Based on the circumstances described, proceeding with a without-cause termination, paying the employee their minimum entitlements under Ontario’s Employment Standards Act, 2000 (ESA), and amending the Record of Employment to reflect the termination is a reasonable step. The ESA payment should be provided unconditionally and should include all required termination pay, vacation pay and benefits continuation for the statutory notice period. Any amount offered beyond the ESA minimum in exchange for a release should remain clearly separate from these statutory entitlements.

It is important to recognize, however, that paying the ESA minimum does not necessarily eliminate the employee’s potential constructive or wrongful dismissal claim. Because the original employment agreement apparently did not contain a temporary layoff provision and the employee has expressly reserved their right to pursue constructive dismissal, there may still be potential common-law notice exposure. The earlier offer of four weeks does not limit that exposure unless the employee signs a valid release.

The employer should also ensure that the termination documentation and amended ROE accurately reflect the sequence of events. Care should be taken not to suggest that the employer is admitting the temporary layoff amounted to constructive dismissal or that the termination is occurring because the employee objected to the layoff. The termination should instead be documented as a without-cause decision, with a clear and consistent effective date.

All relevant records should be retained, including the employment agreement, communications regarding the loss of customer work, the temporary layoff notice, the employee’s objection, the settlement offer and deadline extension, payroll calculations, benefits information, the original and amended ROEs, and the final termination communication. The employer should also confirm that there are no other statutory issues that could affect the termination, such as mass termination requirements, protected leaves, accommodation obligations or potential reprisal concerns.

Given that this situation involves a disputed temporary layoff, a potential constructive dismissal claim and possible common-law notice obligations, it requires more individualized legal analysis than can appropriately be provided through a general question-and-answer forum. I recommend that the employer refer this matter to qualified Ontario employment legal counsel for review of the employment agreement, termination date, potential liability and final termination documentation, and direct any further questions on this specific matter to legal counsel.

I hope this helps and wish you well!
-HRInsider Staff