Given that Canada’s jobless rate hit a record low in March and employers are now scrambling to find anyone to fill open positions in virtually all sectors of the economy, one might justifiably think that terminations are no longer a major topic of conversation. Surely, employers are desperately hanging on to their existing employees just to keep warm bodies in seats and their businesses chugging along? Not so, it turns out.

Since the pandemic began, most employers have learned to find ways to save money. In what is doubtless a product of those efforts, we are seeing a rash of terminations of mid- and upper-level employees, despite the apparent shortage of available talent today. From an employer perspective, there is no better time to terminate than when the market is white hot and there are more jobs available than people to fill them. After all, legally, when terminated individuals are quickly re-employed, their claims are effectively reduced by the period of time they were reemployed. Even in early settlement negotiations, the job market is trotted out as a justification for much lower severance payouts. I certainly do so in acting for employers.

However, this isn’t the end of the story. In this effort to save costs, we are seeing companies use the current job market by increasingly targeting employees whose salaries are on the higher end of the compensation spectrum for their positions. Often these employees have been with the company for decades, working their way up through the company ranks, with salary increases and promotions over the years, which have effectively priced them out of the market. Employers are recognizing that these positions can easily be removed or replaced by combining portfolios to eliminate positions or replacing experienced employees with younger, less expensive ones. The seasoned employees are effectively finding themselves priced out of their current jobs.