The Law of Terminations.

Although most managers know when to fire a poor employee, very few know how. This lack of know how often has expensive consequences, not the least of which is a claim for wrongful dismissal. This article is designed to help you better understand the legal issues surrounding terminations and avoid costly mistakes.

What Laws Apply

There are two important laws to consider when it comes to terminations: employment standards legislation and the common law.

Employment Standards Legislation

Employment standards laws are written pieces of legislation that outline the minimum standards to which employees in the applicable jurisdiction (e.g., a particular province or federally regulated employee) are entitled. These are minimums, only. If an employer provides a greater right, such as a longer notice period on termination, the greater right will prevail.

Employees cannot agree to waive their entitlements under employment standards legislation. They are guaranteed the protections that are offered in the legislation.

Employment standards include provisions on how much notice an employer must provide to terminated employees. The purpose of notice is to give employees time to find alternative employment. The length of notice is tied to the length of service the employee had. For example, it may provide for a week of notice for each year of service, up to a specified maximum. This period of notice can be given as advance notice of termination, during which time the employee must continue to report to work. Alternatively, the employer may simply pay the employee an amount equivalent to what they would have received during the notice period.

Severance pay is an additional amount to which some employees are entitled. This may be a lump sum award for mass terminations or for relatively long term employees with a larger organization.

Common Law

Common law refers to the laws that are created and applied by the courts. This type of law exists in conjunction with written laws like employment standards legislation. Common law does not exist in Quebec, which is considered a civil law jurisdiction.

The courts assume that the employer would have agreed to a reasonable period of notice had it turned its mind to the issue. Therefore, unless there is a written agreement setting out the exact amount of notice on termination, the courts will calculate the notice they believe should apply. This is usually longer than what the employment standards legislation provides.