Q: How much notice is required to terminate an employee?

A: For provincially regulated employers in Ontario, the amount of notice required to terminate an employee usually depends on a consideration of (a) the Employment Standards Act, 2000, which sets out an employee's minimum notice entitlements; and (b) the common law, which establishes an entitlement to "reasonable" notice of termination. For federally regulated employers, and for certain specialized classes of employees and occupations, different considerations may apply. The Employment Standards Act, 2000 sets out a schedule of notice periods that vary depending on the employee's length of service - employees with less than three (3) months of service are not entitled to notice and employees with eight (8) or more years of service are entitled to a maximum of 8 weeks notice. However, different considerations may apply where a larger number of employees are being terminated within a specific period of time - in a so-called "mass termination" scenario, the minimum notice required, even for a short-service employee, can range from 8 weeks to 16 weeks, depending on the number of employees affected.

Q: What is "reasonable" notice?

A: Under the common law, it is generally accepted that the purpose of giving notice is to allow the employee an opportunity to find another job. Therefore, what is "reasonable" notice will vary, depending on a consideration of factors such as the employee's age, years of service, character of employment, and so on - that is, factors that can be thought of as impacting on the length of time that a particular employee will require in order to find comparable alternative employment. Although there is a temptation to base an estimation of what is "reasonable" on length of service alone, or some other simple formula, the courts generally discourage that approach because it places undue emphasis on a single factor. Other considerations may influence the amount of notice that will be considered reasonable. For example, a short-service employee who was actively lured away from employment elsewhere may be entitled to more notice than an employee with the same length of service who approached the employer on his or her own initiative, e.g., in response to a newspaper ad. Given the aging baby-boomer population, age is a factor that may have a significant influence on any determination as to what is "reasonable" notice of termination.

Q: Is there a difference between "termination pay" and "severance pay"

A: Yes. "Termination pay" is the term used under the Employment Standards Act, 2000, to refer to what is essentially "pay in lieu of notice". The requirement under the legislation is to provide working notice but, where the employer fails to comply with that requirement, it may be permissible to provide "termination pay" in an amount that is equal to the wages or salary that the employee would have otherwise earned had he or she actually been given the opportunity to work through the notice period. "Severance pay", on the other hand, is a different and distinct entitlement under the Employment Standards Act, 2000. Severance pay may be payable in addition to the requirement to provide notice (or termination pay). In the case of individual terminations, the requirement to provide severance pay only applies where (a) the employee has five (5) or more years of service; and (b) the employer has an annual Ontario payroll of $2.5 million or more. There may also be a requirement to provide severance pay in larger-scale terminations, regardless of payroll size. Although severance pay is often thought of as one week per year of service, there is a requirement to take partial years worked into account, i.e., by adding up the number of completed months of service and dividing by 12. For example, an employee with 12.5 years of service is entitled to a severance payment equal to 12.5 weeks of pay. There is a ceiling placed on the amount of severance pay required; there is no obligation to provide a severance payment in excess of 26 weeks pay.

Q: Is an employer always required to provide notice of termination?

A: No. Whether under the Employment Standards Act, 2000 or under the common law, there are a number of situations that give rise to an exception to the requirement to provide notice. Under the Employment Standards Act, 2000, there are a variety of possible exceptions to the requirement to give notice, including those situations where the employee is guilty of "wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer". Under the common law, different standards apply. For example, there is no requirement to provide reasonable notice where the employer has "just cause" for immediate dismissal. In this context, "just cause" often refers to some manner of provable misconduct that is clearly at odds with the person's fundamental obligations as an employee. For example, untrustworthy behaviour on the part of someone employed in a position of trust. In certain instances, a single incident may give rise to "just cause" for dismissal. However, more usually (and especially in the case of performance difficulties), the point of "just cause" may only be reached after the employer has made some attempt at taking corrective action. In this latter instance, "just cause" is often a matter of having sufficient documentation to prove that an employee's performance difficulties have persisted despite a reasonable - and documented - attempt at corrective action.

Q: Isn't "just cause" the same thing as "wilful misconduct"?

A: Not necessarily. Due to the use of the term "wilful", the statutory standard of "wilful misconduct" has been interpreted as being a higher standard than the "just cause" standard employed under the common law.

Q: Do the same considerations apply when terminating unionized employees?

A: No. "Just cause" may have a distinct meaning for unionized employees covered by a collective agreement, if only because the meaning given to "just cause" in that context is not the meaning ascribed by the courts but instead by grievance arbitrators who are empowered to adjudicate disputes, including dismissals, arising under a collective agreement. Because this is a different body of "case law" than that which applies to non-union employees, the meaning given to the term "just cause" for dismissal under a collective agreement may be different than the meaning given the term under the common law. While it may be true that unionized employees are entitled to the benefits of the Employment Standards Act, 2000, including the entitlement to notice of termination as set out in that legislation, it can also be the case that a particular collective agreement provides a better, or different, right or entitlement. Also, under most collective agreements, employers have less latitude when it comes to terminating employees - for example, most unionized employers are prevented, under the terms of the collective agreement, from terminating without cause, i.e., by merely providing notice of termination. While unionized employers may be able to "lay off" an employee due to lack of work (for example), most are prohibited from simply terminating without cause.

Q: Can we be ordered to reinstate a terminated employee?

A: Yes, whether a unionized employer or not, it is possible for a terminated employee to be reinstated, for example, by order of a tribunal or board of adjudication. It is more commonplace to face reinstatement under a collective agreement, i.e., in unionized workplaces, but even for a non-union employee, reinstatement may be possible under certain statutes and depending on the circumstances. For example, an employee who is terminated after legitimately exercising his or her right to refuse unsafe work may, under the authority of the Occupational Health and Safety Act, be reinstated by order of the Ontario Labour Relations Board in the event of a successful complaint.