HR Practices in a Recession: Exploring the Options OMHRA: September 17, 2009

3 Union vs. Non-Union Options More control over non-union employees Measures are often directed at non- union employees Collective agreement will largely dictate measures that can be used

4 alternatives to termination Cost Cutting: reduced or time-limited health benefits training and development restrictions reduced travel budgets

5 alternatives to termination Cost Cutting: demotions salary freezes bonus controls

6 alternatives to termination Maintaining Staffing Levels: vacancy management hiring freeze redeployment

7 alternatives to termination Working Hours: reduced work hours work sharing overtime control managing absenteeism

8 alternatives to termination Staff Reductions: temporary lay-offs voluntary unpaid leaves voluntary retirement

9 alternatives to termination Be Careful of Constructive Dismissal! unilateral changes:  on consent  on notice  with consideration otherwise, potential constructive termination of employment

10 alternatives to termination Considerations: impact of constructive dismissal employee’s duty to mitigate by accepting the change

11 alternatives to termination Duty to Mitigate in a Recession: reason for change manner in which change is communicated one employee or several affected

12 alternatives to termination Overall Questions: can it be seen as humiliating? is it an attempt to avoid severance obligation?

13 alternatives to termination Cost Cutting: potentially lesser impact employees may be more amenable can provide significant savings don’t be short-sighted

14 alternatives to termination Cost Cutting: is it humiliating? fundamental? disproportionate impact on certain employees? pay increases a fundamental term of employment?

15 alternatives to termination Demotions: in context of restructuring coupled with offer of severance again…mitigation issues morale issues

16 alternatives to termination Redeployment : moving employees to open positions terms of employment – stay the same or based on position union cooperation voluntariness important

17 alternatives to termination Reduced Work Hours/ Work Sharing: shared amongst several employees Work Sharing 2009 – Service Canada voluntary participation what if they don’t agree?

18 alternatives to termination Reduced Work Hours/ Work Sharing: back to normal after the recession humiliating? potential claims

19 alternatives to termination Overtime Control and Absenteeism: assertively managing absences to avoid overtime managing strenuous workloads wellness programs changing expectations re: work outcomes

20 alternatives to termination Temporary Lay-offs and Unpaid Leaves : lay-offs per Employment Standards Act in employment contract or collective agreement? common practice? if not, deemed termination at common law

21 Temporary Lay-offs and Unpaid Leaves : practical risks/rewards morale issues timing the layoff alternatives to termination

22 Voluntary Retirement : human rights concerns individually targeted available to all employees? what about key employees alternatives to termination

23 basic legal framework

24 basic legal framework Types of Termination Payments: Employment Standards Act: notice/pay in lieu of notice severance Common law: reasonable notice

25 basic legal framework Employment Standards: minimum only employee can’t agree to less must continue all benefits and forms of compensation

26 basic legal framework Common Law: bridge between jobs

27 basic legal framework Common Law: factors for notice period: length of service position age no standard formula

28 basic legal framework Impact of Employment Contract: can establish notice period governs on termination limits exposure and need to litigate

29 structuring the package

30 structuring the package Structure: working notice vs. pay in lieu lump sum payment vs. salary continuance

31 structuring the package Working Notice or Pay in Lieu: working notice rarely works demoralized employees aren’t productive pay in lieu best option

32 structuring the package Making Working Notice Work: more than one person affected retention bonus resignations during working notice

33 structuring the package Lump Sum vs. Salary Continuance: length of the notice period <4 months’ pay as lump sum prospects of re-employment clean break

34 structuring the package Salary Continuance: incentive to find new employment bonus on alternate employment definition of alternate employment confirmation of employment status

35 structuring the package Assistance with Mitigation: providing reference letters offering outplacement counselling

36 strategy

37 strategy Reductions in Force: using formulas based on position bump up for age

38 strategy Cost Savings Can be Risky: some employers just giving ESA minimum employees may be more likely to litigate may face class actions at least give a small top up

39 strategy Negotiating: leave room to negotiate time can be your best defence negotiate only after signing date for all employees

40 strategy Employees on Leave: using restructuring to get rid of employees on leave impact of media hype legal risk – ESA and human rights when to notify the employee – timing is everything

41 strategy What To Ask For: signed release restrictive covenants  non-solicitation  confidentiality

42 delivering the news

43 delivering the news how to address reductions in force when and how to deliver the news minimizing the pain and uncertainty

44 after the termination keep notes of the meeting provide a timely ROE cause = M (dismissal) without cause = K (other)

45 after the termination Unconditional: letter of reference (at the termination meeting) ESA payments even if negotiating outplacement counselling

46 Questions: