Dismissal in an SME: key reference points before announcing departures

In Québec, close to 98% of employer businesses have fewer than 100 employees, and they provide more than 60% of private-sector jobs. Yet most content on dismissals is written for large organizations, with a structured HR department and well-established procedures.

In an SME, the reality is different: management often knows every person, there is not always an HR lead, and every departure is felt across the whole team. This article presents the key reference points to know before announcing departures.

What the Act provides, regardless of company size

The Act respecting labour standards applies to the vast majority of Québec employers, whether they have 5 or 500 employees. An SME therefore has essentially the same basic obligations as a large organization.

• Notice of termination: the Act provides for a written notice whose length depends on the person's uninterrupted service, or a compensatory indemnity when the notice is insufficient.
• The Civil Code: in addition to the Act, the Civil Code of Québec provides for reasonable notice, which may exceed the minimum set by the Act depending on the person's situation.
• Recourses: a person with 2 years of uninterrupted service may contest a dismissal made without good and sufficient cause.

These are often the points where the lack of in-house HR expertise shows, and where a decision made quickly can cost more than expected.

When an SME faces a collective dismissal

A collective dismissal is often associated with large companies. Yet the Act uses the term as soon as 10 or more people from the same establishment are affected within a period of 2 consecutive months. An SME with 40 or 60 employees can therefore be concerned.

In that case, other obligations come into play, including the notice to the Minister, which is in addition to individual notices. The reclassification assistance committee, for its part, applies to dismissals of 50 or more people, as explained in our article on the reclassification assistance committee or exemption. For smaller groups, Services Québec also offers reclassification measures with no obligation for the employer.

Challenges specific to SMEs

Beyond legal obligations, a dismissal is experienced differently in a small organization.

• Proximity: management often delivers the news personally to people it has worked alongside for years, which makes the conversation harder to lead.
• The team that stays: each departure directly affects colleagues, who often have to absorb part of the work. Trust and engagement can suffer quickly.
• Reputation: in a region or industry where everyone knows each other, the way departing employees are treated shapes the company's image with clients and future candidates.
• Resources: without a dedicated HR team, planning, documents and communications often rest on one or two people who are already very busy.

Consistent messaging and the support offered to the people affected therefore carry a lot of weight, both for those who leave and for the team that stays.

Career transition: support within reach for SMEs

The Act does not require an SME to offer support to departing employees, except within a reclassification assistance committee. Many employers still choose to do so, because this support changes how the departure is experienced.

A career transition program helps the person take stock, clarify their goals and find new employment with the support of a coach. For the employer, it is also a concrete way to show the team that stays that the people affected are not left on their own.

This type of support is not reserved for large organizations: it can involve a single person or a small group, depending on the situation.

In summary

• The same rules: an SME has essentially the same basic dismissal obligations as a large organization.
• Collective dismissal: it can affect an SME as soon as 10 people from the same establishment are affected within 2 months.
• The human side: proximity, the team that stays and reputation often weigh more heavily in a small organization.
• Career transition: support is possible for a single person or a small group.

This content is provided for information purposes only. It is neither legal advice nor professional advice. For a specific situation, please consult a professional.

Sources

• Rapport PME 2026 (in French), Canadian Federation of Independent Business (CFIB)
• Act respecting labour standards (CQLR, c. N-1.1), s. 82, 83, 84.0.1 to 84.0.4 and 124, LégisQuébec
• Civil Code of Québec, art. 2091, LégisQuébec
• Licenciement collectif (in French), Québec.ca
• Guide des mesures et des services d'emploi, section 5.6 Concertation pour l'emploi (April 1, 2023 version, in French), Services Québec