You Received a Termination Letter: Now What?

The Termination (of Employment) Letter in Ontario

Amidst a looming global recession and economic uncertainties, job terminations have become all too common. The ominous phrase “termination of employment” looms over many employees during these trying times.

Enter the termination letter. A termination letter is a formal written communication from an employer to an employee, officially informing the employee that their employment is being terminated. This letter typically outlines the reasons for termination, and any relevant details such as the effective date, and may include information about final pay and benefits.

On the other hand, a notice of termination is more general and refers to the advance notification given by an employer to an employee regarding the termination of their employment. This termination notice can be delivered verbally or in writing, and its purpose is to inform the employee in advance of the termination date, allowing them time to prepare for the transition.

In many cases, a termination letter is accompanied by a notice of termination. The termination notice period may vary depending on employment contracts, labour laws, and company policies. It’s important to consult relevant employment laws and adhere to the terms outlined in the employment contract or agreement when dealing with terminations.

How to Write a Termination Letter

Drafting a termination letter requires precision and professionalism. Begin with a clear opening, stating the purpose upfront. Provide specific reasons for the termination, avoiding unnecessary details. Include essential information like the effective date and any relevant details. Maintain a professional and empathetic tone throughout, offering support and resources for the transition. Encourage open communication and ensure alignment with company policies and legal requirements. Keep it concise, focusing on clarity and professionalism.

What You Are Owed for Termination of Employment

In Ontario, most employers must comply with the minimum requirements of the Employment Standards Act, 2000 (the “ESA”). Part of the ESA regulates termination of employment, outlining what an employee must provide the employee in such an event.

An employer can terminate your employment without cause at any time if they provide you with advanced written notice of your termination date or pay in lieu of that notice. Employers who provide an employee written notice may be required to work until their termination date.

The minimum amount of written notice required for termination is usually governed by the ESA, but how much working notice or pay in lieu of notice an employee is entitled to will depend on their unique circumstances.

Under the ESA, most employees who have at least 3 months of continued service with an employer are entitled to advanced notice or termination pay of 1 week, with an additional 1 week per year of service up to a maximum of 8 weeks.

Some employees may also be entitled to additional statutory severance pay under the ESA of 1 week per year of service up to a maximum of 26 weeks. To qualify, an employee must have worked at least 5 years for an employer with either:

  • An employee payroll of $2,500,000 per year; or
  • 50 or more “severed” employees in a 6-month period.

If there is no enforceable termination provision in a written employment contract or no written contract at all, an employee may also be entitled to common law reasonable notice for their termination.

Common law reasonable notice usually includes the employee’s minimum entitlements under the ESA but provides for more working notice or pay in lieu of notice as a whole. Reasonable notice is calculated based on a variety of non-exhaustive factors upon the termination of employment, including:

  • Age of the employee;
  • Years of service for the employer;
  • The character of the employee’s position;
  • Compensation of the employee;
  • Economic climate;
  • The employee’s geographic location; and
  • Other factors that will help determine how long it would reasonably take an employee to find comparable employment.

Common law reasonable notice is statistically awarded at a rate of 1 month per year of service up to a general cap of 24 months. This is not an explicit rule, and an employee’s unique circumstances could result in more or less owed reasonable notice.

While your employer may outline in the Termination Letter that the amount they are paying or offering you meets all their legal obligations to you upon the termination of employment, you should take their statements with a grain of salt.

The only way to determine what you are owed in severance and other damages upon the termination of employment is to consult with an employment lawyer as soon as possible. However, Termination Letters do need to meet some minimal standards.

What Must Be Included in a Termination Letter?

Employers must communicate a termination of employment clearly and directly. For instance, if a termination letter lacks a specific termination date, it may not be considered a proper notice of termination.

To assess if a termination letter triggers your severance entitlements, it hinges on how a reasonable person interprets its wording. This involves examining the context, industry norms, workplace specifics, and surrounding circumstances.

In Ontario, a termination letter must adhere to the Employment Standards Act (ESA). ESA violations in a Termination Letter may involve:

  • Incorrect calculations of ESA entitlements, like notice or pay in lieu of notice and benefit continuation duration.
  • Deductions from unpaid wages or vacation pay without your written consent.
  • Setting conditions before paying your minimum ESA entitlements, such as returning company property or signing a Full and Final Release.

If terminated without cause, your minimum ESA entitlements are fixed and non-negotiable. Verify your employer’s calculations in the termination letter, as some may use inaccurate “regular wages” figures.

Employers are not obliged to offer more than ESA minimums. They may propose additional compensation in exchange for a Full and Final Release, preventing post-employment lawsuits.

To assess if you’re entitled to more than offered in a Termination Letter, consult with legal experts. If you have a case for additional severance, you may pursue wrongful dismissal claims.

You Receive a Termination Letter – Now What?

Most employers meet with their employees to discuss termination of employment with their employee before providing a termination letter. It is important for you to stay calm and refuse to sign anything without a chance to review and seek independent legal advice.

You should read the termination letter carefully and gather any documents relevant to your termination of employment. The natural next step is to book a consultation with an employment termination lawyer to review the termination letter and discuss what you may be legally entitled to.

An employment termination lawyer can then help you understand your legal entitlements, the best next steps to take for your matter and negotiate your severance package with your employer. If early-stage negotiations fail, an employment termination lawyer can then help you sue your employer for your owed legal entitlements, advocate on your behalf, and continue negotiating to achieve your desired result.

Conclusion

If your employer terminates your employment, you may be entitled to advanced notice of termination or pay in lieu of such notice. How much severance you are owed is not necessarily limited by the ESA. It will depend on the facts of your case.

Your termination letter must be clear enough that a reasonable person in your shoes can understand the important details relating to the termination, such as the specific termination date. The termination letter’s contents must also comply with the ESA, and not purport to withhold your ESA entitlements triggered by termination of employment.

If you receive a termination letter, you should refuse to sign anything and consult with an employment termination lawyer as soon as possible. They can help you determine your legal entitlements, and what course of action to take moving forward. If your employer refuses to negotiate your severance, you may be able to sue for wrongful dismissal.

Contact Achkar Law

If you are an employer or an employee needing assistance with termination letters, our team of experienced employment termination lawyers at Achkar Law can help.

Contact us today at 1 (800) 771-7882 or email [email protected] , and let us help you find the solutions you need to move forward.

Handling Workplace Terminations, Dismissals, and Layoffs?

Whether you’re an employer managing the complexities of terminating employment or an employee facing dismissal or layoff, understanding the legal framework is essential for ensuring fair and respectful processes. Achkar Law offers comprehensive legal support to both employers and employees, providing clarity and guidance through these challenging times. Our team can help protect your rights and interests, offering peace of mind and strategic solutions.

 

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