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"You're Fired!" The Law of Discipline and Dismissal

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"You're Fired!" The Law of Discipline and Dismissal

  1. 1. Turf and Rec February 25, 2020 “You’re Fired!” Stuart Rudner stuart@rudnerlaw.ca 416.864.8501 Presented by: The Law of Discipline & Dismissal 1
  2. 2. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Disclaimer The user is authorized to use this presentation for the user’s own needs only, and is not authorized to make copies thereof for sale or for use by others. This presentation is not provided for the purpose of providing legal advice. Every situation is unique and involves specific legal issues. If you would like legal advice with respect to the topics discussed in this presentation, or any Employment Law matter, we would be pleased to assist you. 2
  3. 3. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Two Types of Termination 1. With Cause: No further obligations to the employee 1. Without Cause: Notice or pay in lieu of notice There is NO middle ground - no “near cause” 3
  4. 4. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Just Cause for Dismissal “The capital punishment of employment law” Employer must prove: 1. The alleged misconduct took place, and 2.The nature or degree of misconduct warranted dismissal, bearing in mind all relevant circumstances 4
  5. 5. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Just Cause for Dismissal Contextual Approach: Employer must consider all circumstances, including: ● Length of service ● Disciplinary history ● Nature of position ● Mitigating factors ● Response to allegation Has employment relationship been damaged beyond repair? 5
  6. 6. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Progressive Discipline “Some lesser form of discipline was appropriate…” ● Warnings (verbal and written) ● Suspension (paid and unpaid) - risky ● Demotion (almost never an option) ● Keys: ○ Set out expectations ○ Warn of consequences ○ Allow reasonable time for improvement 6
  7. 7. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 The Importance of The Investigation ● Investigate first ● Ensure fairness, objectivity, thoroughness ● Give opportunity to respond ● Often, employee response is critical factor in determining appropriate discipline 7
  8. 8. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 ● Best practice: clear warnings, progressive discipline, culminating incident ● Single incident can be cause“culminating incident” DOCUMENT EVERYTHING Progressive Discipline Cont’d 8
  9. 9. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Without Just Cause Must provide Notice of Dismissal or Pay in Lieu Three potential sources of entitlement: 1. Employment Standards legislation 2.Common Law 3.Contract *Can contract out of common law using an enforceable termination provision 9
  10. 10. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 ESA - Notice or Termination Pay 10 Period of Employment Notice Required Less than 3 months 0 3 months but less than 1 year 1 week 1 year but less than 3 years 2 weeks 3 years but less than 4 years 3 weeks 4 years but less than 5 years 4 weeks 5 years but less than 6 years 5 weeks 6 years but less than 7 years 6 weeks 7 years but less than 8 years 7 weeks 8 years or more 8 weeks ● all compensation/benefits to continue
  11. 11. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 ● Paid in addition to notice or Termination Pay ● If ○ employed for 5 or more years AND ○ Payroll is $2.5M or more ● 1 week per year of employment (prorated) ● Maximum 26 weeks ESA - Severance Pay 11
  12. 12. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Common Law Notice ● By default, all employees are entitled to “reasonable notice” ● NOT one month per year ● Based on 4 primary factors: ● employee’s age ● length of service ● nature of work / character of position ● availability of similar employment ● Other considerations, such as inducement ● Cap of 24 months in absence of extenuating circumstances ● By default, all compensation/benefits to continue 12
  13. 13. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 The Duty to Mitigate ● Reasonable notice is bridge to next job, not guarantee ● Duty to make reasonable efforts to search for new employment ● If fail: reduced damages ● If succeed: reduced damages ● This is reason for “clawback” 13
  14. 14. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Notice, Severance, or Both? Options available to employers: ● Working notice ● Salary & benefit continuance ○ with clawback ○ without clawback ● Lump sum payment ● Combination of the above 14
  15. 15. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Working Notice ● Instead of money, keeping an employee on board for that time ● Usually not advisable, but sometimes it works ● All terms and conditions must remain unchanged ● Except: Give them a chance to look for work! 15
  16. 16. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Termination Tips & Tricks ● Unsure about cause? Consider hybrid approach ● Termination meeting ○ Have a witness ○ Respect and good faith ○ Short and sweet ○ Do NOT let them sign anything right away! ● Secure confidential information 16
  17. 17. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Contractual Termination Clauses ● Common law “reasonable notice” is default ● Can be displaced by contract BUT ● Termination clauses often challenged ● Must be drafted very carefully ● Case law changes frequently - review REGULARLY with a lawyer ● It doesn’t always say what you think it does 17
  18. 18. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Termination Clauses ● Enforceable if done properly ● Avoid uncertainty of “reasonable notice” & reduce dismissal costs ● Use clear language ● Don’t go below employment standards ● Use saving clause ● Avoid “sole entitlement” type wording ● Consider mitigation, release 18
  19. 19. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 The value of a termination clause Example: A 65 year old Supervisor has worked with the same employer for over 30 years with slim chances of re-employment Written Contract: As little as 8 weeks’ pay No Written Contract: Potentially 24+ months’ pay 19
  20. 20. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Entering Into the Employment Contract ● Not worth the paper it’s printed on if not enforceable ● Courts will assess contract & termination clause in particular ● Latest trend is more pragmatic - enforce intention of parties even if wording is not perfect ● Timing and consideration are key issues 20
  21. 21. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Consider This ● For contract to be valid, there needs to be valid consideration SOMETHING GIVEN FOR SOMETHING GAINED ● For new job, consideration is work in exchange for job offer ● BUT - offer has to be signed BEFORE employee has been hired ● If contract signed after work starts - may not be valid at all 21
  22. 22. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 For Existing Employees For existing employees, when looking to change employment terms: 1)Provide new consideration, such as promotion, bonus, or something of value OR 1)Provide notice of change - if they don’t accept new agreement - may be the end 22
  23. 23. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 Questions 23
  24. 24. www.rudnerlaw.ca 416.864.8500 | 905.209.6999 THANK YOU! Feel free to contact us if we can be of assistance. We’d be glad to speak with you. 416.864.8500 905.209.6999 www.rudnerlaw.ca info@rudnerlaw.ca 100 Allstate Parkway Suite 600 Markham, ON L3R 6H3 ➢Follow our blog at rudnerlaw.ca/blog ➢Check us out on LinkedIn, FaceBook, and Instagram ➢Tune in to Fire Away, our monthly online show ➢View our videos on our YouTube channel ➢Listen to our podcasts ➢To receive regular Employment Law updates and keep on top of what we are up to, sign up for our newsletter at rudnerlaw.ca/newsletters 24

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