Is it legal to lay off a worker on maternity leave?

The Question

I am a help desk supervisor in a big company. I have been on maternity leave for about a year. Two weeks before my scheduled return to work, I was informed that, because of some restructuring within the organization, my role is changing and that I have the option to return or take a severance package.

The details of the package were e-mailed to me and the package will be equivalent to around four months of my salary (which I think is generous considering I only joined the company in May, 2011). In terms of the changes to the job should I choose to return, I will require more "technical" skills, but the rest of the requirements are pretty much the same.

Is this legal? And if it is, when am I required to give an answer? I've read some articles mentioning 21 days. Is the package good enough? Also, if I take the severance package, am I still officially employed by the company for the 12-16 weeks I'm being paid? If I choose to return, do I have the right to demand training/retraining?

The Answer

Termination while on leave is not strictly illegal. It is only illegal if your termination is related to or because you are on leave or because you will now have child-care requirements. This surprises many new parents but it is true. Employment standards legislation requires employers to reinstate employees at the end of their leave to the job they held or to a comparable job if their job no longer exists. However, if an employer can prove that a termination was unrelated to the leave of absence, such as where a division shuts down or a major client is lost, then reinstatement may not be required.

Since you were given the option to return in a closely related role, the company acted within its boundaries by offering you a comparable job. If the role you were offered was a demotion or if the pay was less, my advice would be different.

Termination while on leave or shortly after leave may justify more severance. Severance pay is based on how long it should take you to secure a comparable job. The courts consider your age, tenure, position and the availability of other work having regard to your personal circumstances. This last factor is much more subjective than the others, and employees returning from parental leave or who are terminated while on leave often argue that finding another job after being out of work is more difficult. For example, in one Ontario case, the judge granted an employee an extra two months' severance because she was terminated when she was pregnant and her re-employment prospects were dim.

Severance may mean 'inactively' employed. If you do take the severance package, whether or not you are technically still employed while receiving severance is a function of the structure of the package that you negotiate or receive. If your severance is paid as salary continuance, your benefits are usually continued and you are considered "inactively" employed, which is similar to a paid leave of absence. If your package is paid as a lump sum, you get paid up front without any strings attached, but then all ties are immediately cut off. Employers have the legal right to determine the structure of any severance package, although this is negotiable.

There are no set time limits to respond. Employers are required to give employees enough time to consider their options before accepting or rejecting a job offer or severance package, although the timeline varies in different cases and is not set by any legislation or law. If you have not been given enough time to make a decision, ask for more time in writing. It is considered a form of duress if you are pressured into making a decision without having enough time to reasonably consider your options or to meet with a lawyer.

Speaking of negotiating, this is almost always a good option. If you do decide to return, you should ask for retraining as a condition of accepting the new job, or outplacement counselling costs if you choose to take the severance. I find that employers are more amenable to negotiate the terms of severance if you have been let go while on leave or shortly after, even if it was unrelated.

Daniel A. Lublin is a partner at Whitten & Lublin, representing both employers and employees in workplace legal disputes. Dan@canadaemploymentlawyer.com