Terminating Employment

Terminating Employment

In Canada there are two forms of dismissals: termination without cause, and termination for just cause. Generally speaking, employers have the right to terminate an employee’s employment at any time without cause, as long as they provide the employee with reasonable notice of the termination, or reasonable pay in lieu thereof.

When it comes to terminating employment, there are many terms for this action – and many reasons for it as well. It can mean that you accept an employee’s resignation, or you accept the employee’s retirement, or you inform the term employee that their term will not be extended, or you inform the employee that due to a re-structuring, the company no longer needs their services, or you inform the employee that due to their recent behaviour they are no longer employed with the company, or you inform the employee that due to their apparent inability to correct their behaviour, they are no longer employed with the company. In all of these cases, the employee is paid their last pay and removed from payroll on a permanent basis. If the employee was going off work on an approved unpaid leave – sick leave, educational leave, or lay-off due to a permanent, temporary or seasonal lack of work – they would just be made “inactive” on the payroll system. We are not taking about that here.

When an employee terminates their employment with you, the amount of notice is quite minimal compared to when the employer gives notice. Both the provincial and federal labour standards codes spells this out clearly when the employee terminates the relationship, and clearly when the employer terminates the relationship for an employee who has been with the employer (in any number of positions) leas than ten years. The amount of notice required is not so definitive when the employer terminates the relationship for an employee with ten or more years of employment.

When you have an employee whose performance is not what it should be, you have a number of choices. Under            the Nova Scotia Labour Standards Code, “employers must tell an employee in writing that they will fire or suspend or lay off that employee. This is called giving notice. “Notice” is the letter telling the Employee that he/she will no           longer work for the employer after a given date.” You must always follow the applicable labour standards code and presume that the fairness of the termination may be determined in a court of law. Having a well defined statement about terminating employment in your offer letter can often make things easier for the employer. You are well advised to thoroughly read the “Ending Employment” section/s of applicable labour standards code to ensure you are using the correct terminology and that you clearly understand the terms before you hire an employee, rather than when you are ready to terminate their employment.

The following are various termination scenarios which I offer for your consideration:

Just Cause/For Cause Scenarios:

  1. If an employee does something that causes you to immediately lose faith in them, some willful misconduct or disobedience or neglect of duty, they can be terminated immediately, without any notice of their termination.
  1. When an employee’s performance is not what it should be, you can work with them and show them exactly what they must do to meet your expectations. This can take a lot of time and energy but this is the best option in most cases. This is the option you would want your employer to take with you. Of course you also would want your employer to make very sure you were capable of being successful in the job before they hired you. You would want your employer to give you clear directions, specific and timely feedback, the tools and training required for success and a safe and healthy workplace. Each one of these contributes to your success at work.

If all of these are in place, and the employee does not change their behaviour, the courts will want you to prove with ongoing documentation that you gave the employee every opportunity to change their behaviour and plenty of time to prove that they could, unless they are within their probationary period. If they have successfully passed their probationary period, and after usually a year of working with the employee, the employee is still not being successful, you can terminate their employment “with cause”.

Without Cause Scenarios

  1. Sometimes you have no hope whatsoever that the employee will be able to be successful in the job. Sometimes it is best if they leave your workplace immediately. This is straightforward especially if they are within their probationary period. You are well in your rights to terminate their employment “without cause” but you must give them notice in accordance with the appropriate labour standards code. This should never be done lightly, especially if you lured the employee away from other secure employment to take your job.

If you decide to move forward, make sure that it will not happen again by fixing whatever business process that needs fixing to prevent it from happening again. This may be related to your recruitment and hiring processes or your performance review process, for example.

Employees can either work the notice period or they can receive money for the notice period. It is generally recommended that they are paid the notice. You usually do not want to have an unhappy employee in your workplace, impacting your other employees.

  1. Sometimes, when an employee is not being successful in their job, you recognize that they haven’t been treated fairly – they should never have been hired for the position; they should have had more consistent supervision; and so on. This is when you may want to pay them more than what is spelled out in the labour standards code – the labour standards code offering a guide on appropriate notice for your consideration. The amount is up to the employer and the situation. I’ve seen employers who were very generous because they truly felt guilty about the way the employee was treated or because they were afraid that the employee would lawyer up if they just paid them the minimum amount spelled out in the legislation or regulations.
  1. If the employee has more than ten years of employment, and you want to terminate their employment, it is more difficult. First of all, the amount of notice is often more vague. The employee’s age and likelihood of being able to secure another job in their field with a similar rate of pay is taken into account when the courts are deciding if the employee has been treated fairly. Again, what was included in the offer letter can play a role.

You want to be fair to all of your employees, but especially to those who have been with you for ten years or more. The challenge is ensuring that your definition of “fair” is similar to the employee’s and the courts. You basically want the employee to leave quietly. You do not want them to lawyer up; you do not want to spend copious amounts of time, money and energy in a law suit. The amount of notice/money you offer them needs to be not too big and not too small. It is truly a difficult decision and one that you should not make without the assistance of a labour lawyer. The lawyer will have knowledge of the amounts of notice that are currently acceptable to the courts, taking into account all of the specific circumstances of this particular employee. It is naïve to believe you can decide without this expert advice. It could be an expensive mistake.

When terminating an employee, keep in mind how you would like to be treated if the shoe were on the other foot. This is a big deal to all of your employees, but especially to this employee, their family and friends. Doing it badly can impact the loyalty and the productivity of your remaining employees. It can also impact your brand and your ability to hire people in the future. It is important that it never be taken lightly and it is done with loving kindness.

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