What Is Redundancy In Employment Law?

The pandemic can be accurately described as the point at which a lot of businesses started their downward trajectory. Some businesses barely got by but stayed operational, while others had to close down immediately or lay off some of their staff in order to stay afloat. Now, in general terminology, people tend to call it layoffs or to get the short end of the stick (as the saying goes); however, since the law is a precise endeavour, it tends to utilise a much more specialised term for layoffs that are brought about by such factors which diminish the requirement for an employee. This is all you need to know about redundancy in employment law. 

As one of the best employment lawyers in Toronto, Dharsi Law is your partner for justice: whether you feel like your termination was on unjust grounds, was biased or motivated by subjective factors, or even in the case of redundancy, our expert lawyers can be of help, allowing you to safeguard your legal and financial rights, and to stay on top of your personal finances. Which is why here is everything you need to know about redundancy in employment law. 

Redundancy According To Employment Law

While redundancy usually means ‘the state of not being useful or needed’, the law takes a much similar approach to that. Within the ambit of employment law, redundancy is essentially stated as ‘being let go from a place of employment due to the employee not being needed anymore.’ With this statement, you can begin to have an idea about redundancy, and what are the many particulars about redundancy that separate it from other situations involving layoffs. 

Let’s look at some examples of situations where the redundancy description might be apt. 

1. If a bank or any organisation plans to close a particular branch or office in one locality, the employees will be considered’ redundant’ if it does not intend to retain any employees for any other branch or office.
2. If a company stops producing or offering a certain product or service, the people or employees associated with said product or service will be made redundant. 
3. In certain cases, when a business feels the need to reduce its workforce owing to financial or economic constraints, the employees in the periphery are usually the first ones to be let go. In this case, this act will be considered redundancy. 
4. Automation and the new age of artificial intelligence is an important example of redundancy. Many businesses have essentially replaced employees with automated processes or AI. The employees laid off in such cases will be considered to have been made redundant. 
5. Redundancy is also applicable when a factory or business relocates its operations and functions to another state or country, in which case, the employees in the current office or location will be made redundant. 

While redundancy may seem like an obvious concept of the law, its still important to make distinctions with other cases, including, 

1. If an employee is fired or let go owing to their underwhelming performance or for any other reason related to their performance at the workplace, this will not be considered redundancy. 
2. Several businesses actually partake in this particular example of scenario, which is NOT considered redundancy: replacing an employee with another employee on a lower rate of pay or on a lower salary, with reduced perks and privileges. 
3. While this is illegal and goes against the rules and regulations as set forth by the ESA Act and many other employee protection laws, if an organisation or a business has a certain bias against or malice towards a particular employee or considers their recent activities to not be in the best interests of the business (for instance taking too much paid time off), they may be let go. Once again, this does not fall in the ambit of redundancy; therefore, any claims or benefits otherwise arising from such a claim may not be applicable to this situation. 

Redundancy in Ontario, Canada

While redundancy is a common terminology in legal and corporate language all across the world, in Canada, redundancy is not considered common in both realms. This means that it is not something that isn’t found in Ontario or Canada, but rather, it is known by a different name. In Ontario and other provinces throughout Canada, what is described above as ‘redundancy’ is called ‘termination due to lack of work’ or, once again, in common linguistic terms, layoffs. It is, therefore, important to note here that while the title or the name of the situation may change, all the legal aspects and corporate aspects stay the same for redundancy as they do for ‘termination due to lack of work’. 

Under the Ontario ESA Act

In Ontario, the particulars of redundancy or ‘termination due to lack of work’ are governed under the 2000 ESA Act, which lays out the customary requirements and obligations that need to be observed by both the employer and the employee should such a situation arise. 

For starters, the ESA Act binds the employer to provide ample notice to the employee should a situation of such nature arise. While the particulars may differ, the length of the notice period always corresponds to the length of time served with the company. For example, if an employee has been with the company for five years, the company is then bound to provide the employee with five weeks of notice or statutory redundancy pay in lieu of unprovided notice. 

Beyond notice or statutory redundancy pay, employers may also be asked to provide the employee with severance pay. Under the Ontario ESA Act, severance pay can be as much as 26 weeks’ worth of remuneration if the employee has been with the company for a considerable period of time. Employers are also supposed to continue whatever benefits or medical coverage the employees are entitled to throughout this notice period, until the employment has officially ended. Should that not be the case, the employer would then be asked to cover the value of those benefits if availed by the employee. 

Conclusion

While redundancy may seem like somewhat of a concern, the law ensures that an employee’s financial health or economic situation isn’t affected should the business experience a snag or some rough patch. Should you be on the other side of such an unfortunate situation, you need not worry, and instead, you should look into a legal service that represents and secures your financial and professional rights, and ensures that you are not left without a sizeable amount in lieu of the unfortunate redundancy. 

Dharsi Law: Best Employment Lawyers In Toronto!

Redundancy or in Canada ‘termination due to lack of work’ fall into the ambit of employment law, and when it comes to employment law, you’re better off not taking any risk at all, especially when it comes to litigation. Dharsi Law’s services, their track record and their insistence on nothing but excellence guarantee a positive outcome for your case. Firstly, they provide comprehensive legal services for all matters related to employment law; contract disputes, contract law advice, and workplace discrimination claims are their specialties, and their track record for these claims is simply indisputable. All in all, Dharsi Law promises a worry-free approach to litigation.