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Understanding the laws surrounding termination in the workplace is essential for both employers and employees in Canada. Employment termination can involve complex legal considerations, including the requirements for notice, severance pay, and the grounds for dismissal. Canadian employment standards legislation, alongside human rights laws, outlines the rights and responsibilities of both parties, ensuring fair treatment and protection against unjust dismissal. By being well-versed in these regulations, employers can navigate the termination process effectively while minimizing legal risks, and employees can better understand their rights and recourse options.
Termination of employment
An employer may terminate an employee with cause (for good reason) or without cause (for no reason).
An employer cannot terminate (with or without cause) an employee if the reason for termination is based on one or more protected grounds. For example, an employer cannot terminate an employee for being pregnant or because of their disability. An employer also cannot terminate an employee for making a human rights complaint. An employer can justify a termination where it is reasonable and justified in the circumstances or based on a bona fide occupational requirement (BFOR).
The employer may choose whichever option best suits their needs:
- An employer cannot disguise a discriminatory termination as something else.
- An employer has a duty to accommodate an employee to the point of undue hardship.
- An employer may terminate an employee if it is reasonable and justifiable, or based on a BFOR.
- An employee who has experienced discriminatory termination (termination connected to a protected ground) can make a human rights complaint within one year of the incident.
- A valid severance agreement or release may prohibit an employee from making an accepted human rights complaint.
- Employment standards legislation, not human rights legislation, applies to severance and termination pay.
The employer must pay the employee's earnings with 10 days after the end of the pay period in which termination occurred, or 31 consecutive days after the last day of employment.
Neither earnings nor other terms or conditions of employment may be reduced during the notice period.
Employers are prohibited from requiring employees to use entitlements such as vacation or overtime during the termination notice period, unless agreed to by both parties.
Deadline of payments for amounts owed
When employment is terminated, employers must pay the employees as follows:
- Within 10 consecutive days after the end of the pay period in which termination occurred, or
- 31 consecutive days after the last day of employment.
Further details on regulations under the Employment Standards Code can be found at Canlii.org.
Termination of employment
If an employer proves an employee was fired for just cause, there is no requirement to pay compensation for length of service.
An employer can fire an employee with just cause if they commit a serious offence. For example, if an employee steals, commits fraud, acts dishonestly, assaults or harasses others, or breaks company rules.
Unsatisfactory performance (for example, an employee is unable to perform job duties) or minor misconduct (such as lateness or not coming to work) are not considered just cause. An employer can fire an employee for these reasons as long as they give notice and/or pay.
An employer may be able to fire an employee for these reasons without notice or pay if they can show they did certain things. For example, the employer must prove that the employee:
- Was told clearly what the employer's reasonable standards are.
- Was told that they weren't meeting the standards.
- Had reasonable time and help to meet the standards.
- Was warned that they would be fired if they did not improve their behaviour.
- Still didn’t meet the standards after all of the above.
Employers must provide clear and consistent standards for all staff. They also need to act in a reasonable amount of time to correct employee behaviour. If they cannot show proof that they did this, they may not be able to prove just cause.
Employees who feel they have been fired without just cause can sue for wrongful dismissal. This is different than making a complaint for compensation for length of service with the Employment Standards Branch.
Further details on regulations under the EMPLOYMENT STANDARDS ACT can be found at BClaws.gov.bc.ca.
No Termination or Lay-Off
No employer shall lay off or terminate the employment of an employee entitled to take a leave because the employee is pregnant or intends to take a leave.
Payment Of Vacation Allowance on Termination
If an employee's employment terminates before he or she is entitled to an annual vacation, the employer shall pay the employee a vacation allowance equal to:
(a) if the employee has not completed five consecutive years of employment with the employer, 4% of the wages earned since the date the employee became employed by the employer or the date the employee last became entitled to an annual vacation, whichever is later; and (b) if the employee has completed five consecutive years of employment with the employer, an additional 2% of the wages earned from the date the employee last became entitled to an annual vacation to the date of termination.
Employment terminated before day off
If an eligible employee's employment is terminated before the day off to be given or is taken, the employer must pay the holiday pay, along with any other wages payable on termination, in accordance with wages to be paid within certain time.
Construction employees
If an employee is employed in construction:
(a) the employer must pay the employee the overtime wage rate for any hours worked on a general holiday; (b) before the end of each year or on termination of the employment, whichever occurs first, the employer must pay the employee, as holiday pay for all general holidays in the year, an amount equal to 4% of the employee's wages for the year, other than overtime wages, whether or not the employee works on any of the holidays.
Further details on The Employment Standards Code can be found at Canlii.org.
Termination of employment
- The termination of the employment relationship is due to the completion by the employee of a definite assignment that the employee was hired to perform over a period not exceeding twelve months, whether or not the exact period was stated in the employment contract;
- An employee has completed a term of employment that was fixed in the employment contract, unless the employee is employed for a period of three months beyond that period;
- An employee retires under a bona fide retirement plan;
- The employee is doing construction work in the construction industry; or
- The termination or layoff results from the normal seasonal reduction, closure or suspension of an operation.
The requirements when an employer chooses to dismiss an employee for cause
When an employer dismisses an employee for cause, the employer must give the employee the reasons for the dismissal in writing. The Employment Standards Act does not have any provisions as to when this notice should be provided, however the Labour and Employment Board has established criteria in this regard. As such, the notice should be provided upon dismissal or within a reasonable time depending on the circumstances. The employer will need to prove that the employee received a dismissal notice.
Where the employer does not provide the reasons in writing, the dismissal becomes a termination and for an employee employed with an employer for 6 months or more, the employer will be required to pay the employee what he would have earned during the applicable notice period.
The requirements when an employer chooses to terminate or layoff an employee
Where an employee has been employed with an employer for less than six months, the employer is not required to give the employee advance notice of the termination or layoff.
Where an employee has been employed with an employer for a period of at least six months but less than five years, the employer must give the employee at least two weeks written notice of the termination or layoff.
Where an employee has been employed with an employer for a period of five years or more, the employer must give the employee at least four weeks written notice of the termination or layoff. The employer may choose to pay the employee the wages the employee would have earned during the applicable two or four week notice period instead of providing a written notice.
The requirements when an employer chooses to terminate or layoff a group of employees
When an employer intends to terminate or layoff in a four week period more than ten employees if they represent at least 25% of their employees, the employer must first give notice to the Minister of Post-Secondary Education.
Further details on the Employment Standards Act can be found at Canlii.org.
RESPONSIBILITIES
Responsibility Of Employees
- Provide the employer with the appropriate period of written notice of his/her resignation as specified in this policy;
- Seek information from the HR Client Service Centre, about the benefits which may be due at termination, such as accrued severance, leave entitlements, group insurance, and any applicable pension benefits.
If terminated without cause:
- Work their notice period unless the employee receives pay in lieu of notice for the entirety, or a portion, of the notice period. An employee who fails or refuses, for reasons unacceptable to the department, to work a notice period, or a portion of a notice period, will have their entitlement to notice and/or pay in lieu of notice correspondingly reduced; and
- If desired, submit a request, in writing, to the Deputy Minister for pay in lieu in the form of a lump sum payment.
Responsibility of Managers
- Administer progressive discipline in consultation with the Treasury Board Secretariat;
- Comply with collective agreement provisions for bargaining unit employees;
- Support the department in the relevant termination of employment processes; and
- Consult with the Treasury Board Secretariat regarding termination matters.
Responsibility of the Deputy Ministers or their designate
- Consult with the Treasury Board Secretariat, the Department of Justice and Public Safety and the Clerk of the Executive Council, to discuss the appropriate course of action and notify employees in writing that their employment is terminated, the effective date of the termination, and the reason for the termination; and
If terminated without cause,
- Make a decision on whether working notice, pay in lieu of notice or a combination of working notice and pay in lieu of notice is warranted.
Termination with Cause
The employer’s decision to terminate employment with cause will follow the principles of progressive discipline. Serious offences may result in immediate termination.
The employer is required to provide the employee with written notification of termination. The employee is entitled to receive any salary, paid leave, overtime pay, and severance pay accrued up to the date of termination.
Termination without Cause
The employer may terminate the employment relationship for reasons that are not related to cause. Termination without cause is not the same as situations involving position elimination.
Further details on the Termination of Employment Policy can be found at Gov.NL.ca.
TERMINATION OF EMPLOYMENT
Dismissal or suspension without just cause where the period of employment of an employee with an employer is ten years or more, the employer shall not discharge or suspend that employee without just cause.
An employee who is discharged or suspended without just cause may make a complaint to the Director.
An employee who has made a complaint and who is not satisfied with the result may make a complaint to the Board and such complaint shall be and shall be deemed to be a complaint within the meaning of the Act.
Exceptions to the Requirement to have Just Cause or to Give Notice
The Labour Standards Code says there are times when an employer can end the employment of an employee with 10 years or more of service without just cause and without notice or pay in lieu of notice. This includes:
- When there is a sudden and unexpected lack of work that the employer could not avoid, e.g., because of an explosion in the workplace.
- When the employer offers the employee other reasonable employment.
- When an employee has reached the age of retirement based on a bona fide occupational requirement (for most jobs, mandatory retirement is not allowed).
Termination of employment by employer
An employer shall not discharge, suspend or lay off an employee, unless the employee has been guilty of wilful misconduct or disobedience or neglect of duty that has not been condoned by the employer, without having given at least:
(a) one week’s notice in writing to the person if his period of employment is less than two years; (b) two weeks’ notice in writing to the person if his period of employment is two years or more but less than five years; (c) four weeks’ notice in writing to the person if his period of employment is five years or more but less than ten years; and (d) eight weeks’ notice in writing to the person if his period of employment is ten years or more.
Termination of employment by employee
Where an employee has been employed by an employer continuously for three months or more, the employee shall not terminate the employment unless the employer has been guilty of a breach of the terms and conditions of employment, without first having given:
(a) one week’s notice in writing to the employer if the period of employment is less than two years; and (b) two weeks’ notice in writing to the employer if the period of employment is two years or more.
Further details on the Labour Standards Code can be found at NSlegislature.ca
Termination of Employment
(1) No employer shall terminate the employment of an employee who has been employed by that employer for a period of 90 days or more, unless the employer:
(a) gives the employee a written notice of termination indicating the date the notice is given and the date on which the employment is terminated; or (b) pays the employee termination pay.
(2) This does not apply to an employee:
(a) who is temporarily laid off; (b) who is employed in an activity, business, work, trade, occupation or profession that is exempted by regulation; (c) whose employment is terminated for just cause; (d) whose employment is terminated because the employee has refused an offer by the employer of reasonable alternative work with the employer; or (e) who is on temporary layoff and does not return to work within seven days after being requested to do so in writing by the employer.
The Employment Standards Officer may declare that an employer has terminated the employment of an employee, if the Employment Standards Officer is satisfied that:
(a) the employer has substantially altered a condition of the employee’s employment; and (b) the purpose of the alteration is to discourage the employee from continuing in the employment of the employer.
Termination pay
An employer who wishes to terminate the employment of an employee by paying termination pay in place of giving notice of termination shall pay the employee termination pay in an amount equal to the wages and benefits to which the employee would have been entitled if the employee had worked his or her usual hours of work for each week of the period for which notice would otherwise be required.
Exceptions
The above does not apply to an employee:
(a) who is temporarily laid off; (b) who is employed in an activity, business, work, trade, occupation or profession that is exempted by regulation; (c) whose employment is terminated for just cause; and (d) whose employment is terminated because the employee has refused an offer by the employer of reasonable alternative work; or (e) on temporary layoff who does not return to work within seven days after being requested to do so in writing by the employer.
Permanent layoff
Where an employer temporarily lays off an employee and the layoff exceeds a temporary layoff,
(a) the employment of the employee shall be deemed to have terminated on the last day of temporary layoff; and (b) the employer shall pay the employee termination pay, calculated in accordance with regulation.
Further details on the Labour Standards Act can be found at Canlii.org.
TERMINATION OF EMPLOYMENT
What Constitutes Termination
An employer terminates the employment of an employee if:
(a) the employer dismisses the employee or otherwise refuses or is unable to continue employing him or her; (b) the employer constructively dismisses the employee and the employee resigns from his or her employment in response to that within a reasonable period; or (c) the employer lays the employee off for a period longer than the period of a temporary lay-off.
Temporary Lay-Off
Temporary layoffs are:
(a) a lay-off of not more than 13 weeks in any period of 20 consecutive weeks; (b) a lay-off of more than 13 weeks in any period of 20 consecutive weeks, if the lay-off is less than 35 weeks in any period of 52 consecutive weeks and,
(i) the employee continues to receive substantial payments from the employer, (ii) the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan, (iii) the employee receives supplementary unemployment benefits, (iv) the employee is employed elsewhere during the lay-off and would be entitled to receive supplementary unemployment benefits if that were not so, (v) the employer recalls the employee within the time approved by the Director, or (vi) in the case of an employee who is not represented by a trade union, the employer recalls the employee within the time set out in an agreement between the employer and the employee; or
(c) in the case of an employee represented by a trade union, a lay-off longer than a lay-off described in clause (d) where the employer recalls the employee within the time set out in an agreement between the employer and the trade union.
Lay-off, Regular Work Week
An employee who has a regular work week is laid off for a week if:
(a) in that week, the employee earns less than one-half the amount he or she would earn at his or her regular rate in a regular work week; and (b) the week is not an excluded week.
Lay-off, No Regular Work Week
An employee who does not have a regular work week is laid off for a period longer than the period of a temporary lay-off if for 35 or more weeks in any period of 52 consecutive weeks he or she earns less than one-half the average amount he or she earned per week in the period of 12 consecutive weeks that preceded the 52-week period.
Temporary Lay-Off Not Termination
An employer who lays an employee off without specifying a recall date shall not be considered to terminate the employment of the employee, unless the period of the lay-off exceeds that of a temporary lay-off.
Deemed termination date
If an employer terminates the employment of an employee, the employment shall be deemed to be terminated on the first day of the lay-off.
Further details on the Employment Standards Act can be found at Canlii.org.
Payment on termination of employment
Any pay to which an employee is entitled on the termination of his or her employment shall be paid by the employer to the employee not later than the last day of the next pay period after the termination of employment.
Payment on termination of employment
Any pay to which an employee is entitled on the termination of his or her employment shall be paid by the employer to the employee not later than the last day of the next pay period after the termination of employment.
Pay statement
(1) Every employer shall give to every employee, at the time pay is being paid to the employee a statement in writing, showing:
(a) the name and address of the employer and the name of the employee; (b) the period of time or the work for which the wages are being paid; (c) the regular rate of wages to which the employee is entitled and the number of hours worked; (d) the gross amount of wages to which an employee is entitled; (e) the gross amount of any vacation pay being paid to the employee; (f) the gross amount of any pay in lieu of notice of termination being paid to the employee; (g) the amount and purpose of each deduction; (h) any bonus, gratuity, living allowance, or other payment to which the employee is entitled; and (i) the net amount of money being paid to the employee.
Vacation pay on termination of employment
Where an employee’s employment with an employer ceases, the employer shall, not later than the last day of the next regular pay period after the employee’s employment ceases, pay to the employee:
(a) an amount equal to four per cent of the employee’s wages for the period the employee has worked for the employer, if the employee has worked for the employer for a period of less than twelve continuous months from the date the employment commenced; (b) an amount equal to four per cent of the employee’s wages for the period the employee has worked for the employer from the date the employee last became entitled, under subsection (1), to vacation with pay, if the employee has been employed continuously by the employer for a period of at least one year and less than eight years; or (c) an amount equal to six % of the employee’s wages for the period the employee has worked for the employer from the date the employee last became entitled, under subsection (1), to vacation with pay, if the employee has been employed continuously by the employer for a period of at least eight years.
Further details on the Employment Standards Act can be found at PrinceEdwardIsland.ca.
In Québec, employers have duties and responsibilities when it comes to employment termination, beyond just providing notice.
Final Wages and Compensation: Employers are required to pay all outstanding wages to an employee upon termination. This includes any earned but unpaid wages, overtime, and accrued vacation pay. The final payment should be made within a stipulated time frame, usually no later than the next regular payday.
Severance Pay: Québec's Act Respecting Labour Standards (Loi sur les normes du travail) mandates severance pay under certain conditions, particularly for long-term employees. The amount and eligibility for severance pay depend on factors such as the length of service and the terms of the employment contract.
Employment Records: Employers must maintain accurate employment records, including details about wages, hours worked, and other employment terms. These must be provided to employees in termination.
Health and Safety: Employers are responsible for ensuring the workplace is safe and healthy up until the employee's last day. This includes providing any necessary safety equipment and ensuring that any termination process does not compromise the employee’s safety or dignity.
Psychological Harassment and Discrimination: Employers must take reasonable steps to prevent psychological harassment and discrimination in the workplace. This includes having a clear policy on harassment, providing training to employees, and promptly addressing any complaints.
Mass Layoffs: If an employer is terminating 10 or more employees within a two-month period, special rules apply. The employer must follow specific procedures, which include notifying the Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST) and potentially providing additional compensation and support to the affected employees.
Benefits and Pensions: Employers must handle any benefits and pensions according to the agreed terms in the employment contract. This might include the continuation of health insurance benefits for a specified period or providing information on how the employee can maintain their benefits independently.
Further details on the Act respecting Labour standards can be found at LegisQuebec.gouv.qc.
PAYMENTS IN CASE OF LAYOFFS OR TERMINATIONS
If an employer lays off or terminates the employment of an employee, the employer shall pay to the employee, with respect to the period of the required notice:
(a) if the employer is not bound by a collective agreement that applies to the employee, the greater of:
(i) the sum earned by the employee during that period of notice; and (ii) a sum equivalent to the employee’s normal wages for that period; or
(b) if the employer is bound by a collective agreement that applies to the employee, the entitlements provided for in the collective agreement.
If the wages of an employee, not including overtime pay, vary from week to week, the employee’s normal wages for one week are deemed to be the equivalent of the employee’s average weekly wage, not including overtime pay, for the 13 weeks the employee worked preceding:
(a) the date on which the notice of layoff or termination was given; or (b) if no notice of the layoff or termination was given:
(i) the date on which the employee was laid off or terminated; or (ii) a date determined in the prescribed manner.
If an employer lays off or terminates the employment of an employee at a remote site, the employer shall provide transportation without cost for the employee to the nearest point where regularly scheduled transportation services are available.
Further details on the Saskatchewan Guide to Termination can be found at scaonline.ca.
Termination by an employer
An employer may end the employment of an employee who has worked for them for less than six months for any reason (subject to the Human Rights Act). After six months, the employer must provide the employee with notice and must allow the employee to work and earn wages during the notice period.
This rule does not apply to:
(a) the construction industry; (b) a seasonal or intermittent job that lasts for less than six months in a year; (c) an employee discharged for just cause. (d) an employee whose employer has failed to abide by the terms of the employment contract; (e) an employee on temporary layoff; (f) an employee employed under a contract of employment that is impossible to perform due to an unforeseeable event or circumstance; or (g) an employee who has been offered and who has refused reasonable alternate employment; (h) an employment relationship that ends because the contract or the assignment the employee was hired to performed is completed, if 12 months or less; (i) an employee hired on an employment term that was set in the employment contract unless they remain employed for one month or more after the term is completed.
Temporary Lay-Off
“Temporary layoff” means an interruption of an employee’s employment by an employer for a period:
(a) not exceeding 13 weeks of layoff in a period of 20 consecutive weeks; or (b) exceeding 13 weeks of layoff, if the employer recalls the employee to employment within a time set by the director.
Just cause Defined
An employer is not required to give notice or pay in lieu of notice if they have just cause to terminate the employment of an employee.
“Just cause” has been defined in common law to fall into two categories: serious misconduct or minor misconduct.
An employer may terminate the employment of an employee for just cause for serious misconduct if the employee engages in fraud, theft, misappropriation or otherwise engages in dishonesty that goes to the core of the employment relationship.
An employer may terminate the employment of an employee for just cause for minor misconduct if:
- The employer set and communicated to the employee reasonable standards of performance;
- The employee was notified of their failure to meet the standards;
- The employee was given sufficient time to meet the standards;
- The employee was informed of the risk of termination if they continued to fail to meet the standards; and
- The employee continued to fail to meet the standards. Employers must provide clear and consistent standards for all staff. They must also take steps to correct employee behaviour in a reasonable amount of time.
Further details on the Employment Standards Act can be found a Laws.yukon.ca and Yukon.ca.
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