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| What are an employee's entilements when the proverbial axe falls? |
As an employment lawyer I am often called upon to determine the appropriate amount of reasonable notice of termination of employment without cause* in a non-unionized workplace.
In other words, whether my client is an employee or employer, he or she wants to know how long one has to pay an employee who is fired.
Firstly, let's be clear about what reasonable notice is not:
With one important exception, discussed below, when dealing with workplaces under provincial, rather than federal, jurisdiction**, reasonable notice is not merely the provincial statutory minimum notice of termination (such as can be found in section 57 ofOntario
As well, contrary to popular belief, there is no rule that reasonable notice is always equal to one month per year worked.
Secondly, there is no one answer to the question "what is reasonable notice?". Each case turns on its own facts. According to Canadian common law, a Court will look at a number of factors in order to determine reasonable notice for a particular employee. Traditionally, the most important factors are length of service, age, the type of position, the level of salary, and the availability of alternate employment.
It is important to note, as well, that an employer can opt to provide working notice or pay in lieu of notice (and discharge the employee immediately) or a combination of the two. In all of these cases, the common law reasonable notice period during which an employee is to be paid his compensation is the same.
Furthermore, under the common law, a dismissed employee has a duty to mitigate. In other words, the employee must take reasonable steps to "cut her losses" by actively seeking suitable alternate employment during the common law reasonable notice period. Should a dismissed employee fail to mitigate, for example, by not looking for work, or should the employee find alternate employment during the reasonable notice period, the Court will reduce the amount otherwise due to the employee by the employer for failure to provide reasonable notice.
I mentioned above how there is an exception to provincial statutory minimums not being the final word when it comes to notice of termination. It is possible for the employee to "contract out" of his right to common law reasonable notice. This is easier said than done, however. Nevertheless, both employers and employees need to be aware of this possibility. Bear in mind though that one cannot legally contract out of the statutory minimum notice period.
If this is enough to make your head spin, then don't worry; you are not alone. The complexity of this area of the law proves why it is vital for employers to obtain proper legal advice prior to making critical decisions such as hiring and firing employees, and for employees to do the same before signing an employment contract, accepting a severance package or simply walking away without a severance package after being fired.
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*If an employee is dismissed with cause (also known as just cause), then she is not entitled to notice or pay in lieu of notice of termination (at common law or otherwise). Just cause will be the subject of another post. Needless to say, an employer would be wise to seek legal advice before purporting to terminate an employee for just cause because there can be serious consequences for both the employer and employee.
**Employees in a workplace under federal jurisdiction (such as banks, for example) are not subject to provincial employment statutes such asOntario
***In addition to minimum notice of termination, s. 64 of the Employment Standards Act (Ontario
In other words, whether my client is an employee or employer, he or she wants to know how long one has to pay an employee who is fired.
Firstly, let's be clear about what reasonable notice is not:
With one important exception, discussed below, when dealing with workplaces under provincial, rather than federal, jurisdiction**, reasonable notice is not merely the provincial statutory minimum notice of termination (such as can be found in section 57 of
As well, contrary to popular belief, there is no rule that reasonable notice is always equal to one month per year worked.
Secondly, there is no one answer to the question "what is reasonable notice?". Each case turns on its own facts. According to Canadian common law, a Court will look at a number of factors in order to determine reasonable notice for a particular employee. Traditionally, the most important factors are length of service, age, the type of position, the level of salary, and the availability of alternate employment.
It is important to note, as well, that an employer can opt to provide working notice or pay in lieu of notice (and discharge the employee immediately) or a combination of the two. In all of these cases, the common law reasonable notice period during which an employee is to be paid his compensation is the same.
Furthermore, under the common law, a dismissed employee has a duty to mitigate. In other words, the employee must take reasonable steps to "cut her losses" by actively seeking suitable alternate employment during the common law reasonable notice period. Should a dismissed employee fail to mitigate, for example, by not looking for work, or should the employee find alternate employment during the reasonable notice period, the Court will reduce the amount otherwise due to the employee by the employer for failure to provide reasonable notice.
I mentioned above how there is an exception to provincial statutory minimums not being the final word when it comes to notice of termination. It is possible for the employee to "contract out" of his right to common law reasonable notice. This is easier said than done, however. Nevertheless, both employers and employees need to be aware of this possibility. Bear in mind though that one cannot legally contract out of the statutory minimum notice period.
If this is enough to make your head spin, then don't worry; you are not alone. The complexity of this area of the law proves why it is vital for employers to obtain proper legal advice prior to making critical decisions such as hiring and firing employees, and for employees to do the same before signing an employment contract, accepting a severance package or simply walking away without a severance package after being fired.
--------------------------------------------------------------------------------------------------------------------------
*If an employee is dismissed with cause (also known as just cause), then she is not entitled to notice or pay in lieu of notice of termination (at common law or otherwise). Just cause will be the subject of another post. Needless to say, an employer would be wise to seek legal advice before purporting to terminate an employee for just cause because there can be serious consequences for both the employer and employee.
**Employees in a workplace under federal jurisdiction (such as banks, for example) are not subject to provincial employment statutes such as
***In addition to minimum notice of termination, s. 64 of the Employment Standards Act (
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