Page 28 - GBC ENGLISH spring 2024

One interesting scenario that arose at the conference was the case of employers providing benefits to employees while on layoff. I applaud the practice for retention and company culture purposes. However, in most jurisdictions, providing benefits to an employee on layoff extends the duration of the allowed layoff period. Thus, when you bring them back, it could be deemed continuous employ- ment. It is important that you verify exactly what your Act or Code states in relation to layoffs and concurrent employment.
TERMINATIONS
Terminations can be a significant source of liability for employers. There are primarily two different types of terminations: with cause or without cause.
Terminations with cause are relatively rare in today’s employ- ment landscape. This is because the bar to terminate with just cause is a difficult standard to meet. This is especially true if you are in Ontario where you also must meet the bar of willful misconduct as per the Employment Standards Act, 2000.
Just cause can be defined as “serious employee misconduct during the employment relation- ship that strikes at the very root of the employment contract such that it can be said that the employment contract cannot continue or be
repaired.” Typically, you meet the bar of just cause when an employee commits a single egregious act or a series of acts that culminate into an egregious outcome. An example of an egregious act could be theft (breach of trust), sexual harassment, or workplace violence. A series of acts that culminate into being egregious is a reference to a properly administered progressive discipline process.
Willful misconduct is defined as “an act or series of acts that in culmination are egregious and intentional or deliberate”. In Ontario, in addition to meeting the bar of just cause, the employer must prove the employee’s action(s) were intentional or deliberate. This has proven, via recent case law, to be a difficult task.
Besides the fact that the bars of just cause and/or willful misconduct are difficult to overcome, there are practical reasons why employers choose to terminate without cause. Employees terminated with cause receive no termination pay, are not eligible for employment insurance, and are often angry which equals a potential lawsuit. Win or lose, the cost of a lawsuit may cost the employer more than simply paying the employee out.
In most jurisdictions, you can terminate an employee for any reason by simply paying the employee what they are entitled to.
“In most jurisdictions, you can terminate
an employee for any reason by simply paying the employee what they are entitled to.”
Every Act or Code will prescribe the amount of termination pay the employee is owed based on their years of service. In Ontario and Federal jurisdictions, the employee is also entitled to severance. And, in every jurisdiction, except Quebec, employees may be entitled to common law compensation.
Common law compensation can be expensive. For longer term employees, it can be up to two years of pay or more if there are exceptional circumstances. Factors the courts will consider, referred to as Bardal factors, include the employee’s years of service, age, position, salary, and the availability of comparable employment. There are no hard rules or outcomes, and common law entitlement is determined on a case-by-case basis. Remember, you can mitigate your liability with a very well-crafted termination clause as part of the original agreement.
This article is intended for informational purposes only. This article does not constitute legal advice and should not be relied upon for same.
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Termination