the law of dismissal

Optimum TalentNovember 29, 2013

Toronto

Presented by

Stuart E. Rudner

The Law of Dismissal

2

Common Myths

Every employee has a probation period during which they can be dismissed without notice or cause.

Unless a contract states otherwise, employees are only entitled to the Employment Standards Act minimum amounts of notice / severance

You have to give a dismissed worker a “package”

The common law requires one month of notice for every year of service (or two weeks for every year, or some other absolute amount).

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How Much Notice / Severance?

Pay in lieu of notice of dismissal includes base salary only

Termination clauses are not enforceable Only the most recent period of employment

counts when calculating entitlement to severance pay

You can’t fire someone in Canada Providing positive or negative references to

dismissed employees can result in liability

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Dismissals 2 types: With cause or

without cause

If with cause, no further obligation to employee

Otherwise, need to assess employee’s entitlements to

notice/pay in lieu/severance

No “near cause”

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Without Just Cause

Notice of Dismissal or Pay in Lieu

Two sources of entitlement– Employment Standards Act /

Canada Labour Code– Common Law

Can contract out of common law

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Common Law: The Length of Notice

Requirement: “reasonable” notice of dismissal

The Bardal Factors 1) Length of service2) Age3) Position / Character of Employment4) Availability of Similar Employment

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What is “reasonable”?

No “rule of thumb” or direct 1:1 relationship between years of service and months of reasonable notice

Beware the short-term employee Inducement

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Statutory Notice Requirements

*plus severance

Length of Employment Notice Required

Less than 3 months None

3 months but less than 1 year 1 week

1 year but less than 3 years 2 weeks






8 years or more 8 weeks

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Reasonable Notice Periods

0

0.5

1

1.5

2

2.5

3

.6 to 2.5 2.6 to 5 6 to 10 11 to 15 16 to 20 21 and25

26 and30

31 and35

36 and40

Years of Service

Months/Year of Service

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0-2 Years of Service

Position Average Range

Clerical 2.82 .2-12

Supervisory 3.67 .2-9

Sales 3.54 .01-15

Lower Mngmnt 3.42 1-10

Upper Mngmnt 6.76 3-12.75

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17-19 Years of Service

Position Average Range

Clerical 10.58 6-15

Supervisory 12.63 9-16

Sales 13.67 8-18

Lower Mngmt 13.38 7-24

Upper Mngmnt 18.14 12-24

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The Changing Times

End of mandatory retirement, people working longer --> Wrongful dismissal claims by workers in 70s and 80s!

Recent decision:I do not think there is a place in this social reality for an automatic presumption that

persons should or would naturally retire on reaching senior age.

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The Changing Times

Di Tomaso v. Crown Metal Packaging Canada LP:

there is recent jurisprudence suggesting that, if anything,

(position/character of employment) is today a factor of declining relative

importance.

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Without Cause: Options

Working notice– must allow opportunity to

look for new employment Salary & benefit continuance

– Clawback Lump-sum Combination

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Disability Coverage

Disconnect between law and insurers Huge potential liability of dismissed

employee becomes disabled during notice period

Options:– Address in employment contract– Obtain Release– Arrange alternative coverage

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Dismissals for Just Cause

Capital Punishment of Employment Law Employer must prove:

1. that the alleged misconduct took place, and

2. that the nature or degree of misconduct warranted dismissal, bearing in mind all relevant circumstances

Proportionality is guiding principle – “punishment must fit the crime”

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The Contextual Approach

Employer must consider all circumstances, not just alleged misconduct– Length of service– Disciplinary history– Nature of position

No absolute rules Same set of facts can yield different

results

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Performance Issues

Employer must:Set a clear, reasonable standardCommunicate expectationsMeasure the performanceTake appropriate action

– Warnings (verbal and written) – document everything!

– Counseling– Training

Allow reasonable time for improvement

Off-Duty Conduct Generally, what you do on your time is your

business Unless

– The conduct renders the employee unable to perform his duties satisfactorily.

– The conduct interferes with the efficient management of the operation or workforce.

– The conduct leads to a refusal or reluctance of other employees to work with him.

– The conduct harms the general reputation of the Employer, its product or its employees.

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The Importance of the Investigation

Investigate first Ensure fairness, objectivity,

thoroughness Give opportunity to respond Often, employee response is critical

factor in determining appropriate discipline

Vernon v. British Columbia 30 year employee accused of

bullying/harassment Known as “The Little General” Offensive language, racial and other

inappropriate comments

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Human Rights Claims

Cannot dismiss based upon protected ground

Caution when applying performance requirements

Even if tiny part of reason was protected ground despite other legitimate reasons

Potential for “general damages” plus damages for loss of income from date of dismissal to date of hearing

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Constructive Dismissal

Unilateral and substantial change to a fundamental term of the employment contract

Not only money – position, duties, location, prestige, reporting, etc

Explicit or implied right You can’t just change the contract

Employment Agreements

Use them!

Do it properly– Before there’s already an agreement– With consideration– Explained and understood– Independent legal advice


Basic Checklist:– Duties (maintain flexibility)– Remuneration and benefits (maintain

flexibility)– Restrictive Covenants– Vacation– Termination– No conflicting obligations


Basic Checklist (cont’d):– Hours of work– Vacation / holidays– Dress code– Conflict of interest– Expenses– Social Media

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Termination Clauses

Avoid uncertainty of “reasonable notice” & reduce dismissal costs

Use clear language Don’t go below employment

standards Address benefits Address mitigation

Implementing PoliciesA. Have a policyB. Use clear and unambiguous languageC. Keep the policy up to dateD. Publicize the policyE. Make employees aware of concernsF. Ensure supervisors and managers are

aware of the policy and how to monitorG. Monitor behaviourH. Discipline violators

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Stuart E. Rudner

[email protected]

647.255.3100www.rudnermacdonald.com

Twitter: @CanadianHRLawLinkedIn: Connect with me, join the Canadian HR Law Group and visit the

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