pay in lieu of notice
One of the questions at the forefront of many employers’ minds when they are considering terminating an employee without cause is how much it is going to cost. Unless there is a written employment contract with an express termination clause, an employer’s obligation is to provide reasonable notice of termination. Since there is no set formula for determining the appropriate length of the reasonable notice period, employers (or their legal counsel) must estimate what they think the notice period could be, having regard to the employee’s age, length of service, character of employment, the availability of similar employment, and the employee’s skills and training. Often, employers and their legal counsel will use a rough rule of thumb of one month notice per year of service (although the courts have denied that such a rule of thumb exists).
Most of the time when employers look to terminate an employee they opt for pay in lieu of notice. Yet pay in lieu of notice can be costly, it can discourage mitigation and it may hurt productivity (if a suitable replacement has yet to be found). An often overlooked approach is providing working notice that satisfies both statutory and common law obligations.
A recent decision of the Ontario Court of Appeal, confirming a trial decision, once again demonstrates the difficulty employers will face in satisfying courts in this province that there was cause for dismissal.
Most people assume that they know what a probationary period is and how it works in Canada. Unfortunately, however, there are many misconceptions with respect to the law in this regard, and many employers unknowingly expose themselves to significant liability when they hire new employees.
Even in the absence of a release, employee who accepted a termination package not entitled to additional damages
If an employee negotiates a termination package with an employer but does not sign a release, can they successfully claim additional pay in lieu of notice in a court action? Interestingly, the Ontario Superior Court recently held that the answer for one employee in these circumstances was “no”.
The three most viewed articles on HRinfodesk this week deal with extended health care plan payments, the review of existing employment contracts and the possible taxable benefit of employer-provided cars.
There is an implied term of the employment contract that when an employee is terminated without cause, they will be provided reasonable notice of termination. (Of course, an employer can avoid the reasonable notice requirement by including an express provision regarding termination in the employment contract.)
Our federal government’s recent introduction of proposed reforms to the employment insurance system has prompted the expected furor from both sides of the debate…
I always advise clients to consider their options when they must dismiss an individual (assuming it is without cause). Rather than automatically offering a package, and paying the employee not to work, I encourage our clients to consider whether a period of working notice could be viable. By doing so, at least they would get some value for their money. However, I often think back to a comment made by Mr. Justice Donnelly of the Ontario Superior Court of Justice, who, in the course of considering a wrongful dismissal claim, opined that “[w]orking notice is an institution almost invariably predestined to fail.”