Sometimes terminating an employee is not as simple as following the Law
As a lawyer, I am often amazed at the complexities of owning a business. Whether small or large, there are financial, operational and human resource requirements that all demand the attention of the business owner. One of the most common employer issues to come across my desk is the termination of employees. When an employer decides to dismiss the employment of an employee without cause, there can be unforeseen complexities that may create negative repercussions for the employer. This is why terminating an employee is not a simple process but one that takes careful consideration and insight.
As a starting point, it is important to recognize that employers absolutely have the right to terminate employees without cause. Termination without cause must be done in the right way, however, to avoid liability for wrongful dismissal.
Terminating an employee the “right way” involves two considerations, the first of which is common sense: be polite and honest when terminating an employee. Employers must make sure that they are being frank and fair to the employee and not do anything to humiliate the employee in the process of terminating the employment.
The second consideration involves the notice period given before termination. While it is true employers have the right to terminate any of their employees without cause, employers have the legal obligation to provide the employee with reasonable notice prior to termination, or payment in lieu of notice, or a combination of notice and payment in lieu of notice.
So what is “reasonable” notice?
The answer to this question is more complicated than many employers believe. Many employers in BC read the Employment Standards Act (the “ESA”) and think, “That seems simple enough, I just do what the ESA tells me to do.”
Unfortunately, it is not so simple.
What many employers fail to realize is that the Employment Standards Act sets out the bare minimum notice required by law and, in many cases, much more notice is required than what is stated in the ESA. The truth is that if an employer wishes to give only the bare minimum of notice required under the ESA prior to terminating a worker’s employment, that employer must have an employment agreement signed by the employee stating that the employee agrees that only the ESA notice of termination rules apply on termination. If the employer has no such agreement signed by the employee, then a much longer notice period is usually required.
If there is no employment contract signed by the employee stating that the ESA minimum standards for notice of termination apply, the employer will have to carefully consider how much notice (or payment in lieu thereof, or a combination of both) is required.
Because the court takes into consideration aspects other than the minimum set out by the ESA, employers should consider the following 4 factors when determining what kind of notice to give an exiting employee:
- The character of the employment (full time requires more notice than part time, management employees generally require more notice than rank-and-file employees – although this has become less true over time, more recently, the determination of the length of notice depends less on the status of the employee in the business than on the likelihood that the nature of the employee’s employment and skills might require a bigger “cushion” while seeking other employment);
- The employee’s length of service (longer service = more notice required);
- The employee’s age (this becomes an issue once the employee’s age could start to present a barrier to re-employment – generally, the older the employee, the more notice, or pay in lieu thereof, is required to reflect the added difficulty the employee will face in finding a new job); and
- The availability of similar employment.
All the factors are somewhat interlinked with one another but at the heart of the analysis is the central question, “How hard will it be for this person to find another job comparable to the current job?”
This analysis becomes even more important when an employer is thinking of firing a long term employee without cause. This is true because the possible liability to the employer is generally much greater when terminating the employment of a long term employee than it would be when terminating a short term employee.
If you are an employer who is thinking of terminating a long term employee and you do not have an employment agreement signed by that employee that clearly states what the employer’s obligations are upon termination, we are here to help. I can guide you through the legal process to reach a favorable outcome. Having a legal advisor by your side allows you to focus on your business while I focus on protecting your interests.