Could Elon Musk’s Twitter layoffs violate Canadian law? Experts weigh in

As Twitter begins its global layoffs, Canadian law experts say the moves would violate Canadian and Ontario laws depending on the wording of employee contracts and whether Canadian employees are given sufficient notice or severance pay.

Twitter temporarily closed its offices and cut workers’ access to internal systems on Friday after telling employees they would be informed by email later in the day about whether they were being laid off.

Musk is looking to cut around 3,700 Twitter staff, or about half the workforce, as he seeks to slash costs and impose a demanding new work ethic, according to internal plans reviewed by Reuters this week.

The Canadian Press also reported that Paul Burns, managing director of the company’s Canadian operations, and Michele Austin, Twitter’s director of public policy for the U.S. and Canada, announced their departures from the San Francisco-based tech giant on social media on Friday.

Amid the cuts, Twitter is facing questions over whether the layoffs could fall afoul of labour laws.

While an employer always has the right to terminate an employee if proper notice or severance is given. Notice and severance will vary depending on the employee’s role and experience. A mass layoff of a workforce is different. In general, layoffs are governed by the employment contract and layoff clauses will appear in contracts where layoffs are more likely, for example, the auto industry. Otherwise, says Muneeza Sheikh, a lawyer and senior partner at Levitt Sheikh, an employment and labour law firm in Toronto, “the right to layoff is not automatic.”

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“What a lot of employers don’t know, and I’m hoping Twitter knows, is that ultimately, in order to render a lawful layoff, you have to have an employment contract or agreement that gives you as an employer the right to layoff,” said Sheikh.

The founder of Toronto-based Smith Employment Law, Waheeda Ekhlas Smith, says she doesn’t know if Twitter has given notice that they were about to do these mass layoffs “because of the fact that it seems like it came out of the blue.” But the Canada Labour Code does have termination rules in place that employers of companies like Twitter need to be aware of.

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“If these rules aren’t followed…then that’s running afoul of the Canadian law,” said Smith.

“If it’s a straight termination, then the only determination for the Canadian employees would be to quibble over is if (the severance pay) is enough or not?” said Sheikh.

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Samfiru Tumarkin LLP, a law firm, explains on its website that “in Ontario, severance pay is a minimum of one week’s pay after three months of employment, up to a maximum of 24 months’ pay for a full severance package. This amount is arrived at through Ontario’s Employment Standards Act (ESA) and our common law court system.”

Smith says that “depending on how long these employees have been there, they could be entitled to more than the minimum standards, (possibly) several several months.”

Twitter is already facing a proposed class action lawsuit claiming the layoffs are imminent and will violate U.S. and California laws if employees are not given advance notice or severance pay.

However, there has been no reports of a similar lawsuit from Canadian employees — yet.

There are legal options available though, according to Smith, and it all depends on how the layoffs are done.

“People affected should get some legal advice (first),” she said.  “The kind of advice they might be getting often starts with a demand letter from an employment lawyer to Twitter Canada.”

A demand letter can be sent to the employer requesting proper severance is provided based on the employee’s lawyer’s review of the facts.

If an acceptable response is not received from the employer, Smith says people have the option to file a statement of claim for a wrongful dismissal lawsuit.

— With files from Reuters and The Canadian Press