How to be ‘fair and equitable’ with layoff compensation packages

'Vancity honestly has managed the situation better than a lot of other employers,' says B.C. employment lawyer

How to be ‘fair and equitable’ with layoff compensation packages

Vancity’s president and CEO announced last week that the credit union is laying off 200 employees, or 7 percent of its workforce, promising “comprehensive, fair and equitable” compensation packages to those who lose their jobs.

Those packages include extended health, dental and insurance plans and Employee and Family Assistance Program services for three months after employment ends.

Also, employees who were laid off on June 13th, the day of the announcement, received an additional month of TELUS Health Virtual Care services, Vancity said.

“Our employees are the heart of Vancity, showing up every day to support our members and communities, so the decision to restructure was incredibly difficult,” president Wellington Holbrook said in the statement, before adding that the cuts are necessary for growth and maintaining member service.

“Decisions on where and how to make reductions were taken with great care and consideration,” he continued. “We gave similar care to providing a comprehensive, fair and equitable package of compensation, health and wellbeing benefits and career supports.”

Tailor-made compensation packages

By being proactive with announcements, and offering across-the-board extended coverage to laid-off employees, Vancity’s approach is an example of what to do right during layoffs, says Jenson Leung, employment attorney with KSW Lawyers in Vancouver.

“Vancity honestly has managed the situation better than a lot of other employers already,” says Leung. “All of those are steps that certainly help from an optics standpoint, and it's also something that they don't necessarily need to do proactively, from a legal perspective.”

The key to being fair and equitable while still considering business needs is assessing each employee’s entitlements individually, Leung says, adding that this process should be done prior to notifying employees, and ideally with legal counsel who will not only help negotiate payouts, but can also mitigate employee relationship breakdowns and any other potential pitfalls.

Avoiding human rights liabilities from layoffs

“It is never easy for an organization to terminate a significant number of employees,” says Leung.

“But the thing that I like about what Vancity has done in this situation is that they've tried to do it in a way that doesn't come across as unusually heartless or emotionless.”

Even if termination clauses are in place, there can still be vulnerabilities to litigation, he says, which is why the individual approach is so important.

“What someone is potentially owed is going to depend on the individual situation, it’s going to depend on the contract that we're dealing with, if any, and it's going to depend on the specific factors around that employee,” says Leung.

“Even if a company has a strong termination clause that's been drafted by a lawyer that knows what they're doing, that doesn't necessarily mean that that's the be-all and end-all if they suddenly terminate an employee.”

When considering laying off an employee, employers should be looking at many various factors; for example, if they have recently made a bullying complaint or disclosed a pregnancy, he says.

“It's not necessarily the case that just because someone has a protected human rights ground, that they are immune to termination,” says Leung. “It's just that in those situations, employers do need to proceed a lot more delicately and dot their I's and cross their T's.”

Optics versus bottom line: who decides what’s ‘fair and equitable’?

The layoffs at Vancity affect around 30 to 35 unionized employees, according to CBC News. But the B.C. General Employees' Union, which represents them and almost 800 other Vancity employees, said the layoffs were made “completely without consultation” – an allegation which Holbrook denied, telling BC Today that Vancity has been having open conversations with employees “for some time,” CBC News reported.

Regardless of intent, continuing employees’ benefits and providing access to other support during terminations is “a good thing to do, to put it bluntly,” says Leung.

“It is a relatively nominal cost in most cases to the employer, but it makes a significant difference to those employees and their families, to not have their extended benefits suddenly cut off, and I think that at the end of the day, whenever an employer does make that sort of step, I think it does go a long way to getting some goodwill from the employees.”

 

 

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