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Employers grapple with layoff processes in hybrid-work era

Large group layoffs that offer little privacy to employees can create legal issues
andrea-raso
Clark Wilson LLP partner Andrea Raso advises clients to respect employees privacy or potentially be on the hook for a larger damage award if a wrongful dismissal case is successful

Canada’s slowing economy has prompted companies to lay off staff, leaving managers to navigate how best to communicate those reductions to employees at a time when many workers are in the office part time, if at all.

Some Vancouver technology companies ramped up hiring during the pandemic and are now returning workforces to what executives consider an ideal size.

Absolute Software Corp. (TSX:ABST) said it would cut 40 jobs as part of an April restructuring. Hootsuite cut 350 jobs last year, and said in January it would lay off 70 more workers.

Thinkific Labs Inc. (TSX:THNC), Zymeworks Inc. (NYSE:ZYME), Unbounce Marketing Solutions Inc. and Article (TradeMango Solutions Inc.) are other Vancouver companies that have laid off staff in the past year.

American companies that have large presences in Metro Vancouver and recently announced staff cuts across global operations include Microsoft Corp. (Nasdaq:MSFT), Amazon.com Inc. (Nasdaq:AMZN), and Electronic Arts Inc. (Nasdaq:EA).

Nordstrom Inc.’s (NYSE:JWN) plan to exit Canada is expected to cause about 1,000 Vancouver workers to lose jobs.

It is in this environment that some companies have been acting badly, according to human resources consultants and employment lawyers.

American digital-mortgage lender Better.com sparked controversy and was forced to apologize for laying off about 900 employees on a Zoom call in December 2021.

McDonald’s Corp. (NYSE:MCD) temporarily closed corporate offices and told employees to work from home for a few days in early April so it could communicate hundreds of layoff decisions remotely.

Then there is Elon Musk. He bought Twitter Inc. last fall, when it had nearly 8,000 workers. He has since trimmed its staff count to approximately 1,500, with many workers finding out that they had lost their jobs because they were no longer able to access corporate emails or servers.

When former Twitter employee Haraldur (Halli) Thorleifsson asked Musk on Twitter if he had been let go, Musk peppered Thorleifsson with tweets that questioned his role at the company, and what he had accomplished. Musk also questioned whether Thorleifsson was indeed disabled, as Thorliefsson had claimed.

Musk later apologized.

“It is shocking,” Mercer Canada’s national practice lead for transformation and communication, Dora Chang, told BIV.

“Who is going to want to work for him in the future? No one.”

Her biggest lesson for employers is to conduct all layoffs in a one-on-one discussion that is either in person, on the phone or on a personal Zoom call – not in a conference call where others are present, or in a group Zoom chat.

The important thing is to respect employees, she said.

Virtual dismissals are OK, if the employee works from home, because it would not be fair to have someone come into the office just to learn that they have been fired, she said. Dismissal notices, however, should not be in a text, email or other digital message, she added.

“It's affording these people the respect that they deserve,” she said. “Up until recently, they were your employees. They made contributions to your business, whatever it may be. They have sacrificed time away from their families, and away from themselves to contribute to your business.”

Indeed, one recent high profile dismissal was CNN's April 24 ousting of longtime anchor Don Lemon.

Lemon tweeted: "After 17 years at CNN I would have thought that someone in management would have had the decency to tell me directly." 

CNN released a statement saying that it offered Lemon the opportunity to meet with its management but various media reported that CNN's offer for Lemon to meet management came only after Lemon's agent was told that his client was being let go. 

Chang said McDonald's Corp.'s decision to close its office and send staff home to receive virtual notice of layoffs was unusual.

“It seems a little odd if they were telling people to do that, especially in cases where they weren't actually going to be letting those people go," she said. "It seems unnecessarily disruptive.”

Pulver Crawford Munroe LLP partner Dean Crawford told BIV that when employers terminate at once large groups of employees that all work at the same location, individuals in that group may be entitled to higher severance payouts than if the employer were to let go of smaller groups of people, or individuals.

One thing that may be litigated in B.C. courts, he said, is whether remote workers fired alongside others, who are all based in the same office, are considered to be part of the same large group of employees let go, and therefore entitled to higher severance packages.

"That would be an issue that legal counsel would raise," he said.

Clark Wilson LLP partner Andrea Raso said the key thing for employers to keep in mind is that employees are guaranteed privacy when they are laid off or fired.

This is why in-office terminations are typically done at the end of the workday, as staff are leaving, and often in a boardroom or a private office that gives the employee privacy.

"I recommend to clients who are doing layoffs and terminations that they give the employees an option of whether or not they want to return to their desks to collect their items, knowing that there may be still some employees around, and they may see them cleaning out their desk and have questions about that," she said. "Some employees want the ability to tell their coworkers themselves, but others do not."

When employees are terminated for cause, and there is a concern that they may be violent or verbally abusive to others, the employee could be ordered to leave the building, or escorted out, she added.

Failing to provide privacy during a firing could result in added ammunition in a wrongful dismissal lawsuit. The fired employee may first dispute that the employer has cause for the termination. On top of that, the employee could say that the employer did not respect privacy and that the firing was leaked to a co-worker who passed on the news to others.

"They employee could say, 'This has caused me stress and I'm entitled to a lump-sum award for damages for that mental distress,'" Raso said.

The post-firing follow-up that employers do with remaining employees is also an activity fraught with legal landmines, and not all situations call for the same type of communication, Raso said.

She said the entire company does not need to be alerted that individuals or groups of people have been laid off.

"It should really only be the people that interact with that individual, through work, or socially – for example, if their cubicle or office is beside each other," she said.

When employees are dismissed for performance issues that others are aware of, it is OK to send an email alerting staff that a certain person is no longer with the company and that the company wishes them well in the future.

That can protect the employer from any future employee claim that the employer has defamed the employee, she added.

gkorstrom@biv.com

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