You have just been fired. What can you do and what are your entitled to?

  If you are unionized, seek guidance from your union representative.  If you are not unionized, you may be entitled to notice or pay in lieu of notice (“notice pay”).

   Legislation called the Employment Standards Act requires employers to provide notice prior to termination in the amount of one week per year of service, to a maximum of eight weeks.  Under certain circumstances, you may also be entitled to severance pay.

   You may also be entitled to reasonable notice under common law, which is based on cases decided by the courts. The length of common law reasonable notice will be decided by looking at factors like your age, position, level of compensation, and the availability of similar employment.

   Your employer can provide you either with notice prior to termination or notice pay.  However, if you are terminated with just cause, you will not be entitled to notice or notice pay.  Just cause is a legal test which will be determined on a case-by-case basis.

   Your employer should provide you with a Record of Employment, either on paper or submitted straight to Service Canada online, so that you can apply for Employment Insurance benefits.

   A lawyer will be able to provide you with specific advice regarding your entitlements based on the facts of your employment and your termination. 

   You should see a lawyer as soon as possible in order to address any concerns you may have regarding allegations of cause or your entitlement to notice or severance pay.

     Sabina Veltri, Lawyer
     Tierney Stauffer LLP      
     sveltri@tslawyers.ca

This article is provided as an information resource and is not intended to replace advice from a quaified legal professional and should not be relied upon to make decisions. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions.

Your Obigations When Terminating an Employee – Ontario

Non-unionized employees rights are not determined by a collective bargaining agreement.  Employers of non-unionized employees require a firm understanding of their obligations when terminating an employee, failing which employers can be exposed to time-consuming and costly litigation.

The entitlements of non-unionized employees upon the termination of their employment arise through legislation such as the Employment Standards Act, 2000 (the “ESA”) and through the body of rules and principles resulting from the decisions of our courts known as the common law.

The ESA provides that an employee is entitled to notice prior to termination or payment in lieu (“notice pay”) in an amount equal to one week per year of service up to a maximum of eight weeks.  An employee may also be entitled to severance pay if their length of service is five years or more and they meet one of the two following criteria: (a) they are one of fifty or more employees whose employment has been terminated by the employer within a six-month period, or (b) the employer has a payroll of $2.5 million or more.

The Supreme Court has ruled that employers have an implied obligation to provide employees with reasonable notice prior to the termination of their employment.  This is a common law principle that binds all employers with non-unionized employees. 

Unlike notice pay under the ESA, there is no grid applicable to determining common law reasonable notice.  The period of reasonable notice applicable to an employee is determined on a case-by-case basis with regard to the employee’s age, health, length of service, training and experience, and the availability of similar employment.  The period of reasonable notice is generally longer than the ESA entitlement, which is included within it.

The failure to provide notice prior to termination can be interpreted as a breach of contract upon which an employee can bring an action for wrongful dismissal.  The damages payable to the employee consist of the amount of remuneration that the employee would have earned over the period of common law reasonable notice, including any payments such as commissions, bonuses, benefits and vacation pay.  These damages are reduced by any income that the employee earns over that period through other sources, such as new employment.

There is no obligation on an employer to provide notice in cases where an employee is terminated for just cause.  “Just cause” is a term with specific legal meanings.  Not every act of misconduct or impropriety will qualify as just cause.  Employers should be careful when asserting just cause, as the threshold of proof is high and employers bear the onus of proving that just cause exists. 

Whether or not an employee’s behaviour warrants just cause is determined on a case-by-case basis.  The court will look at the employee’s behaviour and determine if it is serious enough to be considered a breakdown in the employment relationship.  Examples may include conduct which breaches a fundamental term of the employment relationship, which breaches the trust which exists in the employment relationship, or which is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.

There are a variety of ways to structure an employment termination compensation package in order to fairly compensate the employee for lack of notice prior to termination.  Packages can include working notice, a combination of working notice and an ESA notice payment, a salary continuation with an incentive for the employee to find new employment, or a lump sum payment.  A release from the employee should be obtained in exchange for the payment.

Sabina Vltri
Lawyer, Litigation and Employment Law
Tierney Stauffer LLP
sveltri@tslawyers.ca
613-728-8057.