As a result of the current state of the economy banks have and will likely continue to cut jobs. Many do so as a part of restructuring changes that banks seek to implement in the workplace. According to a recent CBC article which you can read here, TD has announced that it is planning to reduce its existing full-time workforce by about three percent. This would amount to just over 3,000 employees.

According to the article, CIBC has stated that it will cut its workforce by approximately 5 percent, which amounts to 2,400 employees. The CBC article also states that RBC and the Bank of Nova Scotia have made similar cuts in the past. If you are one of dismissed employees, this blog may be of interest to you.

What is wrongful dismissal?

There is the possibility of a wrongful dismissal or wrongful termination where an employee’s job has been terminated without reasonable notice of that termination. Where wrongful dismissal is present, the employee may be entitled to compensation.

An employer does hold the right to terminate an employee provided that there is reasonable notice to the employee of the employer’s intention. Thus, unless “just cause” for dismissal is established, there are implied terms in contracts of employment that protect the employee against wrongful dismissal by requiring proper notice, payment, or a combination thereof, by the employer. An employee that has been wrongfully terminated is entitled to pay in lieu of reasonable notice which would consist of all entitlements the employee would have been eligible for but for their termination, such as bonuses, pay increases, etc. More often, however, employees are entitled to what is colloquially referred to as a “severance package.”

Some Information about Severance

The term “severance,” “severance package” or “severance pay” is commonly a source of confusion for a lot of people. For instance, “termination pay” and “severance pay” are often used interchangeably, when in fact these terms are not the same at all.

Severance pay is a payment made to a dismissed employee who qualifies for the payment of severance under statute and most bank employees are federally regulated employees. This means that a severance package must at least align with what is set out in the Canada Labour Code, 1985 (“Code”) and likely include additional compensation.

Some Information about Reinstatement

As employment lawyers, we consult and represent bank employees on a regular basis. What is interesting is that because banks are considered to be a federal undertaking, many bank employees may qualify for an extra layer of job protection of which they might not be aware. This extra layer of job protection is set out in the Code.

Essentially, the Code allows a dismissed employee to challenge a work dismissal and to potentially claim reinstatement to their former job if certain conditions are met. This is similar to what an employee might do in a unionized workplace which is different from the typical remedy of monetary damages awarded in the courts in case of a wrongful dismissal action. To do so, the employee must commence an unjust dismissal complaint within 90 days of the dismissal failing which the employee will be out of time to seek this type of remedy.

To qualify for the unjust dismissal complaint process, the employee ought to have completed at least 12 months of continuous employment with the bank; the substance of the employee’s employment was non-managerial; and, the employee’s workplace was not subject to a collective agreement.

In addition to the above, the employee’s employment must not have ended as a result of a just cause (such as insubordination, theft, insolence, etc.) or a “discontinuance” of the employee’s role (i.e. “restructuring”). However, even if the employee’s employment ended on the basis of the above two grounds, the dismissed employee can still challenge any cause allegation raised by the employer or the fact that the employee’s job ended as a result of “restructuring” or “discontinuance” of the employee’s role or function. In other words, the bank’s assertion that the employee was terminated for cause or due to a workplace reorganization does not mean that the employer’s reason for dismissal should be accepted. The Code adjudicator will examine the circumstances surrounding the employee’s dismissal and will render the decision following a hearing on the merits.

How an Employment Lawyer Can Help

The dismissed employee will always have a right to commence a civil action or lawsuit in a court of law within two years of the date of their dismissal. In the course of the wrongful dismissal lawsuit, the employee will be free to seek severance package compensation. There will be procedural differences depending on the employee’s choice of forum and the employee is better off speaking to a labour and employment lawyer in a timely fashion to optimize their odds for compensation and redress.

This route may be more applicable in this recent round of mass terminations because banks will likely be successful in arguing that there was workplace-wide restructuring and elimination of positions on a large scale. Of course, one should always remember that each case comes with its own set of facts and the employee’s termination package or severance package from the bank may well be perfectly reasonable and compliant with the law.

Our recommendation is to bring your severance package or termination letter to a qualified employment lawyer to review if your compensation was fair. For instance, the employment lawyer will see if your age, length of service and position were taken into account in accordance with various legal principles. Likewise, the employment lawyer will see if the severance package includes rights to shares, bonuses, pay increase, work-related expenses and other forms of fringe benefits such as group insurance coverage, etc.

Speak with one of our Employment Lawyers

The bottom line is that a dismissed or laid off employee in the bank industry (or any industry) should not rush to accept any dismissal package that their former employer gives to them. You have the option to seek legal advice from an employment lawyer to determine if your compensation is fair, reasonable and lawful under the circumstances. The employment lawyers at Zeilikman law can help.