Last week, Twitter locked hundreds of its workers out of its computer systems, once again with no notice and no communication from Human Resources (“HR”). When one employee tweeted at Elon Musk, Twitter’s new Chief Executive Officer, to see whether he was still an employee after nine days of silence from HR, Musk publicly commented that the employee “did no actual work” and “claimed as an excuse that he had a disability that prevented him from typing.” The employee received an email confirmation that he was no longer employed during the tweet exchange.
The dispute is the latest in a series of employment-related issues since Musk’s $44 billion takeover of Twitter. In fact, the incident echoes Musk’s steps from last October, when, shortly after his Twitter takeover, many Twitter staff had their access to company-wide systems suddenly suspended. At the time, Twitter’s top executives, thousands of its contractors, and half of its 7,500-person payroll unceremoniously discovered they had just been laid off. Some were later asked to return to their old jobs after Musk’s advisors realized that the cuts may have been too deep.
In mid-November 2022, Musk sent an email to his remaining employees, in which he emphasized the need to be “extremely hardcore”, including by “working long hours at high intensity” to “build a breakthrough Twitter 2.0”, and asked workers to click “yes” on a link provided in the email if they want to be part of the “new Twitter”. Employees who did not do so by a certain deadline would be understood to have resigned and would be provided with three months of severance pay. The ultimatum led to the resignations of approximately 1,200 additional employees.
Many of Musk’s moves in questioning an employee’s disability and manifesting “Twitter 2.0” could run afoul of Canadian and Ontario employment and human rights laws, which generally offer more robust protections for workers than jurisdictions within the United States.
Constructive Dismissal Risks
The dizzyingly rapid implementation of multiple broad-sweeping changes at Twitter, including suddenly locking employees out of the company’s computer systems and directing employees to modify their schedules indefinitely to work overtime hours, could expose the company to significant constructive dismissal risks.
Constructive dismissal describes situations in which an employer, without having explicitly dismissed an employee, unilaterally and substantially changes a fundamental term of employment, without consideration. Canadian courts have previously found that major, unilateral changes to an employee’s responsibilities, wages, hours of work, location of employment, and/or title constitute a constructive dismissal.
Implementing changes that prevent the employee from fulfilling their employment conditions—such as locking them out of the computer system—can also be a form of constructive dismissal. The same goes for providing employees with ultimatums, such as, “accept the change or resign”, and for cases where employees are laid off without language in their employment contracts allowing for a layoff. One or all the above could apply to Twitter’s laid off employees.
A claim of constructive dismissal can leave an employer vulnerable to potentially costly consequences. An employee who has been constructively dismissed will be entitled to receive damages as though they were wrongfully dismissed. Further, if the employee was dismissed in a manner that was dishonest, misleading or unduly insensitive, the employer may be liable to pay additional damages for its bad-faith conduct.
Termination and Notice Requirements for Mass Layoffs
In Canada, non-unionized employees are generally not entitled to any termination or severance pay if they resign. However, the resignation must be voluntary. An employee may be considered to have been “forced” to resign through a constructive dismissal, as discussed above, and may have termination entitlements.
Additionally, under Canadian and Ontario laws, Musk’s blanket offer of three months of compensation is unlikely to satisfy the Twitter’s obligations in the context of a mass layoff.
Employment standards legislation across Canada stipulate special rules with respect to the minimum amount of termination notice and/or termination pay required when an employee has been dismissed as part of a mass layoff. Generally, employers are obligated to provide workers with more termination pay when they are let go as part of a mass layoff.
In Ontario, when 50 or more employees are dismissed within a four-week period, the Employment Standards Act determines the minimum notice period by the number of employees who have been laid off, to a maximum of 16 weeks, as opposed to the length of one’s employment, to a statutorily mandated maximum of 8 weeks (where an employee was dismissed but not as part of a mass layoff).
Under Ontario law, longer-service Twitter employees may also be eligible for severance pay in addition to termination pay.
Human Rights Liability
Under Canadian and Ontario human rights law, an employee has the right to be free from discriminatory harassment, which may involve making unwelcome remarks or jokes on the basis of a protected human rights ground, including but not limited to the ground of disability, race, religion, sex, and gender. Under human rights legislation, “employee” is interpreted broadly and includes contractors.
Employers must also take workers’ requests for accommodation in good faith. In Twitter’s case, Musk publicly denigrated the employee’s work ethic and suggested the employee had pretended to have a disability as an excuse to not work. While Musk walked back his statements after speaking with the employee (who had publicly disclosed that he had muscular dystrophy), in Canada, Musk’s comments would have exposed him to human rights liability. Similarly, where the harassment results in a poisoned work environment or where the individual engaging in the discriminatory harassment is part of the organization’s management or “directing mind”, the organization can be held vicariously liable.
Takeaways for Employers
Employers with operations in Canada should take care not to expose themselves to liability by copying steps that might otherwise pass in the United States or elsewhere. Specifically, employers should ensure that the changes they wish to implement in the workplace, and the manner in which they want to implement those changes, do not expose them to constructive dismissal claims. Otherwise, the employer may find themselves paying damages as though they have outright dismissed the employee(s), and potentially more for bad-faith conduct.
Employers should ensure they comply with the relevant employment standards legislation when letting employees go, as different factors can affect the minimum amount an employee must be paid, such as where an employee is effectively dismissed as part of a mass layoff.
Finally, employers should properly communicate with employees with respect to their layoffs, dismissals, and accommodations. Leaving employees in the dark, not consulting with employees when required, or jumping the gun are general missteps employers might take that can open them up to significant liability, as well as negatively affect the workplace culture and employee morale.