Letting an employee go is rarely a pleasant experience for an employer but is an inevitable part of operating a business. Employers should be aware of their obligations under Ontario’s employment laws – as well as general best practices – to make an employee’s dismissal go as smoothly as possible for all parties involved.
Employee entitlements under the law
Employees in Ontario are owed certain entitlements upon dismissal, depending on their circumstances. Many employees fall within the purview of the Employment Standards Act (however, some unionized and federally-regulated employees fall under different legislation).
Severance pay
Severance pay is the primary entitlement owed to dismissed employees under the Employment Standards Act. Severance pay is based on the employee’s length of service; the longer the employment term or service, the greater the severance pay.
Note that not every employee is entitled to severance pay under the Employment Standards Act. Employees who have been employed for less than five years or who were employed by smaller employers may not be entitled to severance pay. Similarly, there are exceptions involving misconduct or certain professions (such as construction) where severance pay may not be required by statute.
Termination pay
Often confused with severance pay is termination pay, which is paid in instances where an employer has not provided the required amount of advance notice of termination.
Employees who have a term of service longer than three months are entitled to written notice of termination. The amount of notice an employee is entitled to depends on the duration of the employment relationship and may be impacted by the employment contract. In some cases, an employee may receive a combination of notice and termination pay if they are given some notice but less than what is statutorily required.
Employees are not entitled to notice pay if they are terminated for cause (for example, due to serious misconduct).
Wrongful dismissal
Employers have the right to let employees go for various reasons. However, in situations where an employee is being dismissed without cause (i.e. not on the basis of any misconduct or poor performance), it is critical that the employer provide either sufficient notice or the correct combination of notice and pay in lieu of notice. Failure to do so can give rise to a claim of wrongful dismissal by the employee.
Constructive dismissal
Constructive dismissal is another type of termination that can expose an employer to liability. Constructive dismissal occurs in cases where an employer changes the terms of employment in a substantial way without an employee’s consent. The work environment may become so unbearable for the employee that, in essence, they have no choice but to resign. Instead of an ordinary resignation, this may be considered a constructive dismissal and may leave the employer vulnerable to a claim by the employee.
For example, constructive dismissal may occur in situations where an employer unilaterally changes the employee’s working hours, responsibilities, or pay. Alternatively, the work environment may be so poisoned that it renders it intolerable for the employee to continue working there.
Handling the dismissal process
The manner in which dismissal is handled is critical, both for minimizing the hardship on the employee and the liability faced by the employer. Finding a respectful way in which to end the employment relationship can pay dividends for both parties.
Employers can benefit from the following best practices:
Don’t drag it out
Nobody wants to be in a long meeting where the penny drops at the end. Employers should try to keep termination meetings short and to the point in order to avoid needless stress for everyone. Being prepared with an agenda and, where necessary, a script, can help make it go more smoothly.
In most termination meetings, the employee being dismissed is likely to ask why they are being dismissed. While having an answer is not required by law, being forthcoming with an answer helps demonstrate transparency on the part of the employer.
Have empathy
Losing a job, especially when it is unexpected, will be a major stress to most people. Employers should try to be as considerate as possible. In cases where an employee seems particularly distraught, the employer may consider arranging their transportation home or having their personal items packed up for them.
In cases where a worker is known to be a risk for aggressive or violent behaviour, employers must ensure that security measures are in place in advance of the dismissal meeting. While some employers prefer to have dismissed employees escorted off the premises by security, it is worth considering whether this is really necessary to reduce the amount of conflict (keeping a subtle eye on them might suffice).
Maintain confidentiality and discretion
It is also important to ensure that word does not leak out about the dismissal before the employee is informed. Similarly, after the dismissal happens, other employees should only be informed that the employee is no longer employed by the business, with no additional details.
Employers should always avoid firing an employee in a public setting, instead holding termination meetings in a private space. Holding the meeting late in the day, close to when the employee would be leaving anyway, may also help minimize their embarrassment.
Take notes and have a witness
Termination meetings have the potential to get heated, and what takes place may be probed as part of any future litigation. As such, it is ideal to have at least two members of management or human resources in attendance at a termination meeting. Taking notes is a good idea to create an accurate record of the meeting.
Remember the formalities
Written termination is a key step in formally dismissing an employee. A termination letter should address all outstanding matters, including appropriate severance pay, unused vacation time, when health benefits cease, and what happens to the employee’s pension (if any).
Contact Tierney Stauffer LLP in Ottawa, North Bay, and Eastern Ontario for Advice on Employment Matters
Tierney Stauffer LLP helps both employers and workers find effective solutions to employment disputes, including wrongful and constructive dismissal claims. Our skilled employment lawyers have extensive experience advocating for clients’ rights and interests through litigation, mediation, and arbitration. We proudly represent clients throughout Ottawa, Cornwall, Arnprior, Kingston, and North Bay. To discuss how we can help with your employment law matter, call us at 1-888-799-8057 or reach out online.
Employee entitlements under the law
Employees in Ontario are owed certain entitlements upon dismissal, depending on their circumstances. Many employees fall within the purview of the Employment Standards Act (however, some unionized and federally-regulated employees fall under different legislation).
Severance pay
Severance pay is the primary entitlement owed to dismissed employees under the Employment Standards Act. Severance pay is based on the employee’s length of service; the longer the employment term or service, the greater the severance pay.
Note that not every employee is entitled to severance pay under the Employment Standards Act. Employees who have been employed for less than five years or who were employed by smaller employers may not be entitled to severance pay. Similarly, there are exceptions involving misconduct or certain professions (such as construction) where severance pay may not be required by statute.
Termination pay
Often confused with severance pay is termination pay, which is paid in instances where an employer has not provided the required amount of advance notice of termination.
Employees who have a term of service longer than three months are entitled to written notice of termination. The amount of notice an employee is entitled to depends on the duration of the employment relationship and may be impacted by the employment contract. In some cases, an employee may receive a combination of notice and termination pay if they are given some notice but less than what is statutorily required.
Employees are not entitled to notice pay if they are terminated for cause (for example, due to serious misconduct).
Wrongful dismissal
Employers have the right to let employees go for various reasons. However, in situations where an employee is being dismissed without cause (i.e. not on the basis of any misconduct or poor performance), it is critical that the employer provide either sufficient notice or the correct combination of notice and pay in lieu of notice. Failure to do so can give rise to a claim of wrongful dismissal by the employee.
Constructive dismissal
Constructive dismissal is another type of termination that can expose an employer to liability. Constructive dismissal occurs in cases where an employer changes the terms of employment in a substantial way without an employee’s consent. The work environment may become so unbearable for the employee that, in essence, they have no choice but to resign. Instead of an ordinary resignation, this may be considered a constructive dismissal and may leave the employer vulnerable to a claim by the employee.
For example, constructive dismissal may occur in situations where an employer unilaterally changes the employee’s working hours, responsibilities, or pay. Alternatively, the work environment may be so poisoned that it renders it intolerable for the employee to continue working there.
Handling the dismissal process
The manner in which dismissal is handled is critical, both for minimizing the hardship on the employee and the liability faced by the employer. Finding a respectful way in which to end the employment relationship can pay dividends for both parties.
Employers can benefit from the following best practices:
Don’t drag it out
Nobody wants to be in a long meeting where the penny drops at the end. Employers should try to keep termination meetings short and to the point in order to avoid needless stress for everyone. Being prepared with an agenda and, where necessary, a script can help make it go more smoothly.
In most termination meetings, the employee being dismissed is likely to ask why they are being dismissed. While having an answer is not required by law, being forthcoming with an answer helps demonstrate transparency on the part of the employer.
Have empathy
Losing a job, especially when it is unexpected, will be a major stress to most people. Employers should try to be as considerate as possible. In cases where an employee seems particularly distraught, the employer may consider arranging their transportation home or having their personal items packed up for them.
In cases where a worker is known to be a risk for aggressive or violent behaviour, employers must ensure that security measures are in place in advance of the dismissal meeting. While some employers prefer to have dismissed employees escorted off the premises by security, it is worth considering whether this is really necessary to reduce the amount of conflict (keeping a subtle eye on them might suffice).
Maintain confidentiality and discretion
It is also important to ensure that word does not leak out about the dismissal before the employee is informed. Similarly, after the dismissal happens, other employees should only be informed that the employee is no longer employed by the business, with no additional details.
Employers should always avoid firing an employee in a public setting, instead of holding termination meetings in a private space. Holding the meeting late in the day, close to when the employee would be leaving anyway, may also help minimize their embarrassment.
Take notes and have a witness
Termination meetings have the potential to get heated, and what takes place may be probed as part of any future litigation. As such, it is ideal to have at least two members of management or human resources in attendance at a termination meeting. Taking notes is a good idea to create an accurate record of the meeting.
Remember the formalities
Written termination is a key step in formally dismissing an employee. A termination letter should address all outstanding matters, including appropriate severance pay, unused vacation time, when health benefits cease, and what happens to the employee’s pension (if any).
Contact Tierney Stauffer LLP in Ottawa, North Bay, and Eastern Ontario for Advice on Employment Matters
Tierney Stauffer LLP helps both employers and workers find effective solutions to employment disputes, including wrongful and constructive dismissal claims. Our skilled employment lawyers have extensive experience advocating for clients’ rights and interests through litigation, mediation, and arbitration. We proudly represent clients throughout Ottawa, Cornwall, Arnprior, Kingston, and North Bay. To discuss how we can help with your employment law matter, call us at 1-888-799-8057 or reach out online.