Protecting Termination Rights for Boomers – 3 Things You Must Know [video]

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Restructuring of companies has a significant adverse impact on the employment of baby boomers. How do boomers protect and preserve their termination rights? This lecture provides three simple answers.

This lecture is taught by Amer Mushtaq, LL.B., M. Engineering , B.Sc. (Hons.), who is the Principal and Founder of Formative LLP.   Through his YouTube channel, YouCounsel, Amer shares practical advice from his years of legal experience to help anyone access justice and achieve their goals.  Subscribe today to learn more.

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Welcome everyone, this is Amer Mushtaq from You Counsel. Today, we’ll talk about terminations rights for boomers and 3 things that you must know if you are a baby boomer. I was specifically asked to cover this topic by some of my clients, who fall into this category, and they thought it would help other baby boomers in the future. But the principles that I talk about in this lecture equally apply to people of different ages as well, so you can benefit from this regardless of whether you’re a baby boomer or not.

We’ll start with a disclaimer that this course is not legal advice if you have any specific questions you must contact a lawyer or paralegal.

So, most of the termination letters that you will find these days, they will indicate that to an employee that Joe or Mary, your employment is being terminated without cause due to business restructuring or corporate restructuring. That’s a very common reason for dismissal these days, and so what on earth is this restructuring? Restructuring is a very simple concept in business, and essentially what it means, is to make certain changes to the business so that the business becomes more sustainable and more profitable, that’s essentially what a restructuring means. And so restructuring could be done in a variety of ways, for example, you can come up with new ideas, new innovations, you can change your business model, and you can create processes which are more efficient, so on and so forth. But one of the elements of restructuring is relating to employment law and that is what I’m going to talk about today. You will notice that the easiest way to restructure a business and make it a bit more profitable or sustainable or make it look profitable, is to reduce the business expenses, and when you’re looking at business expenses, if you are dependent on a large number of employees, then employees become an easy target for a restructuring. If you reduce the workforce, or you make the workforce cheaper, then you will be easily able to show that the business is doing well, so that is sort of the one of the easiest ways of restructuring, and actually the most common one.

There are 3 ways that restructuring is commonly done in Canada, and one example is outsourcing work or off shoring work, which is the most common one, and I’m sure everyone of you is familiar with that. The idea is that if you’re paying $80,000 to someone in Canada to do a job and if you can hire someone across the world somewhere else, and pay that person $10,000 for the same job, then the math is straightforward and the answer is simple, eliminate that job and pass it on to the person who lives elsewhere. So, that’s outsourcing, offshoring and it’s been going on for a while. The other option, is that you replace that worker with another or reduce the work force or a combination of both. And this is essentially replacing that worker with another human worker, and the example of that could be, that again the employee who’s been there for 20 years makes $80,000, and then why not find somebody who you can hire for $40,000, half the salary, half the age, 25 years old, and maybe able to work twice as much, 20 hours a day, 18 hours a day. So, that’s sort of one-way of changing the workforce, and then reducing it. Obviously, because if you’re making the new employee work for 2 employees previously, then you’re already reducing the work. And then the third way, is that why be dependent on human being at all, and just replace the human with a machine, whether it’s an artificial intelligence, whether it’s a robot or whatever machine or software that you want to use to replace or reduce that human element and you could do that. So, as you can see all 3 of these factors, all 3 ways of restructuring affect all of us, regardless of our age, regardless of our position, regardless of our expertise. But item number 2 that I’m talking about, replacing reducing with another has a significant impact on the aging population and baby boomers, and this may impact them more than any other category of people. And so I want to talk about that a bit more today and explain that. And I can tell you that outsourcing, offshoring, has been around for a long time and there has been a lot of criticism on it, and there is a general trend overallm at least in the western world, to sort of reduce the outsourcing offshoring, if you’re familiar with the political environment these days. So, what I believe is an employment lawyer is that the number 2 is going to continue to be on the rise, because it’s easier to justify, to say that I’m a Canadian company or we’re a Canadian company and 1000% of our workforce is Canadian and nothing is offshore, but then, what you have done is you have replaced or reduced the workforce by someone half the age, half the income, and twice the hours. So, that’s sort of what I believe is on the rise and is happening more frequently than people understand. So, if you’re a baby boomer, you’re falling into this category, and I can tell you the way I see the Employment Law world, I’ve been practicing for 10 years and I’m constantly seeing this kind of restructuring. I can tell you with certain assurance, that if you are a baby boomer, your employment is absolutely on the chopping block in the near future, because of this approach towards restructuring.

So, that the issue is then simple for an employer, it get rid of that employee hire somebody half the age, half the value in terms of money and then make the person work twice as hard, but there’s a problem. And the problem for the employer, is that in Canadian law employees have rights on terminations, and one of the significant right on terminations, is getting reasonable notice or termination rights, and I’ve spoken about this in a separate lecture and quite detail. If you’re unclear about this concept, then by all means check those lectures.

So, what does that mean? I’ll give you example, in terms of monetary values, if you have an employee baby boomer who’s been working for 20 years, 50 years old, makes $80,000, then if you have to let go of that person on the basis of providing a reasonable notice, then potentially you may have to spend $160,000 plus to get rid of that employees, so that’s a large amount of money, and if you have to let go of a number of people, then that cost could be millions of dollars. So, an employer who’s trying to save costs, who is trying to save money, would really not like to spend that much money in letting go an employee. So what do you do as an employer to save that kind of money? And you know all kinds of solutions are devised to sort of go around that problem, and I’m going to go through the most common 3 solutions.

Number 1 is revised contracts. So, what I mean by that and I’ve seen this happening, it’s not something that happens elsewhere in the world and not in Canada. And in this situation, when the employer realizes that they want to let go, a person and his or her entitlement, is significant and hundreds of thousands of dollars, sometimes what they will do is, they will try to revise a contract either by increasing that employee’s salary abate or changing the employment duties abate, somehow making certain changes, and in that new contract, the employer will sneak in a terminations clause, which will limit the employee’s terminations right significantly. So, I can give you an example in Ontario, if that new contract puts in a termination clause that says, if we terminate your employment, your entitlement on termination is limited to what’s stated in Employment Standards Act 2000, then that means that this employee who was there for 20 years, making $80,000, who could have been entitled to $160,000 based on now the application of the Employment Standards Act, may only get 2 months of pay, two weeks of pay, it’s like a significant reduction in the termination rights. So, that’s sort of one way that the employer may go around this problem of providing reasonable notice and revise the contract. So, if you are faced with that kind of situation you have to be alert.

The other approach is again pretty simple, why don’t we make the employee leave? Because if the employee leaves, the employee resigns, then he or she is not entitled to any reasonable notice, it’s resignation, so there’s no severance payment that is triggered by resignation. And so, some of the ways, the employer will do it, and I can tell you, I have corporate clients and they don’t do these kind of things, and I would never you know advise them to do these things, but it is not to say that this doesn’t happen. This happens enough that I am putting this in a lecture and I’m saying that you have to be watchful of these things. So make the employee leave, so create an environment, a poisonous environment for the employee, start criticizing him, start harassing him on benign things, making just his day miserable or her day miserable on an ongoing basis to the point that the employee just can’t stand it, and decides to leave the workforce or resigns, and then you don’t have to pay any reasonable notice or any severance or termination pay.

And then the third approach is, if the employee is still not leaving, then you start attacking the employee’s performance. So, what that means is start documenting, start issuing warning notices to employee, saying that he or she is not performing up to the required standards, maybe put the employee on performance improvement plan things like that. So, the employer does starting to build a record, so that it can use that record to maybe justify a dismissal for cause and in a dismissal for cause, the employee is not entitled to any terminations or severance pay. So these are some of the 3 solutions that the employer may try to impose to reduce its obligations on termination from $160,000 in that example to literally bringing it down to 10 to $15,000 or 0. So is that legal? Of course not. If an employer is doing any of these things, there is a legal issue, obviously in Canada, because we have certain laws that protect the employees.

So 2 legal issues arise from this kind of behavior, one is obviously discrimination and in Ontario, we have the Human Rights Code, which prevents discrimination on the basis on a number of grounds, age being one of them. So if you are in a situation, or if you notice that an employee is being discriminated because of his or her age, and these are the actions that the employer is instituting to either terminate the employee or to put him or her in a position that the employee leaves, then it could be an issue of discrimination. And the second issue is the larger issue of Bad Faith Conduct. Obviously, if an employer is putting these kind of plans into action this is a bad faith behavior to curtail your lawful obligations towards that employee. So, obviously, this kind of conduct can give rise to legal issues, if you are alert to it and if you are keeping track of what’s going on with you, so that’s why this lecture is important, and you need to protect yourself so that’s the key thing that if you’re in a workforce, if you’re in a workplace where you expect that any of these things may happen or you start noticing changes that are unusual, then you want to protect yourself.

So I can give you 3 suggestions to keep in mind, number 1 is document document, document. I cannot emphasize enough that if you started noticing changes in your workplace that are not positive, either it’s unnecessary criticism of your work performance or anything else that you think is unusual, you start documenting. And the way you document, it is not documented on your work computer, but you document it at home and on your personal computer, and you keep evidence. If there are documents, memos, or e-mails that prove your case, then you want to keep records of that because you would need those if you are terminated. The second part of that I want to emphasize, is that if your performance is being criticized improperly and unfairly, you want to dissent, you must raise the issue in writing, I would prefer in writing, but if not in writing, orally or in meetings, that you do not agree to the performance issues that are being raised. Because if you don’t dissent, if you don’t raise the issue, then by conduct by not raising it may be consider that you agreed to those criticisms, so you must dissent if there is a performance issue being raised against you. And then the third thing, the larger part of that you want to keep an eye on, is what’s happening to other employees? And you would realize, let’s say, if you notice that there was a wave of terminations that took place and you see a theme there, you see a common element that majority of the older employees have been picked for termination, then you can gather that information, you can write down their names so that you can use that as evidence to indicate that there may have been an age discrimination going on in the workplace. So you want to keep your eyes open and see what’s happening to other employees in your workplace, so that you can gather that information and use it if you need to.

So, these are at least 3 things that you can do to ensure that you can protect your rights on termination, and if you look, if you’re faced with an employment contract or a new employment contract, you must not agree to it unless you review it with an employment lawyer to make sure that you’re not giving away your significant rights on termination. So hopefully, this was helpful for the for the boomers and for other people whose workplaces maybe going through employment restructuring, and you want to guard yourself and protect your rights on termination. If you want us to address a specific topic, please send us an email or put comments on YouTube, and we’ll be happy to add those in the next lecture. Thank you for watching.

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