Electronic Arts Canada – How Layoffs Can Impact Your Termination Pay
A layoff is when an employer temporarily or permanently terminates an employee’s employment for reasons unrelated to their work performance. Usually, an employer lays off an employee to cut costs due to seasonal closure, a decline in demand for their products, or during an economic downturn. This article will discuss the termination pay of a laid-off employee and when employers owe an employee severance pay. It will also discuss how severance pay Ontario is calculated, and how a severance lawyer can help.
Electronic Arts Canada (“EA Canada”) is a wholly-owned subsidiary of the American video game company Electronic Arts Inc. (“Electronic Arts”). The video game giant, Electronic Arts, is known for developing industry-leading game series, including Battlefield, Need for Speed, The Sims, and Medal of Honour. Over the years, Electronic Arts has laid off employees for reasons ranging from redundancies in the market to restructuring aimed at reducing costs.
In May this year, the company laid off approximately a hundred consumer service employees who were working on FIFA 22. The gaming industry, long thought to be recession-proof, is witnessing an accelerated revenue drop. Experts predict a rapid fall in video game sales with consumers starting to limit their expenditures to necessities. With the recession expected to hit next year, the employees of major gaming companies such as EA Canada are preparing themselves for the worst.
What are the Termination and Severance Entitlements of a Laid-Off Employee?
A laid-off employee’s termination pay depends on the terms of their employment contract, statutory law and common law. Under the Employment Standards Act, 2000 (“ESA”), employees are entitled to termination or notice pay if employed for at least three months. An employee is entitled to receive a minimum of one week’s notice per year of employment, up to eight weeks.
Further, an employer who terminates the employment of fifty or more employees at their establishment in the same four-week period must give notice of termination. The notice period is at least:
- Eight weeks if the employer terminates more than fifty but less than two hundred employees;
- Twelve weeks if the employer terminates two hundred or more but less than five hundred employees; or
- Sixteen weeks if the employer terminates five hundred or more employees.
If the employment contract does not limit an employee’s notice pay to the ESA minimums, they will be entitled to common law reasonable notice. An employee is usually entitled to one month of common law reasonable notice for every year of service, up to a maximum of twenty-four months.
When do Employers Owe Severance Pay to Laid-Off Employees?
An employer terminating a long-term employee’s employment without cause may be required to pay them severance. Employees are offered termination pay as compensation for their losses, such as loss of seniority.
Under section 63 of the ESA, an employer severs the employment of an employee if,
- The employer dismisses the employee, refuses to continue employing the employee or is unable to continue employing them;
- The employer constructively dismisses the employee, and the employee gives their resignation in response and within a reasonable period;
- The employer lays off an employee for thirty-five weeks or more within a consecutive fifty-two-week period;
- The employer lays off an employee due to permanent discontinuance of business at an establishment; or
- The employer gives the employee a written notice of termination, the employee gives the employee two weeks’ notice in writing before resigning, and the employee’s notice takes effect within the statutory notice period.
An employee is entitled to termination pay after the employer severs their employment if they were employed for five years or more and
- The severance occurred due to the permanent discontinuance of all or part of the employer’s business at an establishment and the employee is one of fifty or more employees who had their employment relationship severed within a six-month period as a result; or
- The employer has a payroll of two and a half million dollars or more.
How To Calculate ESA Severance Pay Ontario
Severance pay in Ontario is calculated by multiplying the employee’s regular wages for a typical workweek by the total number of completed years of service and the number of whole months of employment divided by twelve for an incomplete year.
Under the ESA, the maximum amount an employer can be required to pay as severance is equivalent to one week of an employee’s regular wages for a period of twenty-six weeks.
Further, the regular wages for a regular workweek are calculated differently for employees without a regular workweek or those paid on a basis other than time. For such employees, the regular wages for a regular work week are deemed to be the average amount of regular wages earned by the employee for the twelve weeks prior to the date of occurrence of either of the following:
- The employee’s employment was severed; or
- If the employee’s employment was severed because of a layoff, the date on which the layoff began.
How a Severance Lawyer Can Help
You might be entitled to termination pay if you were laid off. A severance lawyer has the knowledge and experience to help you calculate your severance entitlements. This can include both ESA and common law entitlements.
A lawyer can help you take pre-litigation steps that may help you avoid a lawsuit, they will :
- assess your case
- discuss your legal options, and
- negotiate on your behalf with your employer to advance your case.
A severance lawyer is a trained professional with experience in navigating the legal system. They can use their knowledge of the law and legal system to help you reach your litigation goals.
A typical employment lawsuit involves different steps, such as the exchange of pleadings, mandatory mediation, examinations for discovery, pre-trial conference, and trial. A lawyer will explain the process, prepare you for each stage of the litigation and advocate on your behalf in court to maximize your chance of success.
If you have been recently laid off by your employer, you should contact a severance lawyer as soon as possible. You may be eligible for severance pay depending on the terms of your employment contract, length of service, and employment profile.
A lawyer has the knowledge and experience to help determine your severance entitlements. They can use their skills and expertise to negotiate with your employer and ensure you do not settle for less than your entitlements.
Further, if the matter proceeds to court, a severance lawyer will use their advocacy skills to outline the facts and advance a persuasive case for you. They will raise every legal issue, advance every argument, and ask relevant questions to help you get your desired results.
Contact Achkar Law
If you were laid off by your employer and require any assistance with severance entitlements upon termination, our team of experienced employment lawyers at Achkar Law can help.