The recent Newsweek article, White-Collar Jobs Are Disappearing, outlines a disturbing trend in the United States: the disappearance of well-paying, white-collar jobs once considered stable. Driven by automation, artificial intelligence, and cost-cutting measures, many U.S. employees are finding themselves abruptly terminated with little recourse. This shift underscores an important contrast between the American and Canadian employment law landscapes—particularly in Ontario, where employees benefit from significantly greater legal protections.
Understanding Ontario Employment Protections
In the U.S., employers can generally terminate employees at any time, for any reason, and without notice, unless contractual terms or specific laws say otherwise.
In Ontario, employers must provide reasonable notice or pay in lieu of notice when terminating an employee without cause. Pursuant to the Employment Standards Act, 2000 (ESA), the statutory minimums depend on the employee’s length of service. However, most non-unionized employees are also entitled to common law notice, which can substantially exceed your ESA minimum entitlements. Factors such as age, position, length of service, and availability of comparable employment are considered by the courts in assessing fair notice periods.
Wrongful Dismissals and Constructive Dismissal
A termination is “wrongful” if an employee is let go without just cause and without adequate notice or severance. In the U.S., employees often lack any practical legal remedy unless discrimination or a statutory breach is involved.
In Ontario, courts have long held that employees are entitled to fair compensation for wrongful dismissals. Employers who fail to provide sufficient working notice or severance packages may be liable for damages. Moreover, if an employer unilaterally imposes significant changes to essential terms of employment—such as a demotion, pay reduction, or relocation—the employee may have grounds for constructive dismissal. This legal doctrine allows an employee to treat the change as a termination and pursue damages as though they were dismissed.
Temporary Layoffs
The Newsweek article also points to widespread restructuring. However, in Ontario, temporary layoffs are not as simple as they appear. Employers who impose layoffs without proper legal footing risk triggering a termination.
Under the ESA, a temporary layoff is only permitted if:
- It’s expressly allowed in the employment contract;
- It’s a well-established industry practice; or
- The employee has previously accepted a layoff.
Even when permissible, layoffs are time-limited:
- Up to 13 weeks in any 20-week period, or;
- Up to 35 weeks in a 52-week period, if benefit continuation or other ESA criteria are met.
If these conditions are not met, or if there is no contractual authority, a court may deem the layoff a constructive dismissal.
What Ontario Employees Should Do
If you are facing termination, a layoff, or a significant change in your job duties, you should:
- Review your employment contract carefully;
- Document all communications and employment changes;
- Seek legal advice before signing any severance package or release.
Employers in Ontario must navigate a complex legal framework when downsizing or restructuring. Missteps can result in significant liability. Employees should be aware of their rights and not assume that corporate restructuring or economic hardship eliminates their legal entitlements.
If you are impacted by the current economic downturn, contact us today. Our team of employment lawyers will be able to provide you with guidance to ensure you receive your entitlements.