Dealing With Termination Issues On the Cheap Can Get Pricey

Brian Bell

Toronto Employment Lawyer Brian Bell - Pace Law Firm: There have been a significant number of Termination Packages pass across my desk recently with one overwhelming similarity: the Employer tends to offer the Employment Standards Act Notice amount - and, if applicable, the severance amounts - plus a couple of weeks above these statutory amounts.

The Employer, for this additional time period above the minimum, requests a “Full and Final Release” on return.

It would seem that no matter how long the Employee has been with the company, this same approach would apply. In a recent edition of the Lawyers Weekly, Daniel Lublin at Whitten and Lublin recounts the case of Hussain v. Sinclair Canada Inc. Daniel Lublin represented Mr. Hussain.

Mr. Hussain was a 36 year employee who received only the equivalent of 9 months for a Termination Without Cause. At the time of the Termination, he was 65 years old. He had not retired. The Court, in its decision/award, exceeded the prior maximum of 24 months for a long-termed employee like Mr. Hussain. Thus, the Employer’s maximum exposure of 24 months Termination had been increased to 26 months, reflecting the Court's sympathy with long-termed employees who are offered a Termination Package that is viewed as clearly inadequate.

There are other reasons Employers should consider. Employers who feel they want to deal with the Termination issue “on the cheap” can be exposed to even more expense.

While this issue may be viewed to be applicable only to those employees with a long history with their company, it may be useful for employers to remember that offering slightly above the legislation's minimum may be a very costly strategy.

Termination Without Cause and Notice Periods

Brian Bell

by Brian Bell - Pace Law Firm: Most employers and employees think that a “Termination Without Cause” is all about money. However, there are other issues to consider. A Notice Period - whether issued under the Employment Standard Act or the Common Law - is basically a notification that the employer/employee relationship will be ending at some reasonable point in the future.

Throughout any Notice Period, all terms and conditions of the employment relationship must remain the same. Ironically, I see Termination Without Cause packages that limit the term of the fringe benefits (ie dental, eye glasses, so forth) that may be limited to the Employment Standards Notice while the additional Notice Period paid exclude these items as part of the Termination Without Cause package.

A significant portion of employees I see feel that this is not a significant feature. In some cases this could be accurate, especially if the employee’s spouse or partner has similar benefits. However, if the Notice Period is to reflect employment conditions throughout, why does the employer limit benefits which may also include employer pension contributions, group RSP contributions and so on? The cost of these features may be significant for the employer, but the overall cost of fringe benefits for the Notice Period is minimal in the overall scheme of things. Besides, it is quite possible these items could be used as a “negotiating” tool should the employee feel they deserve more than the Employment Standards or Common Law outline. In either case a “Release” would ultimately dictate the final agreement.

In any event, both the Employer and Employee need to be aware of their rights and obligations in the Termination Without Cause process.

Ultimately, both parties save time and money, and the employment period ends on a more positive note for each.

Planning Ahead to Deal With Termination Without Cause

by Brian Bell - Pace Law Firm: When a formal offer of employment is presented, termination is probably the last thing either the employer or the employee wants to think about.  But in this global  economy, there are no guarantees of employment until retired.   A considerable number of employers believe that on a termination “without cause” (ie. due to downsizing, business  downturn, and so on) all they need to do is provide the minimum as set out in the Employment Standards Act: 2000, Ontario.  By doing so, it might well be said that the employer is risking the fact that the costs of any wrongful dismissal will be less than they need to otherwise  pay out.

In a recent issue of Lawyers Weekly, author David Lublin points to a recent decision where the court with respect to the termination of a long serviced employee, awarded punitive damages in addition to full common law reasonable notice of 22 months (Brito v. Canac Kitchens [2011] O.J. No. 1117).

The employee had been provided with the Employment Standards minimum at the time of his termination without cause.

I have also had clients who after 20+ years of employment with the same employer receive the bare minimum that is required by the legislation.  And in this current uncertain economy, this thinking will likely continue.  So what to do?

In any offer of employment, companies should consider incorporating specific clauses dealing with termination without cause.  The offer of employment should spell out what the process would be should the employee be let go.  Essentially, such an approach gives the employee knowledge of what termination pay they might receive should they be terminated, and the employer is able to manage costs and risks based on the agreement between the two of them.

Neither party likes surprises. Neither party likes to spend unnecessary resources.  Planning ahead allows both the employee and the employer to manage their objectives.

Bill 168 and Workplace Violence

Brian Bell

by Brian Bell - Employment Attorney - Pace Law Firm: It has been a year since Bill 168 received Royal Ascent and was amended with the Occupational Health & Safety Act for Ontario (OHSA).

According to the Ministry of Labour, the changes to Bill 168 "strengthen protections for workers from workplace violence and address workplace harassment. They define workplace violence and harassment and describe employer duties, and...apply to all workplaces covered by the OHSA."

So what effect has this had since last year?  From my perspective,  I have seen two major reactions.

First, employees have become aware of their ability to file a complaint under the Act for such issues as bullying and verbal/physical intimidation.  Most of the complaints I've heard in the past year have been valid, while others have seemed a little shady; I have had inquiries claiming a bullying boss within the workplace that have appeared true, while I have had some that reflect the employer is simply requesting the employee to do their job satisfactorily and there is some resistance on the part of the employee.

On the other hand, I had one employer who in the name of the Act and ensuring compliance, took steps that in effect bullied the employees to such a degree that at least half the work force has resigned over the last year.

Employers may misinterpret the Act either on purpose or because they just don't understand it.  One employer, in response to an Order from the Ministry of Labour about a “domestic” issue overflowing into the workplace, felt that having a meeting with staff and championing the slogan “we want a safe workplace” was sufficient in meeting the requirements of the Act. I am sorry to say that having one meeting and coming up with a catchy phrase doesn't cut it. An educational program must be developed by employers in order to educate their staff, and employers must follow certain procedures to ensure compliance with the Act.

To learn more about what's involved in the Act, you can go to this link, or drop me an email here with any questions.

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