the law of dismissal
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Optimum TalentNovember 29, 2013
Toronto
Presented by
Stuart E. Rudner
The Law of Dismissal
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Common Myths
Every employee has a probation period during which they can be dismissed without notice or cause.
Unless a contract states otherwise, employees are only entitled to the Employment Standards Act minimum amounts of notice / severance
You have to give a dismissed worker a “package”
The common law requires one month of notice for every year of service (or two weeks for every year, or some other absolute amount).
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How Much Notice / Severance?
Pay in lieu of notice of dismissal includes base salary only
Termination clauses are not enforceable Only the most recent period of employment
counts when calculating entitlement to severance pay
You can’t fire someone in Canada Providing positive or negative references to
dismissed employees can result in liability
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Dismissals 2 types: With cause or
without cause
If with cause, no further obligation to employee
Otherwise, need to assess employee’s entitlements to
notice/pay in lieu/severance
No “near cause”
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Without Just Cause
Notice of Dismissal or Pay in Lieu
Two sources of entitlement– Employment Standards Act /
Canada Labour Code– Common Law
Can contract out of common law
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Common Law: The Length of Notice
Requirement: “reasonable” notice of dismissal
The Bardal Factors 1) Length of service2) Age3) Position / Character of Employment4) Availability of Similar Employment
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What is “reasonable”?
No “rule of thumb” or direct 1:1 relationship between years of service and months of reasonable notice
Beware the short-term employee Inducement
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Statutory Notice Requirements
*plus severance
Length of Employment Notice Required
Less than 3 months None
3 months but less than 1 year 1 week
1 year but less than 3 years 2 weeks
3 year but less than 4 years 3 weeks
4 year but less than 5 years 4 weeks
5 year but less than 6 years 5 weeks
6 year but less than 7 years 6 weeks
7 year but less than 8 years 7 weeks
8 years or more 8 weeks
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Reasonable Notice Periods
0
0.5
1
1.5
2
2.5
3
.6 to 2.5 2.6 to 5 6 to 10 11 to 15 16 to 20 21 and25
26 and30
31 and35
36 and40
Years of Service
Months/Year of Service
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0-2 Years of Service
Position Average Range
Clerical 2.82 .2-12
Supervisory 3.67 .2-9
Sales 3.54 .01-15
Lower Mngmnt 3.42 1-10
Upper Mngmnt 6.76 3-12.75
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17-19 Years of Service
Position Average Range
Clerical 10.58 6-15
Supervisory 12.63 9-16
Sales 13.67 8-18
Lower Mngmt 13.38 7-24
Upper Mngmnt 18.14 12-24
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The Changing Times
End of mandatory retirement, people working longer --> Wrongful dismissal claims by workers in 70s and 80s!
Recent decision:I do not think there is a place in this social reality for an automatic presumption that
persons should or would naturally retire on reaching senior age.
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The Changing Times
Di Tomaso v. Crown Metal Packaging Canada LP:
there is recent jurisprudence suggesting that, if anything,
(position/character of employment) is today a factor of declining relative
importance.
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Without Cause: Options
Working notice– must allow opportunity to
look for new employment Salary & benefit continuance
– Clawback Lump-sum Combination
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Disability Coverage
Disconnect between law and insurers Huge potential liability of dismissed
employee becomes disabled during notice period
Options:– Address in employment contract– Obtain Release– Arrange alternative coverage
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Dismissals for Just Cause
Capital Punishment of Employment Law Employer must prove:
1. that the alleged misconduct took place, and
2. that the nature or degree of misconduct warranted dismissal, bearing in mind all relevant circumstances
Proportionality is guiding principle – “punishment must fit the crime”
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The Contextual Approach
Employer must consider all circumstances, not just alleged misconduct– Length of service– Disciplinary history– Nature of position
No absolute rules Same set of facts can yield different
results
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Performance Issues
Employer must:Set a clear, reasonable standardCommunicate expectationsMeasure the performanceTake appropriate action
– Warnings (verbal and written) – document everything!
– Counseling– Training
Allow reasonable time for improvement
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Off-Duty Conduct Generally, what you do on your time is your
business Unless
– The conduct renders the employee unable to perform his duties satisfactorily.
– The conduct interferes with the efficient management of the operation or workforce.
– The conduct leads to a refusal or reluctance of other employees to work with him.
– The conduct harms the general reputation of the Employer, its product or its employees.
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The Importance of the Investigation
Investigate first Ensure fairness, objectivity,
thoroughness Give opportunity to respond Often, employee response is critical
factor in determining appropriate discipline
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Vernon v. British Columbia 30 year employee accused of
bullying/harassment Known as “The Little General” Offensive language, racial and other
inappropriate comments
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Human Rights Claims
Cannot dismiss based upon protected ground
Caution when applying performance requirements
Even if tiny part of reason was protected ground despite other legitimate reasons
Potential for “general damages” plus damages for loss of income from date of dismissal to date of hearing
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Constructive Dismissal
Unilateral and substantial change to a fundamental term of the employment contract
Not only money – position, duties, location, prestige, reporting, etc
Explicit or implied right You can’t just change the contract
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Employment Agreements
Use them!
Do it properly– Before there’s already an agreement– With consideration– Explained and understood– Independent legal advice
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Employment Agreements
Basic Checklist:– Duties (maintain flexibility)– Remuneration and benefits (maintain
flexibility)– Restrictive Covenants– Vacation– Termination– No conflicting obligations
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Employment Agreements
Basic Checklist (cont’d):– Hours of work– Vacation / holidays– Dress code– Conflict of interest– Expenses– Social Media
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Termination Clauses
Avoid uncertainty of “reasonable notice” & reduce dismissal costs
Use clear language Don’t go below employment
standards Address benefits Address mitigation
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Implementing PoliciesA. Have a policyB. Use clear and unambiguous languageC. Keep the policy up to dateD. Publicize the policyE. Make employees aware of concernsF. Ensure supervisors and managers are
aware of the policy and how to monitorG. Monitor behaviourH. Discipline violators
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Stuart E. Rudner
647.255.3100www.rudnermacdonald.com
Twitter: @CanadianHRLawLinkedIn: Connect with me, join the Canadian HR Law Group and visit the
Rudner MacDonald PageBlog: Canadian HR Law
http://www.hrreporter.com/blog/canadian-hr-law
FaceBook: Rudner MacDonald PageGoogle+: Canadian HR Law, Rudner
MacDonald PageYouTube: Rudner MacDonald channel