Shopify Faces Severance Class Action: Employment Lawyer on Canadian Justice

Interview Summary

After termination of employment occurs, many employees are unsure of their rights and the next steps. In its latest round of layoffs, Shopify originally seemed to offer adequate severance packages to employees. After terminated employees accepted, however, the offers were reneged. Shopify now faces a class action lawsuit filed on behalf of former employees.

Mackenzie Irwin, a Toronto employment lawyer and Associate at Samfiru Tumarkin LLP joined host Christine Van Geyn on Canadian Justice to discuss the ongoing suit and options for Shopify employees.

Interview Notes

• Determining factors of severance: Employees that have been terminated without cause are owed severance pay based on several factors. Severance is typically calculated based on an employee’s age, length of employment and position. Employees should also consider whether or not there is a termination clause within their employment contract.
• Offered the maximum amount of severance pay: It is crucial for individuals who have been terminated to seek legal advice from an employment lawyer before agreeing to a severance package. While employers may seemingly have offered an adequate package, it is rare that the package encompasses everything an employee is owed. Often severance packages do not include extra elements of an employee’s compensation, such as bonus payments, commission, car allowances, etc.
• Changes to an employee’s role: Employers do not have the ability to impose a major change to an employee’s job without their consent. A major change can be a demotion, significant relocation, drastic drop in pay, etc. Employees can treat the imposed change as a termination of employment and pursue constructive dismissal.
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• Shopify class action: After accepting a severance offer, many former Shopify employees were informed that the initial severance package was incorrect. Some terminated Shopify employees saw their severance packages reduced to almost half of the agreed-upon amount.
• Frequency of reneging on severance offers: It is very uncommon for employers to renege on a severance offer after an employee has already signed and agreed. Many employers implement severance offer deadlines as a pressure tactic in order to force employees to accept the initial offer. Employees have up to two years after the date of termination to pursue their rights and entitlements.