Demand letter

How To Respond To A Demand Letter

Terminating employment can be difficult for the employee and, sometimes, the employer. If you are an employer who recently dismissed someone, you may feel you have done everything correctly by following the contract’s terms and the law, only to find a demand letter from your former employee claiming you owe them damages.

It may be tempting to make an offer for fear of a lawsuit, or you may believe the allegations don’t have merit. Even if you don’t owe the former employee anything, it is essential to get legal advice before acting. At this stage, your actions can have serious consequences. Learn how to defend a demand letter below:

Defending Against The Demand Letter: Your Version Of Facts

As a scenario, imagine that you dismiss Nathanial, an employee of six years, without cause. You give him six weeks of notice after his position has become redundant. He speaks with a lawyer who sends you a demand letter claiming the following:

  • Nathanial is owed reasonable notice in the form of six months of salary (minus the six weeks he was given); and,
  • Human rights were violated when his supervisor yelled at him in front of staff after returning from a day of leave to observe Passover.

A lawyer will ask for all relevant documentation so they can assess the merits of the employee’s allegations against your side of the story. In this case, you will submit documents adding context missing from his demand letter. For example: while away, his manager may have discovered serious mistakes in his work warranting discipline, supported by written correspondence and formal disciplinary reports.

In your response letter, your lawyer might state that the confrontation in question was not a result of discrimination against Nathanial but was motivated by his job performance (whether or not the manager’s behaviour was appropriate).

What Your Obligations Are – And Aren’t

Employers and employees have an obligation to each other governed by terms of employment agreements, legislation and courts, and of a collective agreement in the case of unionized employees.

Defending against a demand letter requires careful reading. Nathanial’s legal counsel may have determined that courts have awarded six months of salary to employees in similar circumstances. Still, they may have neglected to account for a clause limiting his notice to the minimum guaranteed by Ontario Employment Standards Act. Your lawyer advises you that this clause allowed you to dismiss him with six weeks of notice.

A response to a demand letter will explain that the employee’s interpretation of their entitlements is incorrect, that the employer fulfilled their obligations, and that the employee’s demand for damages is without merit.

Making A Counter-Offer On A Demand Letter

Responding to a demand letter is exceptionally tricky because not only is the content of your response important, but also its format. 

Not every case and every matter deserve a counter-offer in the response. An ill-informed offer could be harmful to your defence because it may signal to the other side various hints that you do not want to convey. 

A counter-offer should not be made – because it may send the wrong message to the employee. 

The counter-offer is determined by carefully analyzing the strength of evidence on your side and justifying previous sections of the response. 

If an employee appears to have a case for damages, offering a reasonable amount of money to settle the case and avoid going to court may be a good option. This is where your lawyer can demonstrate their worth and creativity in settling the dispute earlier – and without damages paid to the employee if the claims are meritless. If the lawyer determines the employee’s argument has no merit, a response letter may still be important to acknowledge the demand letter and make the case that no damages are justified.

The strength of a case may vary with the types of damage asked. In Nathanial’s case, you may reject his demand for damages in lieu of reasonable notice due to the employment agreement’s clause limiting the notice he’s entitled. However, if you are concerned his allegation is more persuasive, your lawyer might advise offering something that discourages further action.

Whatever your instinct when faced with a demand letter, whether you believe the allegations have merit or are tempted to ignore the demands, you should always get guidance from an employment lawyer to know your options and the risks involved.

Important: The above scenario is only used as an illustration and is not meant to be taken as legal advice.

Contact Us

Whether you are an employer or an employee looking for assistance with workplace issues, disputes or employment relationships, our team of skilled, knowledgeable, and experienced wrongful dismissal lawyers can advocate on behalf of businesses and employees at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected], and we would be happy to assist.

If you are a small or medium-sized company looking for full-service support with a same-day response, visit our CLO Program page for our strategic solutions.

Disclaimer: This blog is not intended to serve as or should be construed as legal advice and is only to provide general information. It is in no way particular to your case and should not be relied on in any way. No portion or use of this blog will establish a lawyer-client relationship with the author or any related party. Should you require legal advice for your particular situation, fill out the contact form, call (800) 771-7882 or email [email protected]