‘Quiet Layoffs’: What employees need to know

What is a quiet layoff?

A quiet layoff, also known as a “stealth layoff”, occurs when an employer gives staff advance notice that they are being let go.

• Example: Your boss informs you on Feb. 15 that you will be laid off on Nov. 15. Receiving working notice from the company gives you an opportunity to line up a new job before the employment relationship ends.

According to news outlets, including Axios, employers are hoping that this approach will foster more goodwill from departing workers and help them avoid negative media coverage.

However, some companies would rather provide generous severance packages immediately than conduct quiet layoffs — worried that staff will share confidential information with other businesses as they look for new work.

SEE ALSO
• ‘Loud Layoffs’: What employees need to know
• What Canadians need to know about ‘quiet firing’
• ‘Quiet quitting’ in Canada: Employee rights

Major layoffs continue

After significant job cuts in 2022, major employers continued to scale back their staffing levels in 2023.

Big names, including Etsy, Hasbro, Nike, Spotify, RBC, TD Bank, Broadcom, Amazon, AbCellera, Canadian Tire, PwC, Maersk, and Nokia, have pulled out the axe as they navigate challenging economic conditions.

SEE ALSO
• Firm launches $130M class action against Shopify for breach of contract
• Panera laying off 17% of corporate staff ahead of IPO
• Where are layoffs happening in Canada?

Severance pay in Canada

In Canada, non-unionized employees are owed full severance pay when they are fired without cause or let go.

This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Severance can be as much as 24 months’ pay, depending on a variety of factors.

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance packages on an episode of the Employment Law Show.

Even if you are terminated for cause, it’s very likely that you are still entitled to full severance pay because non-unionized employees often don’t meet the conditions necessary for this type of dismissal.

Regardless of a company’s grasp on employment law, they are legally required to provide proper compensation following a termination.

This concept applies during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

LEARN MORE
• Severance for provincially regulated employees
• Rights to severance for federally regulated workers
• Severance packages during mass layoffs

Does working notice affect severance?

The short answer is yes. If a non-unionized employee in Canada receives working notice, it will affect how much severance pay they are owed when the employment relationship ends.

• Example: You are entitled to 10 months of severance pay if you are fired or let go immediately. One day, your employer gives you five months of working notice. When the working notice period ends, the company will owe you five months of severance instead of 10 months.

Similar to calculating severance pay, the length of the working notice period is determined using various factors, including salary, position, how long you have worked for the company, and your ability to find similar employment.

If you believe that your employer didn’t provide you with the correct amount of working notice or severance, contact an experienced employment lawyer at Samfiru Tumarkin LLP.

We can determine if you have been wrongfully dismissed and help you secure the compensation you are owed.

SEE ALSO
• Severance Pay Calculator: Determine your entitlements
• Employment Law Show: Things to never do before seeking legal counsel
• Employment Law Show: Situations that trigger legal disputes

Can my boss make major changes to my job during the working notice period?

Non-unionized workers in Canada don’t have to accept substantial changes to the terms of their employment.

Major modifications, such as a demotion, workload increase, and pay cut, are illegal.

If significant adjustments are made to your job without your consent, there is a very good chance that you can treat it as a constructive dismissal.

In this situation, the law allows you to resign and pursue full severance pay.

However, you shouldn’t quit your job until a member of our team confirms that you have been constructively dismissed.

ADDITIONAL RESOURCES
• Changes to your job in Ontario: What employees need to know
• What Albertans need to know about changes to their job
• Changes to your employment in B.C.: Employee rights

My boss is pressuring me to sign my severance offer immediately, what should I do?

In Canada, it’s not uncommon for employers to pressure non-unionized workers to immediately accept severance offers that provide them with far less compensation than they deserve.

If you receive an offer from your boss, don’t sign anything before contacting an experienced employment lawyer at Samfiru Tumarkin LLP.

Your company can’t legally force you to accept it before leaving a termination meeting or even a few days after it was provided to you.

In some cases, employers try to add:

• A termination clause that limits the amount of severance pay you can receive
• Non-compete clauses that prevent you from being able to pursue employment elsewhere in your industry

As long as you didn’t accept the offer and return it to your boss, you have two years from the date of your dismissal to pursue full severance pay.

SEE ALSO
• I already accepted a severance package, what should I do?
• ’60 days or more’: Is it an enforceable termination clause?
• Employment Law Show: 5 facts about employment contracts

My employer won’t provide me with any severance after I declined their offer, can they do that?

The short answer is no. Employers in Canada can’t revoke severance offers simply because an individual declined it or attempted to negotiate more compensation.

If your boss refuses to provide you any severance because you turned down their initial offer, it’s very likely that you have grounds for a wrongful dismissal claim.

ADDITIONAL RESOURCES
• Should I negotiate my own severance package in Ontario?
• What Albertans need to know about negotiating severance packages
• Negotiating severance in B.C.: What employees need to know

Lost your job? Speak with an employment lawyer

If you are fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Ontario, Alberta, and B.C. have helped tens of thousands of non-unionized individuals resolve their workplace issues.

We can review your situation, enforce your rights, and ensure that you receive the compensation you are owed.