Employment Law Topics
Termination or dismissal is an action taken by the employer to end the employment relationship. Employers have the basic right to terminate the employment of an employee, but along with that right comes responsibilities and obligations. Our goal is to explain your rights and outline your options when faced with a termination.
From an employer's perspective, we understand that most employers find the dismissal of an employee to be a difficult process, regardless of the reasons for the dismissal. However, when a decision to terminate has been made, it is important for the employer to be informed about, and comply with, the law and relevant legislation; treat the employee fairly; handle the termination process in a professional way that preserves the employee's dignity; and be careful about how much information is communicated to others about the facts and reasons for the termination.
There are two ways to terminate an employee: with cause or without cause.
A termination without cause means the employee is being terminated for reasons that are not related to any misconduct. There are several ways in which an employee's rights may be determined:
- A written contract. A written employment
agreement, if you have one, may determine your rights. The law
on express terms (what is actually contained in the agreement)
and implied terms (how a judge will interpret what is NOT
contained in the agreement) will guide the interpretation of
any written agreement.
- The common law. The common law is our body of
case law precedent which has been determined by judges who
have presided over previous employment cases. Case law
precedent provides guidance for how a court will determine the
severance or damages to which an employee is entitled.
- Legislation. In some situations (i.e. public sector employees) an employee's rights are not determined by the common law, but are instead governed by a statute.
In some situations, an employee's rights are determined by a consideration of all three of these sources. For example, an employee may have a written employment agreement that contains a termination clause which provides less than the minimum amount stipulated in the B.C. Employment Standards Act. In that case, the more generous provisions of reasonable notice under the common law would apply to determine that employee's entitlement to severance.
Reasonable Notice (under the common law)
Absent a written agreement, most (non-union) employees in BC are entitled to reasonable notice for the termination of their employment that is "without cause". Reasonable notice is a common law principle. The range of notice awarded by our courts runs from a low of 1 month to a high of 24 months. There are four principle factors which are taken into account.
- The employee's age;
- The years of service;
- The position; and
- The availability of alternate employment
The employer's obligation to provide notice is an obligation
to provide advance working notice to an employee that, at a
certain date in the future, their employment will be at an
end. In many case, instead of advance working notice, an
employer will offer an employee salary continuance or a lump
Please see our Cases section for a number of examples where we obtained damage awards in court for employees who had been terminated without cause.
Termination "with cause" or for "just cause" means the
employer is of the view that, because of misconduct by the
employee, the company is justified in terminating the
employee without notice or payment in lieu of notice.
There are, essentially, two categories of cause:
- The egregious category of misconduct: lying, stealing,
gross insubordination, flagrant breach of serious company
policy etc... and
- The less egregious category of misconduct: substandard performance, bad attitude, minor breach of company policy, minor insubordination etc.
One instance of behaviour in the first category may be
sufficient for an employer to terminate for cause. In the
second category, there must be a pattern of this type of
behaviour. The employer must establish that the employee was
warned on several occasions, that the employer clearly
explained what needed to be done to improve the situation,
that the employer gave the employee a chance to improve, and
specifically warned the employee that if the behaviour did
not improve, termination for cause may result. If the
employer has not jumped through these hoops, then it cannot
rely on the employee's misconduct as a basis to sidestep its
obligation to provide notice.
Even if the employer has taken all the necessary steps, the court will still step back and take a look at the big picture: What is the context within which the misconduct occurred? How many years service did this employee have? What is that employee's track record with the employer? Is the misconduct out of character? Does it reflect a momentary lapse of good judgment?
The determination of just cause is very fact-driven and requires a thorough analysis of all of the facts in a given situation. In all cases of termination with cause, the burden is on the employer to establish the misconduct and prove that the misconduct caused irreparable harm to the employment relationship.
Please see our Cases section for a number of example where we obtained damages awards in court for employees who had been terminated for cause.
A probation period provides the employer with an opportunity to assess the employee's suitability for a position. The employee's suitability has two components: (a) the employee's technical skills; and (b) the employee's "fit" or compatibility within the organization. The employer is obligated to make a good faith assessment of the employee's suitability. For example, if an employee was terminated on her first day on the job, it would be very difficult for the employer to argue that it had assessed the employee's suitability in good faith. If an employer makes an assessment in good faith and determines that the employee is not suitable, then the employer has the right to dismiss a probationary employee without notice or payment in lieu (subject to any statutory obligations).
A constructive dismissal occurs when an employer, without
the consent of the employee, makes a unilateral change to a
fundamental term of the employment relationship. The
employer has effectively terminated the employee. Typically,
a constructive dismissal will arise in the following
situations: (a) a substantial decrease in compensation
and/or benefits; (b) a significant change in job duties and
responsibilities; and (c) a toxic work environment in which
the employee is subjected to harassing behaviour. There can
be other facts which give rise to a constructive dismissal
claim or a combination of factors, the cumulative effect of
which amounts to a constructive dismissal.
In a constructive dismissal case, an employee's claim is the notice to which he would have been entitled if it had been an actual termination without cause. In constructive dismissal cases, the burden is on the employee to establish that a constructive dismissal has occurred.
Even in cases where a judge finds there has been a constructive dismissal, then, unless it would be humiliating to do so, the law requires the employee to remain in (or return to) the workplace in mitigation of her damages. The issue of returning to the workplace in mitigation of damages arose in our case Sarah Chapple v. Umberto Management (see paragraphs 88 to 96). In that case, we acted for the employee, Ms. Chapple. The court found that Ms. Chapple did not have to return to the workplace in mitigation of her damages. Each case will depend on its facts.
Another example is the case Pourdad v. Black Top Cabs Ltd. Here, we acted for the employer, Black Top Cabs. This case is an example where the court found that a case for constructive dismissal had NOT been established in the face of allegations of a toxic and harassing work environment.
Damages is a sum of money awarded by a court at trial to compensate for that person's loss.
Under the common law, an employee has an obligation to
mitigate or minimize her damages arising from the
termination of her employment by making reasonable efforts
to secure comparable employment elsewhere. If the employee
is successful in obtaining alternate employment, then any
amount earned during the notice period awarded by the court
(or agreed to in a settlement) will be deducted from the
employee's damages. In almost every case, the employer will
argue that the employee did not make reasonable attempts to
look for alternate employment and that if the employee had
made such efforts he would have obtained employment.
Our case Winterburn v. Domtar (at paragraphs 41 and 42) provides an example where the employer alleged the employee had failed to mitigate her damages by turning down a job offer. We acted for the employee, Ms. Winterburn. The judge found that Ms. Winterburn was entitled to turn the offer down and was entitled to all of her damages. Each case will depend on its facts.
Whether a worker is an employee or an independent contractor
depends entirely on the facts of each case. Think of it as a
continuum: at one end is the true employee; at the other end
is the true independent contractor. An analysis of the
relevant factors determines where a worker falls on that
continuum. If you are closer to the employee end of the
spectrum, you will be entitled to reasonable notice. If you
fall towards the independent contractor end, you may still
be entitled to some notice.
Some of the factors a court will consider in determining a worker's status include:
- The duration / permanency of the relationship;
- The degree of reliance;
- The degree of exclusivity;
- The degree of control exercised by your employer;
- Provision of / ownership of tools;
- Whether you have a chance of profit or a risk of loss in the business
In our case Mangal v. Cdn Blood Services we acted for Dr. Mangal. One of the issues was whether Dr. Mangal was an employee or an independent contractor (see paragraphs 13 - 16). The judge concluded that Dr. Mangal was "most akin" to an employee. Dr. Mangal had provided 4 years service to his former employer and was awarded a notice period of 8 months.
A restrictive covenant is a promise not to do something. The
most common types of restrictive covenants in an employment
context are non-competition and non-solicitation agreements.
Such agreements can prohibit or place parameters on a
departing employee's post-employment activities. Such
agreements are applicable whether you resigned OR whether
you were terminated.
In determining whether a restrictive covenant agreement is enforceable, our courts assess a number of factors, such as:
- Does the employer have a legitimate business interest to protect?
- Is the restriction reasonable in its duration (number of years)?
- Is the agreement reasonable in its geographical restriction?
- Is the nature of the restriction (what it prevents you from doing) reasonable or is it overly broad?
- Are the terms of the agreement clear or is there
The employer has the burden of proving that the terms of the restrictive covenant are reasonable.
If you are a fiduciary employee, then, even if you have not
signed a non-competition or solicitation agreement, you are
still subject to post-employment restrictions that are
implied by the common law. A fiduciary cannot take, or
divert to others, a maturing business opportunity, or
solicit her former employer's customers or employees for a
reasonable period post-departure. Fiduciaries are usually
top management roles and are characterized by an ability to
exercise discretion and power unilaterally in affecting the
employer's legal and practical interests.
All employees who are not fiduciaries still owe their former employer a common law duty not to divulge or otherwise use trade secrets and other confidential information acquired during employment. Again, this is so whether or not an agreement to this effect has been signed.