Employees have certain legal rights when it comes to their employment relationship. The availability of these rights may exist either at common law or they may be provided for in an employment contract between the employee and the employer. This blog post will focus on providing a high-level review of some of these rights, which apply upon termination of the employment relationship.
The Employment Contract and Notice of Termination
An employment contract is the governing document that outlines the terms of the relationship between an employer and an employee. It can be documented in writing, or it may be oral or implied. Typically, an employment contract sets out details related to job responsibilities, employment duration, work schedule, compensation, and benefits. The employment contract also defines the roles, responsibilities, compensation, and benefits available to the employee. It can also include the obligations of both parties when it comes to terminating the relationship.
Generally, the employee or employer can terminate the relationship at any time without giving cause or notice. Where there is a valid employment contract in place, it may include language that requires the terminating party to provide notice, in which case this obligation is binding. However, the notice required by the employer is subject to the rules of the Employment Standards Act (also referred to as the “ESA”).
The Employment Standards Act
Under the Employment Standards Act, in the event of a dismissal without cause, the employer must give “reasonable” notice or pay in lieu of notice. The amount of notice considered “reasonable” increases with the duration of the employee’s employment, as summarized below:
- Less than one year – one week before termination,
- One year or more and fewer than three years – two weeks before termination,
- Three years or more and fewer than four years – three weeks before termination,
- Four years or more and fewer than five years – four weeks before termination,
- Five years or more and fewer than six years – five weeks before termination,
- Six years or more and fewer than seven years – six weeks before termination,
- Seven years or more and fewer than eight years – seven weeks before termination, or
- Eight years or more – at least eight weeks before termination.
What may be considered “reasonable” is also subject to the common law. In the event of termination (and generally, a termination of employment that has lasted more than eight years), the courts will consider factors such as the “character” of the employment, the length of the employment, the age of the terminated employee, and additional circumstances, as the statutory minimum notice requirement may not be sufficient in every case.
However, it is essential to note that employers who have a just cause for dismissal are not required to give notice to the terminating employee. Employees are under no similar obligation unless explicitly required under the employment contract.
Payment in Lieu of Notice
The Employment Standards Act permits the employer to either provide the employee with notice in accordance with the above-outlined timeline or provide payment in lieu of notice. In the latter, the employer will be required to compensate the terminated employee pay and benefits equal to the amount the employee would have earned during the applicable notice period. As previously noted, notice in addition to the minimum notice requirements may also apply if the court finds it appropriate. Nonetheless, whether the employer provides an employee with notice or pay, if the employee seeks to argue that such notice or payment is insufficient, they bear the burden of establishing such.
Probationary and Fixed Term Notices
The notice period differs for employees in a probation period or on a fixed-term contract.
Generally, a probationary employee (i.e., an employee who has been employed for less than three months) is not entitled to notice or pay in lieu of same. However, an employer is not free from legal responsibility when terminating an employee within the probation period. The common law has imposed a duty on the employer to satisfy a three-prong test, showing that:
- The probationary employee was given a reasonable opportunity to demonstrate suitability for the job;
- The employee was found not suitable for the job; and
- The employer’s dismissal decision was based on an honest, fair, and reasonable assessment.
A fixed-term employee is also not entitled to notice or pay due to the nature of the fixed-term contract. Under such employment contracts, the employee is aware that the employment relationship has an end date and neither party has a duty to renew the contract. The caveat here is that, if the employer chooses to terminate the employee during the contract, the employee would be entitled to the compensation they would have earned unless the contract stipulates differently.
“Just Cause” Termination
An employer has the right to terminate the employment relationship for “just cause” which means they are not required to provide notice or pay. However, the conduct necessary to meet this standard is governed by the common law. An example of conduct resulting in “just cause” can include severe misconduct and incompetence. In such an assessment, the employer will be responsible for demonstrating that it provided reasonable, objective standards for the employee to meet, the employee failed to meet these standards, the employer had previously warned the employee of their failure, and the employee was provided with the opportunity to correct their incompetence.
Contact the Employment Lawyers at Bader Law to Help Resolve Employment Contract Disputes
The trusted employment lawyers at Bader Law help demystify employment laws for employees and empower them with the necessary knowledge to enforce their rights at various stages throughout the employment relationship. Our team helps simplify the law in order to provide clients with a comprehensive understanding of their options in order to help them make informed decisions in the event of a dispute. Our lawyers regularly advise employees on discrimination matters, accommodation of disability and illness, harassment in the workplace, wrongful dismissal, and severance packages. Call us at 289-652-9092 or contact us online to schedule a consultation with our experienced employment law team member.