As a result of the ongoing tariff war, many employees are left with employment uncertainty. It is important for all employees to understand your rights in economic uncertainty and what protections are in place.  With the ever-shifting tariff rates on steel and aluminium, and on Canadian automobiles, the auto sector and related industries, and the over 500,000 Canadians whose livelihoods depend on it nationwide, is under special threat.

However, there are certain considerations and protections for automotive workers during this time.

Understanding Layoffs vs. Terminations

In response to the challenges, employers may consider two primary approaches to managing costs:

• Temporary Layoffs: Temporary suspensions or reduction of work or hours, with the expectation of recalling employees within a certain timeframe.
• Terminations: Permanent stoppage of the employment relationship.

If you work in the automobile industry, it is crucial for you to understand your rights and entitlements under each scenario.

Unionized Workers: Rights Under Collective Agreements

If you are a unionized worker in Ontario’s automobile manufacturing sector, you are covered by a collective agreement. These agreements generally outline specific provisions regarding layoffs and terminations. Engage with your union representatives to ensure all entitlements laid out in the collective agreement are received.

Non-Unionized Employees: Temporary Layoffs

If you are a non-union employee facing a temporary layoff, it is essential to consider the following:

1. Employer’s Right to Layoff: Employers must have a contractual right to impose temporary layoffs. Without an explicit clause in the employment contract permitting such action, a layoff could be deemed a constructive dismissal, entitling you to termination entitlements.
2. Duration of Layoff: The Employment Standards Act, 2000 (“ESA”) specifies maximum durations for temporary layoffs. Exceeding these durations without proper recall may result in the layoff being considered a termination.
3. Recall Rights: You should be informed about your rights upon returning to work. Significant changes to the terms of employment upon recall could also be considered constructive dismissal.

Non-Unionized Employees: Terminations

If you are terminated, review your employment contract to see if there are enforceable termination clauses. Without a proper termination clause, you are entitled to reasonable notice, which can be much more than the minimum standards set by the ESA. It is also important to consult a lawyer before signing any severance documents.

Mass Terminations: Special Rules Under the ESA

There are special considerations if an employer in the automobile industry terminates 50 or more employees at a single establishment within a four-week period. These special rules generally provide greater entitlements than those in regular termination cases, even if your contract includes enforceable termination clauses.

The notice period in the event of a mass termination does not depend on tenure but rather on the total number of employees being let go:

• 8 weeks if terminating 50 -199 employees;
• 12 weeks if terminating 200 – 499 employees;
• 16 weeks if terminating 500 or more employees.

However, these special rules do not apply in the following situations:

• If the terminations involve 10% or less of the employees who have been working at that establishment for at least three months;
• If the terminations are not caused by the permanent closure of part or all of the business at the establishment.

Final Thoughts

U.S. tariffs present significant challenges for workers in Ontario’s automotive sector. Whether unionized or non-unionized, you need to understand your rights and the legal frameworks surrounding layoffs and terminations. Engaging with union representatives or seeking legal counsel can provide clarity and ensure that you receive your legal entitlements.