Things to Consider if You Are Terminated
By Sania Chaudhry
This blog post only applies to non-unionized workers and those who work under provincial regulation. If you are in a union or work under federal regulations, then different rules apply to you. As the below is not specific to your case, this does not constitute legal advice. Please contact us to discuss and obtain legal advice if you have been terminated and are wondering about your rights.
Just Cause vs Without Cause
Have you been let go, or terminated, from your job? It is essential to know your rights upon termination. There are two types of termination: with just cause and without cause. An employer can terminate you without cause at any time, for no reason at all, as long as you are paid sufficient severance in exchange for this without cause dismissal. Where an employer has just cause for your dismissal, you are not entitled to severance. You also do not get EI if your termination is for just cause, while you are eligible for EI if you are terminated without cause. A lawyer can review your termination letter to see if you were terminated with cause or without cause as sometimes it is not immediately clear.
If an employer alleges just cause for your dismissal, you can challenge it to get severance if the actual requirements for a just cause dismissal are not met. The law requires that an employer alleging just cause for termination show that the employee has been spoken to about the behaviour that has led to the termination on multiple times prior to the termination, that they were given an opportunity to correct the behaviour and that they were warned that if they did not correct the behaviour, their employment would be terminated. If an employer alleges they had cause for the dismissal, the burden is on the employer to prove that there was just cause – not on you to prove you were innocent.
A single incident cited by your employer to terminate you would not amount to just cause for termination if it was not a vastly egregious incident that caused the employee-employer relationship to irreparably be broken. A series of incidents cited by your employer to terminate you would not amount to just cause if you did not receive two warnings prior to the termination. You have to have continued the undesirable behaviour despite two warnings to warrant a termination for just cause. A single incident without warnings can only amount to just cause if it was so bad that it destroyed the employer-employee relationship (i.e. fraud, theft, sexual harassment, etc).
If your employer terminates you without cause or their just cause dismissal is actually not valid, you are entitled to reasonable notice and termination pay in lieu of notice (i.e. severance). The minimum statutory amounts for notice are indicated in the Employment Standards Code. But what is often missed is that in addition to this statutory severance, you also have an entitlement to common law notice of termination, or common law severance, unless there is an employment agreement that allows your employer to terminate you only on statutory notice. Even such employment agreements are, at times, not worded correctly and do not actually forego your entitlement to common law severance, making it essential to consult a lawyer to review your employment contract and review the severance offered by your employer to see really what you are entitled to receive.
In terms of the amount of common severance that you would be entitled to, the Bardal v. Globe and Mail, (1960) 24 DLR (2d) 140, case applies. It lists four factors to consider, namely:
- Your Age;
- Length of Service;
- Position in the Company; and
- TheAvailability ofSimilar Employment for You.
Based on these factors, you would be entitled to a certain number of weeks of pay per year of service. Calculating exactly how many weeks you should get is not so much of a scientific formula. Rather, it is an art based on the context of your employment and knowledge of case law which an experienced employment lawyer would have. The four factors are weighed differently in different cases.
Generally, the older you are, the more common law severance you are entitled to. This makes sense when you consider if someone is at an advanced age and is then terminated from their employment – it will be difficult for them to readily find new employment due to being closer to retirement.
The second factor is self-evident – the longer you work at your employer’s business, the more severance you should get because it is calculated based on your years of service. And again, the reasoning for this makes sense as it may be difficult for one to obtain employment with a different company after spending a very long time with the same employer.
Also generally speaking, the more senior level and skilled a person’s position is in the company they work for, the more severance they are entitled to. The courts have determined that this analysis is not limited to just looking at what the job title of the person is. It is a contextual analysis looking at things such as if there was specialized expertise involved in the position and if people worked under this person or reported to them, amongst other case-by-case factors for different jobs. This is the part that requires the most use of a lawyer’s “art” of reviewing case law and having an idea of how your position would be considered.
Lastly, the lack of availability of similar employment for you would increase the amount of severance you would be entitled to. This could be due to your age, any disability you have, and the state of the economy in general (i.e. a recession in your industry or the current COVID-19 pandemic’s impact on businesses). This should also be assessed carefully by a lawyer because in some cases an economic downturn can be argued by the employee to increase their severance, while in other cases an economic downturn can be argued by an employer to decrease the severance they have to pay. It depends on the facts of each case.
Get Your Termination Letter Reviewed by A Lawyer
If you are terminated, you should have a lawyer review the severance package you have received as not only do the Bardal factors require legal interpretation, several other factors could be at play impacting how much severance you would be entitled to such as if your terminating employer had recruited you away from an existing position, your employment contract has non-competition or non-solicitation clauses that would restrict new employment, and you have a disability or special family obligations, among other factors. Make sure you are not underpaid to allow you to be able to start anew after losing a job.
A Word about COVID-19
COVID-19 has led to truly unprecedented times. An employer letting go an employee in these circumstances may try to claim “frustration of contract” stating that the employment contract is impossible to perform given circumstances completely outside of their control. Employers must use caution in trying to use this defense as it is not simply enough to say that there was an economic downturn and as such the contract was frustrated. However, it remains open to see if employers can use this defense in the courts to excuse themselves from paying severance or to be allowed to pay lower severance in the context of COVID-19.
One can also anticipate in this unprecedented time that employers may claim bankruptcy. An employee cannot make a severance claim against a bankrupt employer – rather can only claim vacation pay, unpaid wages, and commission among other compensation going back only 6 months at a maximum cap of $2000. One possible solution for an employee with a bankrupt employer is to launch their claim against the employer or director of the company personally using the Business Corporations Act. Again, we await to see how this will play out in the courts once these matters begin being litigated.