For an employer, termination is a reality of business and it is important to ensure that employees are treated fairly while at the same time minimizing disruption to your organization.
What is a Wrongful Dismissal?
Termination of employment is a difficult process for both the employer and employee. An employer is free to terminate employment at any time for any reason as long as it is not in violation of human rights (e.g., due to pregnancy or leave) or other applicable employment legislation or labour standards.
If you are the employer, you must act in good faith and handle the termination process professionally, in a way that treats the employee fairly, preserves the employee’s dignity, and complies with legislative and common law requirements.
If you are an employer confronted by the prospect of terminating an employee you should contact competent legal counsel at the outset for guidance as to what your obligations are to the employee, how to communicate the termination to the employee and how to manage your organization so as to ensure minimal disruption to your business.
If you are the employee, know that most terminations are through no fault of the employee. Be careful not to sign any documentation without first consulting with a lawyer to ensure that your legal rights and entitlements are protected and you are treated fairly.
Reasonable Notice Period
A key consideration upon termination for both employees and employers is: what is an appropriate reasonable notice period? A starting point is provincial labour standards legislation (Labour Standards Act, 1990) but a full determination takes into consideration a number of factors including: length of service, age of employee, the character of employment and the availability of similar employment.
Determination as to what is a reasonable notice period is often a complicated question based on the facts of the specific case and legal advice should be obtained.
Termination Without Cause
Dismissal that is “not for cause” is when an employee is terminated for reasons unrelated to his or her own performance. For example, the company may be headed in a different direction or company performance may be poor. Either a notice of termination or termination pay in lieu of reasonable notice is required. A severance package may also be required.
While notice cannot be less than the statutory minimum, there is no exact formula to determine how much notice is actually fair. Any amount above the statutory minimum will normally depend on the employer, the employee’s title and the individual employment contract. The higher the employee’s ranking in the organization, the more notice is generally provided in order to give the employee a reasonable time period to find work elsewhere.
Dismissal With Cause
Dismissal for cause (also known as “just cause”) is where the relationship between the employer and employee is severed due to an act or omission by the employee (e.g., theft, dishonesty, insubordination, incompetence). In these rare situations, the employer is not required to give notice or termination pay.
Wrongful dismissal is when an employer terminates the employee without cause and fails to provide the required notice of termination or a fair payment in lieu of reasonable notice. It is not necessarily the act of terminating employment that makes a dismissal wrongful. Instead it is the absence of fair compensation in lieu of reasonable notice.
Wrongful dismissal may also apply when an employer terminates an employee with cause; the legal standard is high and the burden of proof that the termination was fair rests with the employer. If you believe you have been wrongfully dismissed, you should contact a lawyer to discuss your situation and obtain legal advice.
Common Law in Canada
Given the importance of one’s employment and the anxiety that flows from being wrongfully terminated, a common question raised by clients is: can damages be sought for mental distress resulting from the manner in which the termination took place? The Supreme Court of Canada in 2008 (2008 Supreme Court of Canada decision against Honda Canada Inc.) answers this question in the affirmative by developing the concept of "moral damages" which may be sought when a wrongfully dismissed employee suffers mental distress owing to the actions of the employer in the manner of dismissal.
The leading decision in this Province was rendered in 2014 in Turner v. Newfoundland and Labrador Legal Aid Commission (2014 Newfoundland and Labrador Supreme Court decision) where in finding for the Plaintiff the Court, in addition to awarding $168,864.88 for reasonable notice, $42,499 for vacation entitlement, $36,647 for severance, plus amounts for CPP and pension entitlement, awarded $30,000.00 in moral damages due to the bad faith demonstrated by the employer in how the employee was treated in the course of termination. Gittens & Associates was pleased to act for the Plaintiff in that case and assisting him in obtaining a just result for his wrongful termination.
Contact the St. John’s Lawyers at Gittens & Associates
We regularly advise and assist employers or employees in navigating their legal rights and responsibilities under the law.
Please note the foregoing is intended to provide information of a general nature only and does not constitute legal advice.
Should you have any questions or wish to discuss your matter, please contact our office.