Canada: The Economic Crisis And Collective Dismissal Ten (10) Golden Rules To Follow In Quebec

Last Updated: May 30 2009

In the current economy, many Quebec employers are faced with the difficult decision of closing their establishments or dismissing some or all of their employees. The purpose of this bulletin is to provide you with ten (10) golden rules to be followed to ensure that dismissals will be made at a minimum cost and in accordance with the Quebec legislation. While some of these rules apply to unionized employees, this bulletin will address only non-union employees. The ten (10) golden rules are as follows:

1. The Quebec Labours Standards Act states that the termination of ten (10) employees or more in the same establishment, within the course of two (2) consecutive months, constitutes a "collective dismissal", requiring the issuance of a collective dismissal notice within a stipulated period.

Exception: the only types of employees excluded from the collective dismissal are those with less than three (3) months of uninterrupted service, with a fixed term contract which expired, who have committed a "serious fault", who are students who work during the school year pursuant to a job instruction program approved by the Ministère de l'éducation, du sport et des loisirs, or who are Senior Managerial Personnel.

2. You must provide each dismissed employee with a minimum individual termination of employment notice as follows:

3. If the termination is part of a collective dismissal, you must provide each employee affected by the collective dismissal with a specific minimum collective dismissal notice as follows:

If you do not give the notice of collective dismissal in the period stipulated above, the Labour Standards Act stipulates a fine of $1,500.00 per week.

4. Non-union employees are also entitled to notice of termination under the Civil Code of Quebec. The length of this notice depends on various factors, such as the employee's number of years of service, age, position, income, availability of alternative employment, etc. There is no formula used to calculate notice, although rough rules of thumb (provided as starting points only) include the following:

a. two (2) to three (3) weeks per year of service for clerical, line workers, etc.;

b. three (3) to four (4) weeks per year of service for technical [non professional] employees, line supervisors, etc.; and

c. one (1) month plus per year of service for managerial, professional employees, etc.

5. One piece of good news: these notices are not cumulative. Only the highest level of applicable notice has to be provided, inclusive of the others, as long as all of them are detailed in the written notices. Moreover, these obligations can be discharged by working notice, pay in lieu of notice (also known as a "termination indemnity"), or any combination of the two, at the employer's discretion.

6. If you decide to provide pay in lieu of notice, the amount due to the employee is equal to the usual pay rate the employee would have been entitled to for the notice period. Overtime does not have to be taken into consideration.

7. The termination indemnity, where applicable, must be paid at the time of the dismissal and you must ensure that the employee receives at the same time all accrued and outstanding sums owing to him or her, such as wages, overtime, vacation indemnity (4% or 6%), etc.

8. The collective dismissal notice must be posted in an easily accessible location in the establishment concerned and must contain the following information:

  • the name and address of the employer or the establishment concerned;
  • the activity sector;
  • the name and address of the employees' association (where applicable);
  • the reason for collective dismissal;
  • the planned date of the collective dismissal; and
  • the number of employees who may be affected by the collective dismissal.

9. The notice of collective dismissal must also be sent by mail, effective from the date of its mailing, to the Minister of Employment and Social Solidarity, with copies to the Labour Standards Commission, to the accredited association representing the employees (where applicable), and to each and every employee subject to the collective dismissal.

10. The Minister of Employment and Social Solidarity may also require that you participate in establishing a reclassification committee when fifty (50) or more employees are affected by the collective dismissal. The Minister may agree on your contribution of up to fifty percent (50%) of the operating costs of the reclassification activities. However, failing such agreement, the Government may determine this contribution by regulation.

The ten golden rules are just the beginning of the analysis, and qualified legal counsel should be consulted to assist in the preparation of appropriate termination arrangements.

The foregoing provides only an overview. Readers are cautioned against making any decisions based on this material alone. Rather, a qualified lawyer should be consulted.

© Copyright 2009 McMillan LLP

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