Management & HR

The Main Types of Employment Termination in Quebec

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Oct 16, 2024 10:15 AM
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Whether linked to the employer or the employee, there are many reasons why a job may come to an end. The types of employment termination are equally varied, but have distinct legal implications. In this article, we will cover the main types of employment termination, namely: permanent layoff, collective dismissal, layoff and other specific types such as the end of a fixed-term contract. 

1. Permanent layoff 

At the employer’s initiative, permanent layoff definitively terminates the employment contract, mainly for economic, organizational or technical reasons. This type of termination is often used when a company is faced with a decrease in revenues, is restructuring or is automating its processes, rendering certain positions obsolete. 

In this context, the employer is obliged to provide a notice of termination of employment in accordance with the notice period provided for by law, failing which it must pay the employee an indemnity, i.e. monetary compensation. Important to note: Permanent layoff is not the result of any fault on the employee’s part, but of external circumstances related to the company’s economic health.

2. Collective dismissal 

This type of dismissal occurs when the employer simultaneously terminates the employment of 10 or more employees over a period of 2 consecutive months. This phenomenon occurs particularly when establishments close or undergo massive reorganization.  

Before carrying out a collective dismissal, the employer is required to send a notice to the Ministère de l’Emploi et de la Solidarité sociale, respecting the minimum periods imposed under the Act respecting Labour Standards. 

It must also send this notice to the CNESST and to the unions representing the employees concerned, where applicable. It is also required to post this notice in the establishment, in an easily accessible and visible location. 

Sending the notice to the Ministère does not exempt the employer from its responsibility to send a notice to each employee concerned, as it is required to do in the case of an individual layoff. The length of notice depends on the employee’s seniority, and must be given in writing to be valid. If the employer does not give notice, or does not give sufficient notice, it must pay the employees concerned an indemnity equivalent to their wages for the period not covered by the notice.  

3. Layoff

A layoff means the temporary suspension of the employment contract, often for economic reasons, with the possibility of the employee being recalled to work. The employment relationship is maintained during this period but the employee is not paid. If the layoff lasts longer than six months, it is regarded as a dismissal, triggering the employee’s right to compensation. 

In some sectors, such as seasonal employment, layoffs are common. However, the employer must respect the notice formalities for extended periods. 

4. Dismissal 

Dismissal is a measure that an employer takes to put a definitive end to an employee’s employment, usually for disciplinary or administrative reasons. However, the law prohibits dismissal without good and sufficient cause, which means that the employer cannot dismiss an employee without a valid reason. To justify dismissal, certain conditions must be met. 

  • Disciplinary grounds: The employer must, except in the case of a serious fault, give the employee the opportunity to improve. This usually results in a gradation of sanctions, meaning that the employee has been warned and given the chance to correct their behaviour. 
  • Administrative grounds: In this case, the employer must inform the employee of its dissatisfaction with performance or output. The employee must then be given a reasonable period to correct the situation or improve before more severe measures are taken. 

Dismissal without good and sufficient cause can also take the form of constructive dismissal. In this case, for example, the employer significantly changes the terms of employment, such as reducing the salary or responsibilities, or imposing geographical relocations that make the situation untenable for the employee, in the hope that they will voluntarily leave their position. 

In the case of a dismissal, the employer must give written notice of termination of employment to the employee, in accordance with the notice period provided for by law. If the employer does not give notice or does not give sufficient notice, the employee is entitled to monetary compensation, which corresponds to a sum paid in replacement of the notice period that was not respected. This indemnity is intended to financially compensate for the lack of notice. 

5. The end of a fixed-term contract 

Unlike open-ended contracts, fixed-term contracts end on a date established in advance. At the end of the contract, the employer is generally not required to give notice.  

Termination of employment: Comply with the law to avoid costs and disputes 

The types of termination of employment in Quebec vary, and each situation involves specific obligations for the employer and rights for the employee. Whether the termination is a permanent layoff for economic reasons or a dismissal on administrative or disciplinary grounds, proper management of terminations requires compliance with applicable laws and clear communication between the parties. It is essential for employers to follow the appropriate legal procedures to minimize the risk of disputes.  

Please don’t hesitate to contact our firm, Dunton Rainville LLP, so that we can help you meet your legal obligations and protect your rights, according to your situation.  
Sara Lajoie, Lawyer at Dunton Rainville
Sara Lajoie’s practice focuses primarily on labor law, occupational health and safety, and civil and administrative litigation. Ms. Lajoie holds a law degree from the Université de Sherbrooke and was admitted to the Bar in 2024. During her studies, Ms. Lajoie shone among her peers by winning the Lieutenant-Governor’s Youth Medal. She also participated in the Simulation des Nations Unies, an enriching experience that demonstrated her ability to navigate the debates of global diplomacy with ease, under the aegis of the Université de Sherbrooke. Prior to joining Dunton Rainville, Me Lajoie gained experience working in a criminal law firm as well as in a community justice center, allowing her to hone her legal skills. Her clear and persuasive communication, both written and oral, testifies to her ability to present arguments convincingly. She excels in the art of negotiation, while earning the trust of her clients.

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The Main Types of Employment Termination in Quebec

GettyImages-2165280482-1

Whether linked to the employer or the employee, there are many reasons why a job may come to an end. The types of employment termination are equally varied, but have distinct legal implications. In this article, we will cover the main types of employment termination, namely: permanent layoff, collective dismissal, layoff and other specific types such as the end of a fixed-term contract. 

1. Permanent layoff 

At the employer’s initiative, permanent layoff definitively terminates the employment contract, mainly for economic, organizational or technical reasons. This type of termination is often used when a company is faced with a decrease in revenues, is restructuring or is automating its processes, rendering certain positions obsolete. 

In this context, the employer is obliged to provide a notice of termination of employment in accordance with the notice period provided for by law, failing which it must pay the employee an indemnity, i.e. monetary compensation. Important to note: Permanent layoff is not the result of any fault on the employee’s part, but of external circumstances related to the company’s economic health.

2. Collective dismissal 

This type of dismissal occurs when the employer simultaneously terminates the employment of 10 or more employees over a period of 2 consecutive months. This phenomenon occurs particularly when establishments close or undergo massive reorganization.  

Before carrying out a collective dismissal, the employer is required to send a notice to the Ministère de l’Emploi et de la Solidarité sociale, respecting the minimum periods imposed under the Act respecting Labour Standards. 

It must also send this notice to the CNESST and to the unions representing the employees concerned, where applicable. It is also required to post this notice in the establishment, in an easily accessible and visible location. 

Sending the notice to the Ministère does not exempt the employer from its responsibility to send a notice to each employee concerned, as it is required to do in the case of an individual layoff. The length of notice depends on the employee’s seniority, and must be given in writing to be valid. If the employer does not give notice, or does not give sufficient notice, it must pay the employees concerned an indemnity equivalent to their wages for the period not covered by the notice.  

3. Layoff

A layoff means the temporary suspension of the employment contract, often for economic reasons, with the possibility of the employee being recalled to work. The employment relationship is maintained during this period but the employee is not paid. If the layoff lasts longer than six months, it is regarded as a dismissal, triggering the employee’s right to compensation. 

In some sectors, such as seasonal employment, layoffs are common. However, the employer must respect the notice formalities for extended periods. 

4. Dismissal 

Dismissal is a measure that an employer takes to put a definitive end to an employee’s employment, usually for disciplinary or administrative reasons. However, the law prohibits dismissal without good and sufficient cause, which means that the employer cannot dismiss an employee without a valid reason. To justify dismissal, certain conditions must be met. 

  • Disciplinary grounds: The employer must, except in the case of a serious fault, give the employee the opportunity to improve. This usually results in a gradation of sanctions, meaning that the employee has been warned and given the chance to correct their behaviour. 
  • Administrative grounds: In this case, the employer must inform the employee of its dissatisfaction with performance or output. The employee must then be given a reasonable period to correct the situation or improve before more severe measures are taken. 

Dismissal without good and sufficient cause can also take the form of constructive dismissal. In this case, for example, the employer significantly changes the terms of employment, such as reducing the salary or responsibilities, or imposing geographical relocations that make the situation untenable for the employee, in the hope that they will voluntarily leave their position. 

In the case of a dismissal, the employer must give written notice of termination of employment to the employee, in accordance with the notice period provided for by law. If the employer does not give notice or does not give sufficient notice, the employee is entitled to monetary compensation, which corresponds to a sum paid in replacement of the notice period that was not respected. This indemnity is intended to financially compensate for the lack of notice. 

5. The end of a fixed-term contract 

Unlike open-ended contracts, fixed-term contracts end on a date established in advance. At the end of the contract, the employer is generally not required to give notice.  

Termination of employment: Comply with the law to avoid costs and disputes 

The types of termination of employment in Quebec vary, and each situation involves specific obligations for the employer and rights for the employee. Whether the termination is a permanent layoff for economic reasons or a dismissal on administrative or disciplinary grounds, proper management of terminations requires compliance with applicable laws and clear communication between the parties. It is essential for employers to follow the appropriate legal procedures to minimize the risk of disputes.  

Please don’t hesitate to contact our firm, Dunton Rainville LLP, so that we can help you meet your legal obligations and protect your rights, according to your situation.