Collateral Damage of Trump's Tariffs: Layoffs and Termination

Given the impending trade war between the U.S. and Canada involving potentially escalating exchange of tariffs (starting with a 25% tariff on either side), there will likely be far-reaching economic and business implications in Canada. Both employers and employees would need to be prepared to navigate these challenges.

Here are some important things to know and do, broken down by perspective:

For Employers (or Businesses)

1. Understanding the Impact of Tariffs on Your Supply Chain

- Most companies will quickly (if not have already done so) assess how Tump’s 25% tariffs would affect the cost of goods imported from the U.S. (e.g., raw materials, components, or finished products), although the general implication is that it could lead to decreased U.S. demand for Canadian goods and services exported across the border. To this end, if a businesses foresees significant financial operational disruptions, it may very well turn next to assessing whether there is a need to restructure or downsizing its workforce. If so, it is important to:

- - consult with an employer lawyer in Ontario to review options available, whether it be slight and reasonable modifications to an employee’s compensation amicably negotiated (including with changing employment contracts), temporary layoffs, or termination of employment. If layoffs or terminations are necessary, it is crucial to review any existing employment contracts to ensure there is legal permission stipulating the right to place an employee on a temporary layoff (and be sure to adhere to the requirements in the Ontario Employment Standards Act, 2000). Likewise, before embarking on a single or multiple termination of employment, ensure there is legal permission to do so in the form of a a valid and forceable termination clause in the employment contract. If so, ensure (with the help of an experienced Canadian employment lawyer), you provide the fair and appropriate severance package to an employee to assist during what could be a tumultuous period.

2. Investigating Government Support Programs

- - The Ontario government and Canadian government may offer support programs to businesses affected by trade wars (e.g., subsidies, loans, or relief funds). All employers that will be impacted by the tariff war (including small businesses) yourself with these programs to ensure your business can survive and adapt.

(B) For Employees

1. Understand Your Rights in the Event of Job Loss or Reduced Hours

- Familiarize yourself with your employee rights under Ontario employment law, and above all, determine if you signed an employment contract with your current employer. If so, it may be time to brush up on that employment contract and get a proper legal consultation with an employment lawyer. If your employer cuts jobs (termination), reduces hours, argues a frustration of employment, or implements temporary layoffs due to the effects of tariffs, you should understand severance pay, termination notice, and the Employment Insurance (EI) benefits available to you.

2. If Laid Off orTerminated, Do Not Sign Without Employment Lawyer Consultation

If you are a non-unionized Canadian employee concerned about widespread temporary layoffs and terminations of employment caused by economic disruptions from Trump’s tariffs, one of the most important considerations is not to sign anything layoff letter, termination letter, or severance package. As always, you should take your time to review all termination documents carefully with an experienced Ontario employment lawyer, so you can find out about your entitlements and plan your next move. This will ensure you understand all of your options and next steps before you sign away your rights, especially in a severance package (termination letter and legal release).

Both employers and employees should maintain flexibility and adaptability in response to significant trade policy changes like a tariff war. For employers, it’s about securing the business’s survival and minimizing the impact on employees, while employees should be proactive about protecting their financial and employment interests in times of uncertainty, including by reviewing an employment contact or severance package with an Ontario employment lawyer. Communication and awareness are key to navigating these challenges effectively.

Were you placed on a Temporary Layoffs or Wrongfully dismissed? Our Toronto employment law firm can review your situation and advise you of potential next steps in the event that you were wrongfully dismissed, get a severance package review or negotiate your severance package.

Book a Consultation with an Employment Lawyer in Toronto

At Bune Law, we understand and are familiar the complexities of workplace law and are committed to helping both employers and employees navigate the significant challenges caused by Trump’s tariffs and Canada’s response. Whether you are an employer or employee dealing with temporary layoffs or termination of employment, need to respond to a wrongful dismissal or constructive dismissal, or simply need guidance on your rights and obligations for a severance package review and negotiation, our experienced employment lawyer is here to assist you.

Book a confidential consultation with our Toronto employment law firm to protect your legal rights to understand your options and protect your rights.

Why Choose Bune Law When You Need an Ontario Employment Lawyer?

- Experience in all areas of workplace law, including wrongful dismissal claims, constructive dismissal claims, severance package reviews, severance package negotiations, discrimination and human rights disputes, and employment contract reviews, including navigating the important issue between just cause vs. wilful misconduct in Ontario employment law.
- Proven track record of successfully resolving workplace disputes through negotiation, mediation, and employment litigation.
- Compassionate and personalized approach to each case, ensuring tailored solutions that meet your specific needs.

If you need a Toronto employment lawyer who is committed to delivering strong results and proactive solutions, please contact Bune Law online or by phone today at 647-822-5492.