Leon’s Layoffs and Severance Pay

Furniture chain Leon’s is temporarily shutting down 72 stores across Canada and laying off 3,900 employees due to to ongoing COVID-19 pandemic. The Canadian company, based in Toronto, has a total of 205 stores across the country.

Leon’s also owns The Brick, Appliance Canada and Midnorthern Appliance.

This layoff accounts for approximately 50% of the company’s total workforce.

The business is offering laid-off workers a top-up in addition to what their employees might receive through Employment Insurance during the COVID-19 outbreak. Company benefits will also be paid to laid off workers.

Leon’s and Severance Pay Facts

Leon’s employees in Ontario or British Columbia facing either a permanent layoff or a temporary layoff have employment rights, especially where they pertain to severance pay. Employees are entitled to severance pay during the COVID-19 pandemic if they are terminated from their job. A company can’t simply “suspend” their legal obligations under the ESA due to the coronavirus outbreak.

If an employee is let go from their job, they are owed severance pay.

If an employee is temporarily laid off, they have two options:

• Accept the temporary layoff, and wait to see if they are called back to work; or
• Treat the layoff as a termination, and seek a fair severance package to keep them financially stable until they can find new employment.

Many companies anticipate that their employees are largely unaware of those rights, whether under the provincial Employment Standards Act (ESA) or common law. In other cases, employers are legitimately unaware of their obligations to workers during the termination process.

See More:
COVID-19 and Employment Rights: Everything You Need to Know
Loblaws layoffs: Two important severance facts

Incorrect Severance Packages and Wrongful Dismissal

Severance packages are often miscalculated by employers when laying off employees without cause. Approximately 90% of employees experience a wrongful dismissal when they lose their job. In other words, workers who are let go are not given the correct amount of severance pay under common law.

Meaningless deadlines on severance offers

A common myth suggests that when a company, such as Leon’s, fires an employee, the employee must accept a severance offer within a matter of days. If that severance offer deadline passes, that person’s right to severance pay expires. That is completely false. You have up to two years from the moment of your layoff or termination to obtain the severance package that you deserve.

How to properly calculate severance pay

Another false concept concerns how severance pay is calculated. There is a belief that severance pay comprises of a week or two weeks for every year of service an employee has with the company. That formula does hold true when determining an individual’s MINIMUM severance pay amounts.

Most workplaces in Ontario and British Columbia are governed by their respective ESA. The ESA sets the least amount of compensation that an employee should receive when let go from their job.

When confirming a person’s complete severance package, it is vital to do so using “common law” methods. Our court system determines what compensation a worker should receive when they lose their job. For non-unionized employees, the main factors of termination pay are age, length of service, position, and ability to find new work. Use this helpful severance pay tool to determine your severance pay range.

These factors apply to employees at Leon’s.

Additional Resources:
Severance pay in Ontario
Bonuses and severance pay

Termination “for cause”

In a termination “for cause” the employer does not have to provide severance pay to the outgoing employee. The employee must be given their accrued wages and vacation pay.

What many employers and employees don’t realize is that a vast majority of these types of terminations are not valid, simply because the reason for dismissal is not serious enough to warrant a termination without severance pay.

A true dismissal for cause is reserved for the most serious workplace misconduct (think dishonesty or theft). Generally speaking, a termination for cause does not apply when an employee is late for work, or fails to pass a performance improvement plan.

In cases where the employer is unable to prove that they had just cause, the employee is owed full severance pay.

Ministry of Labour or Employment Standards Branch

If you lose your job at Leon’s or any large retailer, it is imperative that you do not consult with the Ministry of Labour in Ontario, or the Employment Standards Branch in British Columbia. As noted earlier, neither of these organizations can secure your full severance pay. They can only obtain your minimum termination pay according to government policy.

Once you file a claim with either one of those provincial bodies (depending on which province your live or work in), you relinquish your right to file a claim with one of our skilled employment lawyers.

Before you seek advice from the Ministry of Labour or Employment Standards Branch about your dismissal from Leon’s, contact us to discover the full extent of your rights.

Don’t sign on the dotted line!

If you wish to explore all of your options post-termination, do not sign any severance offer, termination papers or exit agreement that Leon’s may provide you with. Once you put pen to paper, you eliminate your ability to negotiate a fair severance package.

Our employment lawyers in Toronto, Vancouver employment lawyers and employment lawyers Ottawa. have helped thousands of individuals in Ontario and BC. Contact us or call 1-855-821-5900 to get the advice you need, and the compensation you deserve.