Why are tariffs from the U.S. impacting Canadian jobs?
Since the inauguration of United States President Donald Trump in January, the President has consistently spoken about his intention to place tariffs on goods from Canada, a version of which were imposed on March 1, 2024. With the threats continuing as Canada imposes retaliatory tariffs, many are warning that this could be the start of a protracted trade war that could have a significantly negative effect on the Canadian economy.
This effect is already being felt. 50 percent of Canadian employers are already reducing production or terminating workers in anticipation of the tariffs, and more than three-quarters are reviewing operations with an eye towards cuts should Trump escalate or draw out the tariffs. Even if the tariffs are not imposed in full – which appears unlikely given the Canadian’s government’s countermoves – their constant threat may well still have a constricting effect on the Canadian economy.
Can your employer lay you off temporarily due to tariffs?
How can Canada’s employees prepare for this truly unpredictable time? There are a few things you can do to keep your elbows up:
- Review your employment contract
Financial hardship generally means downsizing, resulting in mass terminations or layoffs. It is a good idea for employees to see if their employment is governed by a written contract, and what that contract says. Your contract may govern how much severance pay an employer owes you upon termination without cause, and that would apply in the case of a mass termination.
- Beware of temporary layoffs
Some employers may decide that the best way to deal with the economic upheaval is to place some workers on a temporary leave of absence, called a layoff. Under the Employment Standards Act, an employer can lay off an employee for 13 weeks straight, after which it would be treated as a termination.
However, an employer cannot exercise this right unless it is allowed under their contract with the employee – otherwise it would be treated immediately as a termination, called a constructive dismissal. A good idea is to review your employment contract to see if your employer has the right to place you on a temporary layoff.
- Do not sign anything without consulting a lawyer
This is generally good advice, but even more important when facing mass terminations due to downsizing. Employers will often put pressure on employees to accept severance packages or layoffs by claiming that everyone else is taking them, or that they are financially necessary.
However, you may well have rights beyond what your employer claims, and even beyond the plain language of your contract. Most importantly, economic hardship does not absolve employers of their obligations to provide notice, pay in lieu of notice, and severance. The best course of action if you are terminated or laid off is to immediately review the situation with an employment lawyer to ensure that you are fully aware of your rights.
How can Whitten and Lublin Help?
Trump’s economic attacks have significant political and social implications for Canada, and unfortunately it looks like things will get worse before they get better, but that does not mean that employees need to be forgotten in the chaos. If you are an employee who has been terminated from their employment, Whitten & Lublin is here to assist you. Contact us online or by phone at (416) 640-2667.
Author – Aaron Zaltzman
