The end of an employment relationship is never easy – whether you are an employee who just received the news, or an employer who has to provide a termination letter, chances are, it won’t be a pleasant experience for either parties. Employers and HR professionals should ensure that they are following the correct protocols and steps when it comes to a termination without cause in Ontario and should know what to look out for. This article provides an overview of terminations without cause in Ontario, so that you can feel better prepared.
In Ontario, employers have the right to terminate their employees for any reason so long as it is for just cause or the employer provides the necessary notice or pay in lieu. This can be for reasons such as downsizing, financial hardship, or the removal of the employee’s position. The amount of notice that the employee is entitled to will depend on a number of factors, and employers should seek the advice of a competent employment lawyer before providing a termination package.
Limitations to termination without cause
While an employer can termination an employee for any reason, there are limitations to this – the termination cannot be for a discriminatory reason. This includes:
- A termination based on one of the protected grounds under Ontario’s Human Rights Code
- A termination as a result of the employee asserting their rights, whether this be human rights, health and safety, or any other protected workplace right the employee has.
As aforementioned, for a termination without cause in Ontario, employers must provide notice or pay in lieu thereof, and in some cases they must also provide severance pay, which has its own legal requirements.
In a termination without cause, an employer typically has the options to:
- Provide working note, where the employee continues to work up to a future end date;
- Provide payment that compensates for time that the employee should have been provided; or
- A combination of working notice and pay in lieu of notice.
Employers should be aware that there are particularities for federal and unionized workers, where federal employees generally cannot be fired without cause, and unionized workers are governed by the applicable collective agreement, which is relevant in the determination of notice and the manner of terminations.
Entitlements upon termination
In Ontario, termination entitlements are impacted by legislation such as the Employment Standards Act (“ESA”), as well as the enforceability of provisions found in the employment contract and common law.
If an employer wishes to provide their employees with the statutory minimums found in the applicable legislation, the employer should ensure that their employment agreement sufficiently limits the employee’s entitlements to the minimums. Otherwise, an employee is entitled to higher amounts of notice based on common law.
It is important to note that probationary employees may not be entitled to any notice, depending on the employment contract and the relevant termination and notice clauses. As per the ESA, a probationary period lasts for a maximum of 3 months after the commencement of employment.
Legal advice for terminations without cause
Terminations without cause in Ontario can be riddled with details that if left unnoticed, can open the employer up to additional liability. Due to recent legal developments, many provisions in an employment contract that aim to limit an employee’s notice to the legislated minimums are no longer valid. As such, employers should seek the advice of a competent employment lawyer to ensure that they are protected, and are not opening themselves up to unnecessary liability.