Whether related to a downturn in business, restructuring, ongoing performance issues, inappropriate conduct, or lack of a suitable fit, every organization will, at some point, face the reality of termination. Managing terminations should be handled carefully and compassionately.

While termination decisions should never be made lightly, once it’s determined that it’s definitely the right course of action (after alternatives are considered), they should be carried out, rather than avoided. However, in doing so, they should always be intentionally and carefully managed.

We preface this conversation by stating that we are not lawyers and nothing in this post should be considered legal advice. We do work regularly with legal counsel and, regardless of the fundamental decision points/steps to be taken, very often reach out to them – particularly when circumstances are out of the norm or have other mitigating factors. This is, in part, because very few, if any, termination-related situations are straightforward. Additionally, the termination landscape is an increasingly litigious one, in which employees are increasingly protected. While that may, at times, be frustrating, it shouldn’t necessarily be seen as a bad thing.

A second preface is the difference between the Employment Standards Act and the Canada Labour Code, which needs to be taken into consideration.

As we mention above, for many of the points outlined below, keep in mind that HR and/or legal counsel should be involved, particularly where circumstances are not straightforward.

Fundamental steps/considerations of termination:  

  • Be 100% clear on the situation and all of its moving parts. If you or a manager want to terminate, what are the reasons for doing so? If it’s related to performance or conduct, what steps have been taken to give the employee feedback, support them, provide them with the opportunity to improve? As applicable, have you followed your stated progressive discipline or performance improvement practices? Have those steps been enough?
  • What other factors are/may have been at play? Are there personal or family circumstances that may have impacted the situation? Have those been reasonably accommodated and supported? Keep in mind that the point of undue hardship for disabilities (which is what Human Rights requires) is a grey area and takes into consideration a number of different factors.
  • If terminating for cause, keep in mind that it’s very difficult to prove cause and the onus is upon the employer to do so.
  • In order to determine the amount of notice/pay in lieu, review the employee’s employment agreement and the termination clause within. Provided that the clause is legally sound, follow the clause outlined. If there’s no agreement or termination clause in place, common law applies, which, in the vast majority of cases, will be higher than the ESA or CLC (especially in the case of management/senior employees).
  • Prepare a termination letter with the help of HR or external specialists, if/as needed.
  • Determine whether you need/will use a Release (refer to ‘mitigating risks’ below).
  • Determine what, when, how and where (i.e. what you’ll say, when you’ll schedule it for, how and where you’ll do it). While all of these points mitigate risk, more importantly, it’s about treating the employee with dignity, compassion, and respect. Consider what will have the least negative impact on the employee.
  • If you/the manager and/or the employee are working remotely, take that into careful consideration. While we always recommend in-person termination discussions, we appreciate that may not be possible, given current circumstances. Video may be the next best option, but be particularly careful about when, where, and how (taking into consideration privacy and safety as well). It would not be appropriate to terminate someone via video when they’re working from a coffee shop, for example.
  • Be prepared and know that termination discussions are not and should not feel easy/like no big deal. Given the potential impact on an employee’s life and wellbeing, it is a big deal to terminate an employee, under any circumstance.

What can be done to help mitigate risks to the organization?

  • Ensure that your employment agreements are solid and current (in all respects), particularly where termination and protective clauses are concerned, and take into consideration recent case law. We highlight this here, as we’ve seen a number of agreements that include termination clauses that list out the reasons for termination with cause:

In a recent legal case in Ontario (Waksdale), an employee was terminated without cause, following the employment agreement which addressed both “without cause” and “for cause” circumstances. However, although the “without cause” portion of the clause was onside and unambiguous, the “with cause” clause very clearly outlined a number of circumstances under which the employee would be terminated for cause – many of which were ambiguous/could have been interpreted as offside. Despite the fact that the agreement contained a Severability clause (stating that if any part of the agreement is determined to be invalid, illegal or unenforceable, that part would be severable and the remainder would continue), the outcome of this case found that the agreement must be interpreted as a whole, not “piecemeal” within a given clause, and the termination clause in this case was not onside as a whole.

  • Ensure you have solid documentation. This isn’t about building a case, or “keeping a file”, but rather (as noted above) about having a clear history on the expectations you’ve laid out, how you’ve supported the employee to improve, and what consequences have been communicated. Keep in mind that, in order to be both fair to the employee and legitimately considered, anything on file (be that within the employee file or otherwise) must also be shared with the employee. For example, it’s not enough to simply keep a log of all the times an employee has been late without conversations and follow-up with the employee.
  • Provide a termination letter that outlines last day, notice/pay in lieu/severance that will be paid out within the required timeframe (this differs between ESA and CLC), how benefits will be handled (e.g. if extended/when they’ll stop), expectations for returning property, reminders of the clauses they signed as applicable (e.g. non-solicitation, confidentiality, non-compete, etc.).
  • Consider using a Release if you will be providing notice/pay in lieu/severance that goes over and above what is required by law. Keep in mind that you can’t require an employee to sign a Release to get what they are entitled to by law. For example, if you follow the minimum ESA termination provisions and are letting go of an employee of two years, you should not expect them to sign a Release in order to get the two weeks of notice or pay in lieu. However, if you want to give them two weeks more (for example), you may want to consider using a Release.
  • Be cautious about what you say and keep the meeting brief. While “for cause” terminations differ, given circumstances (and should never be a surprise), “without cause” terminations should be kept respectfully brief and to the point. The less that’s said, the better (e.g. this isn’t the time to go into performance issues!).

If you do terminate – and you’re clear it’s for the right reason – always keep in mind the potential impact on the employee, in terms of personal and financial well-being (as well as, to a lesser degree, on co-workers). While it may eventually be (and often is) the best outcome for the employee, as well as your organization, don’t let that thinking lead to a laissez faire process. In every case, regardless of circumstances, plan very carefully and proceed with respect and compassion.