Terminating the employment of an employee is never easy. There are many things to consider from both a practical and legal perspective. The more prepared you can be the better. While not exhaustive, set out below are some questions every employer should be asking themselves before they terminate the employment of any non-union employee on a “without cause” basis.
- What is the reason for termination? Make sure that no part of the reason is based on a prohibited ground under human rights legislation (e.g., age or disability), employment standards legislation (e.g. COVID leave, maternity or parental leave), occupational health and safety legislation, or labour legislation (e.g. union membership)
- What is the timing of the termination? Are there any impediments to carrying out a termination such as the employee being on an approved or statutorily protected leave, on vacation, or off on sick or disability leave?
- Is there a written contract that might impact severance?
- If there is a written contract, are the severance provisions enforceable?
- If there is no written contract, how much reasonable notice is applicable?
- What is the impact of termination on any STIP, LTIP, bonus, or stock plan to which the employee may be entitled?
- If you give working notice to the employee, can the employee do more damage than good while the employee continues to work?
- Does the employee have any health conditions that might make benefit costs after termination expensive? Keep in mind that if you cannot continue benefits after termination and the employee requires medications or becomes disabled during the reasonable notice period, the employer may be liable to self-insure the lost benefits during that reasonable notice period. This could be prohibitively expensive.
- Can you continue benefits after termination and, if so, which ones and at what cost?
- Can the employee convert their benefits after termination? If so, what is the process for conversion and do you have information available to assist the employee in conversion?
- How and where are you going to conduct the termination meeting? Is the employee present in the worksite? If not, how do you get the message to the employee in a professional and compassionate manner? If you conduct the termination meeting in the office, do you have a place which is private other than your own office where the meeting can be conducted?
- How are you going to get the written termination notice to the employee if the employee is not present at the work site? Keep in mind, termination notices must almost always be in writing to be effective.
- How many terminations are being done at the same time? Are you triggering any statutory group termination requirements?
- If you are making a severance offer, are there any financial constraints that should be considered in structuring the offer? For example, should you make an offer of up-front severance or salary continuance?
Having the answers to these questions at your fingertips will make the process easier and make any consultation which you have with your employment lawyer less costly.
Originally Published by Lawson Lundell, November 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.