In a recent Ontario Superior Court decision it was held that an employer’s decision to request a criminal background check after employment had commenced was lawful under the applicable 12–month fixed term contract and the employee was not entitled to damages when her employment was terminated after she refused to consent to the background check.
As an employment lawyer, my consistent advice to employers is, whether you have one employee or one hundred employees, every employer needs to have written employment contracts. There are a number of ways that employment contracts can avoid or reduce liability, but the single most valuable term to include is a termination clause. In a written employment contract, employers have the opportunity to limit what can otherwise be a significant liability to their employees for termination pay, also referred to as severance or reasonable notice of termination.
It appears that the saga of judicial interpretation and consideration of termination clauses will continue, with predictably unpredictable results. Courts will enforce termination clauses that limit an individual’s entitlement to notice of dismissal, but the onus will be on the employer to show that the clause should be enforced.
The three popular articles this week on HRinfodesk deal with: a case where an employer’s appeal to not pay unpaid wages and termination pay was somewhat successful; a matter where an arbitrator issued very different decisions when it came to two employees who grieved their terminations; and two cases that address employee entitlement to damages in lieu of a bonus on termination.
Employers who fail to incorporate a binding termination clause into their written employment agreements may face significant, and unexpected, liability for severance. This lesson was learned the hard way by Qualified Metal Fabricators (“QML”) in a recent case out of Toronto.
This decision is another reminder to employers to ensure that termination clauses provide for all entitlements prescribed by the Employment Standards Act in order for them to be considered valid and enforceable. The company in this case should never have carved out its obligation to provide statutory Severance Pay.
It is clear from the relevant statutory and regulatory provisions under the Employment Standards Act, 2000 that an employee whose contract is frustrated on account of illness or injury is entitled to both termination pay and severance pay.
Three popular articles this week on HRinfodesk deal with statutory severance pay; unjust dismissal; and, napping while on duty.
Anyone involved in human resources may think that if an employee who works in a manufacturing facility surrounded by potential health and safety hazards is found sleeping on the job on more than one occasion, they should be dismissed for cause and disentitled to severance of any kind. That would be a reasonable “gut reaction” to this type of fact situation. In fact, such decisions are routinely upheld by both the courts and labour arbitrators.
This post is focused on common traps that many employers fall into in the course of termination. While it is written from the perspective of employers, each of these points applies equally to employees, since an individual that misunderstands these issues will fail to enforce their legal rights and end up leaving substantial amounts of money on the table when they lose their job.
On November 6, 2014, Bill 18, the Stronger Workplaces for a Stronger Economy Act, 2014 received third reading at the Ontario legislature. When Bill 18 receives Royal Assent several significant changes will take effect that will benefit employees.
Three popular articles this week on HRinfodesk deal with the substantial failures of an employer’s management policy; the consequences of failing to pay employees on time; and, an employee’s access request to records.