Terminating an employee is one of the most difficult decisions employers face.
Once the decision to terminate has been made, employers must consider the potential negative effects upon the employee, other staff, the organization’s reputation, and the threat of litigation.
An action plan benefits all parties
To avoid negative consequences, the conduct of the termination is as important as the decision itself.
In short, the most basic advice for any employer, to avoid increased liability to a terminated employee, is to act honestly, assert cause only if cause truly exists, remain fair in the manner of dismissal and conduct the termination meeting in a humane and professional manner.
Reason for terminating Termination can be undertaken with or without cause. Termination with cause, viewed by the courts as being the “capital punishment of employment law,” is usually reserved for serious, proven misconduct, such as theft, fraud, assault, sexual harassment, excessive absences for unsubstantiated reasons, serious insubordination, or conflict of interest. Of note, poor performance will rarely be considered cause for dismissal, unless there is clear evidence that the employee has not responded to progressive disciplinary measures.
Where an employee is terminated with cause, they are not entitled to any compensation related to the termination of employment. By contrast, in terminating without cause, in its simplest form, the employee will be entitled to compensation by way of one of the following regimes: minimum standards under the relevant employment standards legislation, an amount specified in a contract, or an amount provided under the common law.
Further, the applicable regime will invariably depend on whether there is a written employment agreement in place, and whether the termination provisions under said agreement are legally enforceable.
Given the potential for a substantially increased amount being due to an employee under the common law, as opposed to either of the other two regimes, where they do not have a carefully drafted employment agreement, employers are duly advised to have employment counsel assist in crafting comprehensive, enforceable agreements.
Additionally, the employer should seek legal advice prior to terminating any employee to determine a particular employee’s entitlements upon termination without cause.
The termination letter Before having the employee attend the termination meeting, the employer should have a carefully crafted termination letter prepared.
Its content and specificity will depend upon the circumstances and whether the termination is with or without cause. Nonetheless, in order to avoid the potential for a claim to additional damages by a terminated employee (i.e. punitive damages), an employer should ensure to remain truthful within the contents of the termination letter.
In order to avoid some of the common pitfalls in drafting any termination documents, legal advice should be sought in completing the same, including an employee’s Record of Employment.
The termination meeting
To mitigate potential legal liability, employers should follow specified, scripted procedures in carrying out any termination meeting, whether with or without cause. We offer the following ten tips on how to carry out a proper termination meeting: • Prepare what you will say; make a checklist of items to be covered.
- One person should be the “official voice” during the meeting, with a witness taking notes. Do not “gang up” on the employee.
- Be brief. Let the employee know unmistakably that he or she is being terminated, but in general terms. If the employee pushes for specifics, simply state that the decision was made by management; it is final and you cannot discuss further details.
- If alleging cause, make sure that this is clear, including whether or not you are offering any gratuitous payment in lieu of notice.
- In many cases, the meeting will become emotional. The person conducting the meeting should be firm, yet sensitive, without losing control of the meeting.
- Have the termination letter plus any written offer and associated documents ready for the employee. Do not require the employee to read the letter or sign a release immediately.
- Describe the notice, or payment in lieu of notice, being provided, plus any offers in exchange for a signed release.
- Allow employees to take their personal effects with them, or make arrangements to retrieve these items at a later date, supervised by management.
Employees should not be allowed access to any company computers or other electronic devices after termination, unless supervised by management.
- Carry out a dismissal early in the week and late in the day, so that the employee can seek advice and leave without encountering coworkers.
- Pay for a taxi to drive the employee home, or contact someone to come and pick up the employee.
The last word
The best advice to avoid potential liability in the event of a breakdown in the employment relationship is to seek legal assistance prior to the time of hiring, by having carefully drafted employment agreements and ensuring that you have comprehensive policies and procedures in place.
When the termination of the employment relationship is necessary, seek legal advice from a specialized employment counsel before making the decision, not after.
Damien Buntsma is a partner at Lawrences and heads up the Employment and Labour Law Group. He represents and advises public and private sector employers, unionized and non-unionized, in all areas of labour and employment law. Buntsma can be reached at 905-452-6876 or firstname.lastname@example.org.