When a non-unionized employment relationship ends due to termination, a fired employee will be entitled to either advance notice of termination, or pay in lieu of such notice, if his or her employment is terminated by the employer “without cause.” Without cause means that you were not terminated for cause, or for a “reason that deserved firing”. Without cause terminations can be due to financial issues, restructuring, business slowdown, ect. If your employer terminates your employment relationship on a not-for cause basis, it will owe you statutory, contractual or common law reasonable notice of the termination or pay in lieu of such notice. In some cases, employees have been awarded wrongful dismissal damages worth over two years of pay. As a general principle, severance pay will only be provided if no cause for termination exists. If cause does exist, then most contracts will generally provide that no notice, or pay in lieu of notice, will be provided.
An indefinite contract of employment may be terminated by your employer for any reason, but only upon provision of reasonable notice. The employer has the option either to require the employee to continue working for that period or to provide the employee with pay in lieu of notice by way of salary continuance or lump sum payment.
If you’ve been terminated do not sign anything until you have it reviewed. It is highly stressful to get fired – but try your best to not let emotions stand impair your judgment. Call our Hamilton Employment Lawyers today at 905-333-8888 and we will be happy to provide guidance on whether or not you are receiving what you are entitled or whether you have a case against your former employer.
The principal purpose of notice is to provide you with the opportunity to secure alternate equitable employment. For notice of termination to be effective it “must be clear and unambiguous” meaning that your employer must have have provided you with a final termination date. The termination must be reasonable – and if it is not, you may be entitled to damages for wrongful dismissal. If you have questions regarding whether or not your termination was reasonable contact our Hamilton Employment Lawyers who can provide you with the proper guidance and information.
There are three main types of termination entitlements that an employer may be required to give the employee at the time of a without cause termination.
Firstly, there is statutory termination notice or pay in lieu of such notice (this may be individual or group termination notice, or both) requirements. Ontario has minimum standards legislation providing that once an employee has accumulated a minimum amount of employment service, the employer is required to provide a specific minimum amount of advance notice of the termination of the employment relationship. There is no contracting out of the statutory minimums.
There may be statutory severance pay requirements, (only for certain Ontario or federally regulated employees), which must be given as pay and cannot be given as notice. Severance pay is also legislated and only payable under certain conditions.
There may be common law reasonable notice or pay in lieu of such notice. In every non-unionized employment relationship, the employer has an implied common law obligation to give the employee reasonable notice of its intention to terminate the employment relationship, unless there is just cause for termination. If the employer fails to give the employee reasonable notice of termination, the employee can bring a wrongful dismissal action for breach of that implied term. the calculation of common law reasonable notice can include, but is not limited to calculation of your:
Life Insurance, Medical and Disability Benefits;
Shares and Share Options;
Collateral Benefits; and
If you have been terminated without cause and where your employer has engaged in improper conduct, your may also be entitled to extraordinary damages in addition to wrongful dismissal damages. Extraordinary damages are damages based on the actions or inactions by an employer during or after the end of the employment relationship. In the wrongful dismissal context, extraordinary damages are awarded in addition to notice damages but only in exceptional circumstances.
The common law reasonable notice period may be difficult for counsel to determine in a particular scenario. The assessment of reasonable notice is considered an art, rather than a science. It is a very fact specific exercise. The starting point for determining the reasonable notice period is set out in the seminal case of Bardal v. Globe & Mail Ltd., 1960 CarswellOnt 144 (Ont. H.C.) (Bardal).
Reasonable notice is decided with reference to the following key factors (the “Bardal factors“):
The employer’s obligation to provide the employee with reasonable notice of termination does not apply where:
Extraordinary damages are often claimed by plaintiffs in employment-related litigation. Extraordinary damages are damages based on the actions or inactions by your employer prior, during or after the end of the employment relationship. In the wrongful dismissal context, extraordinary damages are awarded in addition to notice damages.
Moral damages – moral damages are aggravated damages that compensate an employee for mental distress or other intangible injury arising from the employer’s breach of its duty of good faith and fair dealing in the manner of dismissal. To obtain an order for moral damages, you must prove that your employer breached its duty of good faith and fair dealing in its conduct during the course of your dismissal – and – the employer’s breach caused the employee mental distress or other intangible effect. Unfairness in the manner of dismissal is not sufficient in itself to ground an award for aggravated damages. An award of moral damages resulting from the manner of dismissal requires both:
There must be a causal link between the employer’s breach of its duty of good faith and fair dealing, and the employee’s mental distress
Bad Faith Damages – If your employer engaged in conduct that is unfair or in bad faith in the course of your dismissal, moral damages may be justified. The obligation of good faith and fair dealing is incapable of precise definition. At minimum it requires employers, in the course of dismissal, to be candid, reasonable, honest and forthright with their employees and to refrain from engaging in conduct that is unfair or is in bad faith by being untruthful, misleading or unduly insensitive
Human Rights – damages are also available (through human rights tribunals and the courts in Ontario) if the employer discriminates against the employee in the course of terminating the employment relationship, the employe may be entitled to human rights damages.
Punitive Damages – To obtain an order for punitive damages, you must prove that the employer’s conduct is reprehensible, meaning “malicious, oppressive and high-handed” and a “marked departure from the ordinary standards of decent behaviour”. If punitive damages are claimed for breach of contract (i.e. a wrongful dismissal claim), you, as the plaintiff, must also prove that the demployer committed an actionable wrong independent of the underlying breach of contract claim. You must also prove that punitive damages award, when added to the compensatory award is required to punish the defendant and meet the objectives of retribution, deterrence and denunciation
Absent a contractual provision dictating the method of providing notice, your employer can fulfil its termination obligations by providing:
Working notice (except for statutory severance pay, which must be provided as pay and cannot be provided as notice). Working notice is not appropriate where the employee is unable to work;
Lump-sum payment in lieu of notice;
Salary continuance in lieu of notice, with or without a “clawback” in the event of mitigation. A clawback should be considered if the employer suspects the employee will quickly mitigate his damages through re-employment and is only available for amounts over minimum standards or contractual entitlements; or a combination of the above.
Many employees have questions surrounding not only the amount of termination / severance pay they are offered at separation – but also how it is paid. If you have any question on how your separation pay is structured, contact out employment lawyers to discuss your particular situation.
If you or someone you know has been terminated without cause, speaking with a Hamilton Employment Lawyer about your situation would help you to better understand your options. Our employment lawyers provide free phone consultations and we would be happy to speak to you about your situation. Call us at 905-333-8888 or fill in a contact form today and we will get back to you within 24 hours.
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