The document discusses common myths and realities regarding dismissal law in Canada. It begins by debunking several common misconceptions about notice requirements and severance pay. It then explains the two sources of entitlement for employees dismissed without cause - statutory minimums and common law. Under common law, employers must provide reasonable notice, with the length determined by factors like length of service, age, and availability of similar work. The document also discusses dismissals for just cause versus without cause, as well as options for providing notice and references best practices for termination clauses, policies, agreements and investigations.

1. Optimum Talent
November 29, 2013
Toronto
Presented by
Stuart E. Rudner
The Law of Dismissal

2. Common Myths
 Every employee has a probation period during
which they can be dismissed without notice or
cause.
 Unless a contract states otherwise, employees are
only entitled to the Employment Standards Act
minimum amounts of notice / severance
 You have to give a dismissed worker a “package”
 The common law requires one month of notice for
every year of service (or two weeks for every
year, or some other absolute amount).
2

3. How Much Notice / Severance?
 Pay in lieu of notice of dismissal includes base
salary only
 Termination clauses are not enforceable
 Only the most recent period of employment
counts when calculating entitlement to severance
pay
 You can’t fire someone in Canada
 Providing positive or negative references to
dismissed employees can result in liability
3

4. 4
Dismissals
 2 types: With cause or without
cause
 If with cause, no further
obligation to employee
 Otherwise, need to assess
employee’s entitlements to
notice/pay in lieu/severance
 No “near cause”

5. 5
Without Just Cause
 Notice of Dismissal or Pay in Lieu
 Two sources of entitlement
– Employment Standards Act /
Canada Labour Code
– Common Law
 Can contract out of common law

6. 6
Common Law: The Length of
Notice
 Requirement: “reasonable” notice
of dismissal
 The Bardal Factors
1) Length of service
2) Age
3) Position / Character of Employment
4) Availability of Similar Employment

7. What is “reasonable”?
 No “rule of thumb” or direct 1:1
relationship between years of service and
months of reasonable notice
 Beware the short-term employee
 Inducement
7

8. 8
Statutory Notice Requirements
*plus severance
Length of Employment Notice Required
Less than 3 months None
3 months but less than 1 year 1 week
1 year but less than 3 years 2 weeks
3 year but less than 4 years 3 weeks
4 year but less than 5 years 4 weeks
5 year but less than 6 years 5 weeks
6 year but less than 7 years 6 weeks
7 year but less than 8 years 7 weeks
8 years or more 8 weeks

9. 9
Reasonable Notice Periods
0
0.5
1
1.5
2
2.5
3
.6 to 2.5 2.6 to 5 6 to 10 11 to 15 16 to 20 21 and
25
26 and
30
31 and
35
36 and
40
Years of Service
Months/Year
of Service

10. 10
0-2 Years of Service
Position Average Range
Clerical 2.82 .2-12
Supervisory 3.67 .2-9
Sales 3.54 .01-15
Lower Mngmnt 3.42 1-10
Upper Mngmnt 6.76 3-12.75

11. 11
17-19 Years of Service
Position Average Range
Clerical 10.58 6-15
Supervisory 12.63 9-16
Sales 13.67 8-18
Lower Mngmt 13.38 7-24
Upper Mngmnt 18.14 12-24

12. The Changing Times
 End of mandatory retirement, people
working longer --> Wrongful dismissal
claims by workers in 70s and 80s!
 Recent decision:
I do not think there is a place in this social reality
for an automatic presumption that persons should
or would naturally retire on reaching senior age.
12

13. The Changing Times
Di Tomaso v. Crown Metal Packaging Canada
LP:
there is recent jurisprudence suggesting
that, if anything, (position/character of
employment) is today a factor of declining
relative importance.
13

14. 14
Without Cause: Options
 Working notice
– must allow opportunity to
look for new employment
 Salary & benefit continuance
– Clawback
 Lump-sum
 Combination

15. Disability Coverage
 Disconnect between law and insurers
 Huge potential liability of dismissed
employee becomes disabled during notice
period
 Options:
– Address in employment contract
– Obtain Release
– Arrange alternative coverage
15

16. 16
Dismissals for Just Cause
 Capital Punishment of Employment Law
 Employer must prove:
1. that the alleged misconduct took place,
and
2. that the nature or degree of misconduct warranted
dismissal, bearing in mind all relevant
circumstances
 Proportionality is guiding principle – “punishment
must fit the crime”

17. The Contextual Approach
 Employer must consider all circumstances,
not just alleged misconduct
– Length of service
– Disciplinary history
– Nature of position
 No absolute rules
 Same set of facts can yield different
results
17

18. 18
Performance Issues
Employer must:
 Set a clear, reasonable standard
 Communicate expectations
 Measure the performance
 Take appropriate action
– Warnings (verbal and written) – document everything!
– Counseling
– Training
 Allow reasonable time for improvement

19. Off-Duty Conduct
 Generally, what you do on your time is your business
 Unless
– The conduct renders the employee unable to perform his
duties satisfactorily.
– The conduct interferes with the efficient management of
the operation or workforce.
– The conduct leads to a refusal or reluctance of other
employees to work with him.
– The conduct harms the general reputation of the Employer,
its product or its employees.


20. 20
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

21. Vernon v. British Columbia
 30 year employee accused of
bullying/harassment
 Known as “The Little General”
 Offensive language, racial and other
inappropriate comments

22. 22
Human Rights Claims
 Cannot dismiss based upon protected
ground
 Caution when applying performance
requirements
 Even if tiny part of reason was protected
ground despite other legitimate reasons
 Potential for “general damages” plus
damages for loss of income from date of
dismissal to date of hearing

23. Constructive Dismissal
 Unilateral and substantial change to a
fundamental term of the employment
contract
 Not only money – position, duties,
location, prestige, reporting, etc
 Explicit or implied right
 You can’t just change the contract
23

24. Employment Agreements
 Use them!
 Do it properly
– Before there’s already an agreement
– With consideration
– Explained and understood
– Independent legal advice

25. Employment Agreements
 Basic Checklist:
– Duties (maintain flexibility)
– Remuneration and benefits (maintain
flexibility)
– Restrictive Covenants
– Vacation
– Termination
– No conflicting obligations

26. Employment Agreements
 Basic Checklist (cont’d):
– Hours of work
– Vacation / holidays
– Dress code
– Conflict of interest
– Expenses
– Social Media

27. Termination Clauses
 Avoid uncertainty of “reasonable
notice” & reduce dismissal costs
 Use clear language
 Don’t go below employment
standards
 Address benefits
 Address mitigation
27

28. Implementing Policies
A. Have a policy
B. Use clear and unambiguous language
C. Keep the policy up to date
D. Publicize the policy
E. Make employees aware of concerns
F. Ensure supervisors and managers are aware
of the policy and how to monitor
G. Monitor behaviour
H. Discipline violators

29. 29
Stuart E. Rudner
srudner@rudnermacdonald.com
647.255.3100
www.rudnermacdonald.com
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