Termination With CauseEmployers can dismiss employees for just cause if they are guilty of serious misconduct, such as theft, fraud, or violence. In these scenarios, the employee is not entitled to any severance.
Termination Without CauseA 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 may infer what is NOT contained in the agreement) will guide the interpretation of any written agreement.
- Legislation. An employee’s rights are governed by a provincial or federal statute. It is important to determine which statutes might apply
- 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 may determine the severance or damages to which an employee is entitled.
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 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)
Depending on the terms of a written agreement (or often, in the absence of one), many (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 cases, instead of advance working notice, an employer will offer an employee salary continuance or a lump sum payment.
Wrongful dismissal occurs when an employer fires an employee in breach of the conditions of the employment contract. However this is another complicated area of the law as contracts can be interpreted differently, so employers might have a different reading of the terms of agreement than the employee does. While not all employees may have a formal contract, in Canada, a contract may still exist by virtue of the employment relationship. Also, terms in the company’s employee handbook might be deemed elements of an employment contract. Certainly, an employer must follow to the letter the lawful termination procedures outlined in their own handbook, or a suit of wrongful dismissal may be legitimately pursued.
Additionally, an employee cannot lawfully be fired for:
- Discrimination: An employee cannot be fired due to race or nationality, religion, sex or sexual orientation, or age;
- Retaliation: An employee can’t be fired because they make complaints about any of the areas of discrimination referenced above; or
- Refusing to do something illegal.
An employee can also be determined to be wrongfully dismissed if they have been force to resign. (See Constructive Dismissal, below).
Proof of wrongful termination can result in reinstatement, or compensation for the dismissal.
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, this occurs when:
- There has been a substantial decrease in compensation and/or benefits;
- There has been a significant change in job duties and responsibilities;
- It is a toxic work environment in which the employee is subjected to harassing behaviour.
There can be other facts or a combination of factors which give rise to a constructive dismissal claim. The employee’s resignation might be the result of a single event or a series of events.
Should an event be found by the courts to be a constructive dismissal, the law generally requires the employee to remain in or return to the workplace, unless it would be humiliating to do so.
When this occurs, the employee may have grounds to sue for constructive dismissal. This requires that the employee prove they had no reasonable choice but to resign. This could be as a result of a single event, or a series of events; however the resignation must have occurred shortly after the event or events, showing the direct connection between the event and the resignation. If the case is successful, the employer will be found responsible for proper compensation to the employee. This might include sufficient severance to allow the employee to find new work or even retrain; it could include coverage of any medical expenses resulting from the strain of the event; and it may include coverage of some or all of the employee’s legal expenses.
This is a complex area of the law. If you are considering resigning due to difficult conditions at work, we encourage you to speak with a lawyer before making any decision or taking any action.
Termination of Employment While on Leave
Sometimes, employers dismiss employees who are on leave from work. Employees can be on approved leave from work for many reasons, such as illness, maternity, or even jury duty. The law offers some protection to these dismissed employees, largely in the form of entitlement to severance.
However, there are certain types of leaves where the law may provide the employee with remedies beyond the normal severance. Here are some examples:
Pregnancy & Maternity/Parental Leave
Pregnancy and Maternity or Parental leaves are protected. When the leave ends, employers are supposed to return the employee to their job, or a comparable job. If an employer fires an employee while on pregnancy, maternity or parental leave, the employee will normally have a claim at the BC Employment Standards Branch. The employee may also have a human rights claim.
Workers Compensation Injury Leave
If an employee is injured at work, they can usually claim workers compensation benefits while they recover. If an employer fires an employee while on Workers Compensation leave, the employee will normally have a claim through WorkSafe BC. WorkSafe BC may even investigate the dismissal and fine the employer.
Jury duty leave, as well as family responsibility leave, compassionate care leave, reservists’ leave, and bereavement leave, are all protected leaves from work under provincial legislation. If an employer fires an employee while on one of these leaves, the employee will normally have a claim at the BC Employment Standards Branch.
Sick Leave & Disability Leave
An employee shouldn’t lose their job because they became sick or disabled. In such a case, the employer should work with the employee to return them to their job, or a reasonable alternative job, once the employee is medically cleared to return. If an employer fires an employee because they became sick or disable, the employee may have a claim under human rights legislation.
What to Do
If you have been fired while on any kind of leave, contact a lawyer to find out what remedies are available for you.
When an employee is terminated they may believe that they have no ability to negotiate their severance package. If the employer is truly offering an appropriate package, that may be the case. However in many instances, employers seek to conduct terminations with the least expense possible. Because of this, it’s usually prudent for a terminated employee to connect with a lawyer – even for an hour or two of advice – to ensure the severance they are being offered is an appropriate one.
“Appropriate” depends on a number of conditions, starting with whether the termination was with or without cause.
Employers can dismiss employees for just cause if they are guilty of serious misconduct, such as theft, fraud, or violence. In these scenarios, the employee is not entitled to any severance.
However, even when an employer alleges cause, that is not always the case. Moreover, most dismissals in B.C. are done without cause. This means that the dismissal is not the employee’s fault, and the employee is entitled to advance notice of dismissal, or a severance payment.
In order to calculate the severance, we first need to consider statutory laws that set out what notice or severance should be for that particular employee. For example, the Employment Standards Act sets out minimum notice or severance entitlements for most provincially regulated employees, and the Canada Labour Code sets out minimum notice or severance entitlements for most federally regulated employees. If you aren’t sure if your position is provincially or federally regulated, you can research this information on the internet or speak with a lawyer.
Next, we look at the employee’s contract to see if it includes any termination clauses, and to see whether those clauses are enforceable.
It’s important to note that this requires careful consideration, as the mere existence of items in a contract doesn’t necessarily mean they are valid.
Finally, we try to get a sense of what is fair and practical for your situation by looking at examples of similar cases that went to court, often called “common law”. As a general concept, judges will try to provide employees with enough severance to cover them for the period of time it takes the employee to find a new job. Judges consider the employee’s age, length of service, and the nature of the employee’s job, and estimate based on those factors how long it will take the employee to get re-employed.
Once we have a better sense of what the appropriate calculation is, we provide that information to you. At that point, you can either take this information before your employer, or you can have your lawyer do so.
For more information, watch this video and/or speak with a lawyer to determine if you are being offered the appropriate amount of severance.