Howard Levitt: The middle management cull is coming to Canada, too

financialpost.com:

The year ahead for Canadian employees was foretold by a front page article on Dec. 31 in the Wall Street Journal, discussing the massive downsizing of middle management.

The drive for greater efficiency, higher profits, increased international competition and the impact of artificial intelligence have combined to eliminate many of the employees occupying those positions between front line workers and the executive team. U.S. managers now oversee three times the number of employees they did in 2017, according to research firm Gartner, while LinkedIn’s Workforce Confidence survey found that close to one third of employees claim to have bosses too stressed to support them.

It is worse here.

Declining productivity under the Liberal government and the resulting increased productivity gap with the U.S., along with higher taxes, reduced foreign investment and the Trump government‘s emphasis on reshoring has made the plight of Canadian employers worse — much worse — than their U.S. counterparts.

The Wall Street Journal points out that many U.S. employers are demoting their middle managers. In many states they can do that with impunity. In Canada, such demotions would be a constructive dismissal, permitting the employee the option of resigning and suing as if they had been fired.

That reality makes demotions unworkable for most companies, with outright termination an untenably costly option.

One alternative seldom used is to provide advance written working notice of a downsizing. That notice offsets, dollar per dollar, the severance costs of wrongful dismissal damages because wrongful dismissal damages are, legally speaking, simply compensation for not providing the advance notice the law actually requires. Despite this benefit,