Temporary Layoffs , Terminating Employees
Few employers realize the liability they are exposing themselves to by failing to have adequate legal protections when hiring employees until it’s too late. A frighteningly large number of employers, some very large, have incredibly weak employment contracts that allow any savvy terminated employee to run roughshod over them. Without a well-drafted employment contract you can end up paying tens of thousands more in severance then you bargained for every time you fire an employee. We should know; we’re often the ones that get them that money. It can add up fast.
Employers often fall in the pitfalls by terminating the employee too fast without establishing the grounds for termination or in some cases for cause. It is true that I also represent employees, however, my many years of dealing with employment wrongful terminations has let me experience the shortcoming that the employers fall into which could have been avoided if dealt with in time.
Employers tend to terminate the position of an employee without having any cause. They call it to cause dismissal, which normally will cause the employer a substantial amount of monetary cost to deal with at court. Legal fees and other costs could be avoided if approached properly.
Most employers fail even to pay the minimum statutory in lieu of notice, which is illegal. The in lieu notice must be paid to the employee. Sometimes they find themselves in a situation where they try to establish cause and they pay the in lieu notice payment. The employee then argues that the reason to pay minimum statutory pay is because there was no cause.
It may be true that the employers pull the trigger too fast by terminating the employee without establishing a foundation for cause. Sometimes the event simply does not rise to the level of cause and the employer terminates the position of the employee without realizing that they got themselves in a wrongful dismissal lawsuit.
The wrongful dismissal occurs when an employer dismisses an employee without providing adequate severance pay or in lieu of notice minimum statutory remuneration compensation. It is true that the employers have the right to terminate the position of the employee at any time, even without reason, as long as the reason is not based on discriminatory or infringes the Human Rights Codes (such as citizenship, race, place of origin, ethnic origin colour, ancestry, disability, age creed, sex/pregnancy, family status, marital status, sexual orientation, gender expression, receipt of public assistance, and record of offences). It is further true that if the employer establishes cause, they do not have to pay any severance or in lieu of notice compensation.
Common-law and Minimum Statutory
The difference between the common-law and minimum statutory pay is one is greater than the other. The common-law in a Non-unionized company is based on position, length of employment, age, salary, etc. Other factors will be determined on how much remuneration an employee will be entitled to, and it could go up to 24 months pay. In the federal jurisdiction, an employee with at least 12 consecutive months of employment with the same employer is entitled to severance pay upon termination. In Ontario, where 50 or more employees are terminated in a period of six months or less, OR one or more employees are terminated by an employer with an annual Ontario payroll of at least $2.5 million, the employer is required to pay severance pay to each employee who has been employed for five years or more.
The Contract and Enforceability
Technically, the enforceability of the contract is based on the language that is being used to materialize the employment contract. If the provision of the contract has a termination clause which clearly and unequivocally shows on the event of termination, the employee is only entitled to “Employment Standard Act”. This is the minimum statutory entitlement the employee may be entitled to. The enforceability of the contract often raises an argument whether the employer has given the opportunity by providing ample time to review the contract and getting legal advice. In other enforceability of the contract, by providing a contract to an employee to sign after the employee has already started working for the company, it also makes the contract invalid.
Temporary layoff is a termination if the layoff is more than 13 weeks in any period of 20 consecutive weeks. In less than 35 weeks in any period of 52 weeks, however, the employee may terminate his position and demand for his full severance pay. Nevertheless, under Federal jurisdiction, a layoff is not considered to be termination for the purpose of severance pay, group or individual termination. However, it is not recommended that the employee attempt to quit based on this information. It is always best to get legal advice before commencing any action noted above. The information above is intended for general information and it is not considered legal advice. Should you require legal advice, please contact Oracle Legal Services to book an appointment.
Oracle Legal Services can help you protect your rights and draft a reasonable employment contract that complies with all relevant laws and doesn’t expose you to unnecessary risk. Internet contract templates just don’t offer sufficient protection. We know all the tricks lawyers and paralegals use to challenge employment contract provisions because we use them ourselves. With the help of Oracle Legal Services you can protect yourself from the potentially unforeseen consequences of terminating an inadequate employee.