How To Terminate an Employee in Ontario

Terminating an employee in Ontario is not enjoyable for anyone involved. It requires planning and professionalism to handle the experience with tact. It can be an emotionally charged situation as the employee is placed in a vulnerable position.

Employers should seek legal advice before terminating an employee in Ontario to ensure they are following best practices and to pre-empt any adverse reactions, including a legal action.

Be Careful when Alleging Cause When Terminating an Employee in Ontario

Where an employee is terminated for cause, they are not entitled to reasonable notice of termination or pay in lieu of termination. This may seem like an attractive option for an employer to save money, but an unfounded allegation of cause can be incredibly expensive where an employee asserts his/her rights.

To terminate an employee in Ontario for cause, s/he must have engaged in misconduct that gave rise to a breakdown of the employment relationship. This is a high threshold, so an employer should ensure employee’s conduct is sufficient to justify such a dismissal. For instance, cause may be alleged based on a single incident, or a series of incidents. Sometimes, employers claim “after-acquired” cause where the employer discovers the employee misconduct that occurred while s/he was employed only after s/he has been terminated. Such a claim brings up complex issues of condonation and heightened scrutiny on whether the employer is simply trying to evade its contractual obligations.

It is strongly recommended that an employer seek legal advice before alleging cause. An experienced employment lawyer can assess whether cause is justified based on the specific facts and developing case law. Otherwise, an employer will be at risk for a claim for wrongful dismissal.

Ensure an Employee Receives Entitlements Owed

Generally, provincial employees can be dismissed without cause for any non-discriminatory reason as long as the employer provides sufficient notice of termination, or payment in lieu of notice.

Various statutes provide for legislated minimums that an employee is entitled to upon termination, the Employment Standards Act being one of them in Ontario. However, an employer must have the employee’s agreement to receive the statutory minimums through an enforceable employment agreement. Otherwise, the notice of termination must be “reasonable” based on the factors from caselaw.

Before offering an employee the legislated minimums, an employer should get all relevant employment documents reviewed by an employment termination lawyer to ensure they remain enforceable. Recent legal developments have led to increasing amounts of termination provisions in an employment agreement being unenforceable.

Even more, where an employment agreement is ambiguous on a topic, it will be interpreted in a manner that is less advantageous to the party who drafted it, that is, the employer. Therefore, it is vital to have all relevant employment documents reviewed by an experienced lawyer prior to terminating an employee in Ontario.

Implied Rights and Responsibilities in the Manner of Dismissal

An additional reason to seek legal advice is to understand the implied rights and responsibilities that are part of every employment agreement. For example, an employer has an obligation of good faith and fair dealing in the manner of dismissal. This generally means that an employer must refrain for engaging in unfair or bad faith conduct such as being untruthful or unduly insensitive. Where an employer breaches this implied duty, an employee may be able to claim additional damages amounts. As such, the manner of dismissal is critically important.

Additional Best Practices

By now, it should be clear that seeking legal advice prior to terminating an employee in Ontario is a good idea. Some additional tips to consider when terminating an employee include:

• Consider providing working notice
• Make advance arrangements in relation to the termination paperwork, security, transitioning of duties, and allowing the employee to gather belongings
• Seek advice on a fair and reasonable severance package
• Have more than one person at the termination meeting and take notes
• Provide the employee sufficient time to consider options and seek independent legal advice
• Remain professional before, during, and after the termination. Avoid negative comments about the dismissed employee even after s/he has left the workplace
• Consider whether the employee may have a legal claim and seek legal advice on how to minimize liability

We hope this article provides guidance on this unsavoury topic. Remember, each situation is unique and seeking legal advice prior to termination can save an organization from prolonged hardship in the future.

Contact Achkar Law 

If you are an employer and are considering terminating one or more employees, or an employee who has been terminated, our team of experienced employment termination lawyers 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.