Those of us that practice employment law understand that our Courts will not hesitate to deem a termination clause in an employment agreement unenforceable if they are provided with a reasonable basis upon which to do so. In recent times, we have seen two noteworthy cases that have dealt with termination clauses and been decided in favour of the employee. Employers and their counsel should be mindful of these cases as they implement employment agreements, if they hope to be able to rely upon them.
The three most viewed articles on HRinfodesk this week deal with temporary layoff, why women receive less severance than men, and changes to first aid requirements under the Canada Labour Code.
In Ontario, employers owe vacation pay on employee wages. Wages are defined in section 1 of the Employment Standards Act to include “any payment required to be made by an employer to an employee.” Here is where it gets tricky. In Ontario, the employment standards may require two separate types of payments to an employee who is terminated without cause.
The recent firing of Toronto Transit Commission head Gary Webster makes it difficult for the city to claim it is trying to run like a business. Webster, a 37-year TTC employee, was a year away from the end of his contract, and his termination without cause will likely cost the city at least $500,000 in severance pay, not to mention the costs associated with replacing him.
When I speak at conferences, I am often asked the following question: “Is severance pay required when an employee is terminated?”
Before this question can be answered, we have to first confront the difficulty that some payroll terms traditionally used to describe both termination, as well as any payments resulting from this event, haven’t always been defined with the greatest of clarity. My preference has always been for those terms that convey the clearest meaning of the related employment standards and source deduction requirements.
A recent Ontario case dealt with an employee’s misconduct that clearly amounted to just cause for termination; however, the employee was still entitled to termination pay.
The Ontario Ministry of Labour has a new online Severance Entitlement Tool to help employers and HR professionals determine when a terminated employee is entitled to statutory severance pay.