TERMINATION OF THE EMPLOYMENT CONTRACT
Many issues arise upon termination.  Most people are familiar with the term “severance” but many do not understand where it comes from.  Generally, there is an unwritten term in every employment contract that the contract cannot be terminated without reasonable notice being given, or pay in lieu of notice – also known as “severance”.  This applies to both parties, although the length of notice for each will likely be different.  However, if there is just cause, the employment contract can be terminated immediately, without any notice at all.  We caution though, that each situation depends on the individual circumstances, including whether there is a specific term in the contract dealing with termination which may override the general principle.  To know for sure, you should always discuss the contract with a lawyer before acting.

You should also be aware of the other issues that arise upon termination such as Employment Standards requirements, benefits continuation, human rights complaints, employment insurance claims, and vacation pay.


For the Employer:
In general, just cause can be challenging to establish without a well documented case against the employee.  Just cause can result from the culmination of a number of incidents of misconduct, or sometimes, just one egregious act.  In many circumstances, the employer is expected to warn the employee and impose less serious sanctions for misconduct before relying on the drastic remedy of termination.  Each case will depend upon its own circumstances.  Accordingly, keeping detailed records of any form of misconduct will assist if the employer finds the need to terminate in this fashion.  Before dismissing an employee for cause, we recommend that the company consult with a lawyer to determine whether cause exists or can be established if the matter proceeds to Court.  We also recommend consulting a lawyer to develop an exit strategy for the employee in order to minimize disruption to the workplace, and to maximize the ability to handle the matter in a dignified, non-confrontational way.

For the Employee:
Put simplistically, employers have just cause to terminate your employment if you breach – fail to abide by – the employment contract.  Typically, this requires a number of acts of misconduct, or a very serious single act of misconduct, before termination with just cause is justified.  In instances such as occasional tardiness or inattention, the employer would normally be expected to first give a warning, as well as the opportunity to remedy the failings before firing the employee.  As well, an employee cannot be fired simply because business is bad or their services are simply no longer required.  Notice of termination or severance should be given in these circumstances. 

However, if an employee steals from their employer, lies to their employer, or demonstrates extreme insolence, the employer may be within their rights to terminate with just cause.  With just cause, the employer does not have to provide any notice or pay any severance.

If your employer does not have just cause to fire you, you must be given reasonable notice, or compensation in lieu of reasonable notice. This could be described as an appropriate period of time to prepare for the end of the employment relationship.  Depending on the type of job, the length of employment, your age, and the opportunities to find similar employment, it can be as long as 12 to 24 months.  During this period, you are owed your salary and the value of your regular benefits. Depending on how it is paid, the amount of income tax owing will vary. To find out more about income tax liability and severance pay you should consult with your lawyer.  If you do not receive reasonable notice or compensation in lieu of that notice, then you have been wrongfully dismissed.  

Experience

Creativity - Double Diamond Law Corporation understands how to find solutions. We take great pride in finding a reasonable course of action that treats all parties with respect. We strive to and achieve favourable results without generating unnecessary animosity or bad feelings.   

Fee Structure To Suit Your Needs - We find out from you what budget is available and we will tell you what we can do within that budget. In certain cases, we may offer contingency fee agreements so that no fee is charged for our services until after your case is resolved, and only if you collect an award for damages and/or compensation. It is about the flexibility to do what is right for you.

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