Many HR professionals say the toughest part of their job is employee terminations. No surprise there, and it’s usually no day at the beach for the exiting employee either. Mapping out the termination process and employee entitlements in advance will reduce the sting of terminations for both sides.
It Pays to be Nitpicky!
Another reason to have all ducks in a row: courts have awarded additional damages for aspects of the manner of dismissal that may seem a little nitpicky. A few examples: an employer’s failure to provide a written termination letter, late statutory payments, miscalculations in statutory amounts, and inaccurate ROEs. Courts have also called employers out for failing to explain an employee’s rights in a termination letter. All the more reason for employers to tighten up their termination process and termination letter template.
Nailing down the structure and amount of a severance package that will lead to the swiftest resolution first requires a strategic review of the employee’s specific situation. SpringLaw uses a detailed e-questionnaire to make severance package recommendations and, where applicable, spot issues requiring deeper legal review (such as potential claims of discrimination or reprisal). This makes for a smooth path between the termination decision and termination meeting.
Termination Best Practices
Here are some termination best practices to soften the landing for both sides:
- A thorough and plain English termination letter – with headings, payment amounts, dates and important deadlines in bold – can serve as a checklist of the many loose ends for HR, payroll and the employee
- Issue an accurate ROE within 5 calendar days of the date of an interruption in earnings, so that the employee can apply for employment insurance
- Be accurate and timely with statutory payments: deliver Ontario Employment Standards Act entitlements no later than 7 days after the employment ended, or the next payday
- Continue all wages and benefits throughout the statutory notice period
- Include (bolded) deadlines for cessation of insurance coverage and conversion options; this is especially important if a departing employee has health issues and would benefit from conversion of coverage without the requirement of an updated medical assessment
- For matters that don’t resolve immediately, before cutting off benefits coverage on the date stated in the termination letter, review the status of outstanding employee matters; sometimes benefits continuation for a longer period is not cost-prohibitive, and advisable to reduce potential employer liability
- Consider providing a reference letter and outplacement counselling where appropriate; strengthening re-employment prospects benefits employers as well if the severance package provides for employer ‘credit’ when an employee mitigates
You Don’t Want to Have a Waksdale Problem!
If an employer is lucky enough to have an airtight employment contract setting out the employee’s termination entitlements, most without-cause terminations will be seamless. Unfortunately, these days many employment contract termination (and other) provisions have a Waksdale problem and are invalid or at least open to challenge in the wake of Waksdale v Swegon North America 2020 ONCA 391.
For those not-so-seamless exits, tightening up the termination process and letter will reduce the need for post-termination clarifications, and reduce legal fees, the risk of wrongful dismissal litigation and additional damages for botching the manner of dismissal.
Check out SpringLaw’s Boss Law Bootcamp, which contains guides, checklists and templates to help with that softer landing for all.