will try to enforce the clause anyway.
“If they're going to try to enforce it, they're going to sue you,” he said. “You might eventually win that lawsuit, but it's still going to be a very miserable experience, and it's going to cost you a lot of money, so it's not good advice to tell someone to just ignore the non-compete.”
When trying to figure out what clauses to abide by or what you can fight your company for, Samfiru and Chaudhri recommend laid off workers seek advice from a lawyer.
However, Chaudhri added it's important to consider the value and costs before taking action.
Some people will find legal expenses will outweigh any extra cash or perks they get from an employer. Others will learn their odds of making a successful argument aren't high.
Laid off workers should ask lawyers about both scenarios before taking action and prepare themselves for an outcome they might be disappointed in.
“I can't say that it's ever a slam dunk,” Chaudhri said. “There's always a risk.”
This report by The Canadian Press was first published March 9, 2023.