The courts have repeatedly recognized the employment relationship as one of the most important relationships in an individual’s life, having far reaching social, contractual and economic importance to individuals. This increased recognition by the courts has made it even more important than ever, that employers handle one of the most difficult aspects of the employment relationship, the termination of an employee, with care.
One of the first issues to consider is whether or not the employee is being let go for cause. When there is cause to dismiss an employee, that employee will not be entitled to any notice or compensation. Just cause is generally limited to serious misconduct, and may include dishonesty, theft, absenteeism, incompetence and disobedience.
More commonly, termination will be without just cause. An employer may dismiss an employee at any time, for no reason, provided they provide the employee with reasonable notice.
Reasonable notice may be working notice, or compensation in lieu of notice. It is rare that an employer is confident that an employee will remain working constructively in a situation when their termination is imminent.
The principles governing what constitutes reasonable notice include an examination of the character of employment, the employee’s length of service, their age, the availability of similar employment, as well as an examination of the experience, training and qualifications of that particular employee. In instances where an employee may have been induced to leave secure employment, the courts may increase the notice period. Any damages awarded to an employee who has been wrongfully dismissed will be reduced by any new employment income earned during the period of reasonable notice.
When an employer terminates an employee and their conduct was characterized by bad faith, the courts will add onto the length of notice awarded to the employee. Bad faith conduct includes being unfair, untruthful, misleading or unduly insensitive. Examples of breaching the obligation of good faith include failing to provide a promised reference, terminating an employee while on sick leave, and failing to provide a Record of Employment within the statutory time limits.
In tough economic times as these, it remains imperative that employers terminate their employees in a careful and considerate manner.
Careful thought should be given to the actual termination meeting, and this meeting should be planned to both minimize disruption to the workplace as well as embarrassment to the employee. Before dismissing an employee, the employer should think about what time of day, when and where to hold the termination meeting. If, following the termination, the employee will be in a position where he or she will need to gather personal belongings, or, for security reasons will need to leave the workplace immediately, then minimizing embarrassing exposure for the employee at this vulnerable time will be crucial. Lastly, the employer should give thought to any security issues that may need to be revised or altered, following a termination, including the possibility that an employee may need to be escorted off of the premises by security.
Where possible, a termination meeting should be attended by two senior members of the organization. It is important to have two individuals who may corroborate what transpired at the meeting. This meeting should be brief and to the point, and should conclude with the employee being given any termination documents. At the very least, termination documents should include a letter to the employee which provides the employee with the proposed terms of termination, including last day worked, when benefits will end, how much vacation pay has accrued and how that will be paid out, any additional severance that the employer may be offering, and confirmation of whether or not the employer will be providing references. When an employer is offering an employee more notice than the statutory minimum they are required to give, it is generally a good idea to require the employee to sign a release in exchange. It is prudent to allow the employee time to take these documents away, and obtain independent legal advice on these documents.
A lawyer can help you understand the law of employment and to implement practical applications of the law, so that you can operate your human resources proactively. Mair Jensen Blair LLP can help you construct policies at all levels of your organization so that you can minimize your exposure to potential claims of wrongful dismissal and discrimination in your workplace.