Managing Difficult Terminations

1. Terminating for Cause
2. Terminating the employee on a protected
leave of absence
3. Terminating the “Expensive” Employee
Managing Difficult
Terminations
PRESENTER: LIOR SAMFIRU

Some General Rules
a) If it’s not in writing, it does not exist
b) If giving notice: must be clear, unequivocal and have a definite
end date
c) Never allow employee to accept severance offer on the spot
d) Know what your contracts and employment policies say about
termination entitlements
e) Remind employee of post-employment obligations
f) Just the facts ma’am…
Managing Difficult
Terminations

Termination for Cause
The Problem:
Can be very emotional for employee accused of wrongdoing.
Employee not paid severance so more likely to pursue legal
action.

• Employer can terminate employment for cause, where
employee’s conduct is inconsistent with the continuation of
the employment relationship.
• Can only happen when the employee is guilty of repeated
and very serious misconduct.
• Employer has an obligation to take other lesser forms of
discipline before resorting to termination.
• One incident of misconduct is almost never enough.
• If employer establishes cause, no requirement to pay
severance.
In reality, very difficult to establish cause, and employer may be
liable for damages for bad faith

How does an employer “build up” its case?
• Extremely important to document any incident of misconduct
• Use the “confirming email” method
• Use the “internal memorandum” method
• Best way is to have employee acknowledge conduct, in writing

Employer should discipline employees
• Remember, employer can and should impose disciplinary
measures, short of termination: warnings, suspensions, etc.
• Disciplinary measures should escalate in severity
• Should always have a written record of any disciplinary action
taken
• Employee should be warned, in writing, of termination risk
• Employer may have to conduct workplace investigations to
resolve conflict
• Must never tolerate abusive, discriminatory or violent behaviour
(Bill 168 imposes significant liability)
• Meet with the employee to give opportunity to respond (confirm
this in writing later)

So you decided to terminate…
• Are you sure….? How about a termination without cause?
• Stick to the facts only, rather than personal attacks
• Consider having a witness at the termination meeting
• Use the word “cause” in the letter of termination
• Provide history of conduct and disciplinary measures in
termination letter
• Employee to be immediately escorted out and all computer
access revoked

Remember:
• Always follow your own policies regarding discipline and
termination
• Unless conduct is “wilful misconduct”, must still pay statutory
entitlements
• For statutory severance purpose, all service counts (not just last
stretch of service)

The Law:
An employer must take back employee at the conclusion of leave of
absence and also must provide modified duties and accommodation
to the point of undue hardship.
The Problem:
Potential violation or Employment Standards Act, Human rights Code
and/or Workplace Safety and Insurance Act.
Terminating Employees on
Protected Leave of Absence

• Don’t be too proactive – can only assess ability to return
employee to work at the END of the leave. Rather than terminate,
consider notifying of potential loss of job at the conclusion of
leave.
• Confirm that employee has intention to return to work or the
ability to return to work
• “Internal memorandum”: ensure the reason for termination is
documented, BEFORE employee is terminated.

• If must replace employee on leave – don’t terminate (but
consider duty to accommodate)
• Notify employee of replacement and of intention to return
employee to work
• Remember: employer is allowed do to what is required to operate
its business, and does not have to let an employee go to make
room for employee returning from leave
• Termination decision must be based on a legitimate business
reason, unrelated to the leave of absence and must be
unavoidable.

Remember:
• Cannot effectively give working notice
• Employee may be entitled to enhanced severance package if
unable to look for work
• Must be prepared to have your decision making process
scrutinized
• Should consider timing of severance payout, so as not to effect
other benefits received by employee.

Strategies to Consider:
• Return employee to work so as to “distance” yourself from leave
of absence
• Consider offering “enhanced” severance package as incentive for
acceptance
• Ensure that letter of termination fully describes reasons for
termination (you are writing it for employee’s lawyer)
• May not need to terminate: employee may stay on leave
(particularly if receiving disability benefits)

Frustration of Contract
In some situations employment contract
becomes frustrated due to a lengthy absence,
allowing employer to treat relationship as
being at an end.
• Would have to be very lengthy absence (usually measured in
years)
• Not likely to return to work in the future
• If employer has disability plan, lengthy absence within the
contemplation of the parties

Is severance reduced by amount of disability benefits received by
employee?
• If employer exclusively pays for disability coverage, employer may
reduce severance by the amount paid by insurer
• If employee paid even a portion of the insurance premiums, the
employer may not consider the amount of disability benefits paid
to employee

Expensive Terminations
The Problem:
Employees often see severance as a windfall.
This can be very costly.

When is a termination particularly expensive?
• When employee has lengthy service
• Older employees
• Senior management
• High salaried employees
• Where employee recruited away from long term job
• Where no termination clause at play

Expensive Terminations
• Termination entitlements are based on an employee’s age, length
of employment and type of position.
• If no notice given, must put employee in the same financial
position as if given working notice
• Severance package must include everything: salary, bonus,
commissions, benefits, stock options, vacation pay, etc.

How do you reduce cost?
Give working notice
• Employee may consider this to be less desirable, and may be
willing to accept lesser severance
• Consider whether you wish to have employee continue working
• Notice must be clear, unambiguous and have definite end date
• Must still pay statutory severance pay at conclusion of notice
period

The working notice “threat”
• This may be used as a negotiating tactic
• Employee may be offered possibility of working notice or
severance payout
• Employer can change its mind and choose to only pay severance

Enter into new contract of employment with termination clause
• Should be done before termination specifically contemplated
• Allows employer to significantly reduce future termination costs
• Must offer employee something in return for signature
• Cannot compel employee to sign new contract

The 2 option severance offer:
• Salary continuance with regular job search reporting obligations;
or
• Reduced lump sum
The “pay if unemployed” option
• Guaranteed severance until a certain date, plus an additional
payment if still unemployed on that date.

Managing Difficult Terminations

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