Canada: The Timing of Terminations Is Key

 

By Emily Cohen-Gallant and Caroline DeBruin August 20, 2019
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​If a Canadian employer has decided to fire an employee, it should consider when to conduct the termination. Terminations are stressful for employees and daunting for managers and HR professionals. While there is never a perfect time to break the bad news to an employee, picking the best time to conduct the termination can help ease the employee's discomfort and the financial impact on the employer.

Time of the Week and Day

Many HR professionals believe that firing a worker in the middle of the week is the best practice. A midweek termination gives the employer time to prepare for the employee's departure and allows the worker to start a job search and seek legal advice immediately.

Those who suggest an afternoon termination believe an employee appreciates coming into the office for work rather than to just be fired. This also allows the fired worker a subtle exit near the end of the workday without having to endure the curious gazes of colleagues.

On the other hand, employees dismissed in the afternoon may feel that their workday was pointless and they were used. Employees let go in the afternoon may also, like those fired on a Friday, have to delay seeking legal advice and job hunting. Morning terminations give the employee time to digest the discharge and prepare conversations with friends and family. Additionally, waiting for an afternoon termination can distract the employer's HR team throughout the day and lead to reduced productivity.

Time of Year

Employers should consider the time of year, too. This includes assessing seasonal spikes in hiring, upcoming holidays and dates that are important to the employee.

For instance, firing a worker on his or her birthday or on a religious holiday can tarnish an employer's reputation and could even lead to aggravated damages.

Leaves

Avoid firing an employee who is on a leave of absence or has recently returned from a leave. Terminations during or just after a leave can lead to discrimination claims, and many provinces have job-protected leaves with limited exceptions. If an employer is found to have discriminated in firing an employee on leave, the employer may have to pay damages and potentially reinstate the worker with back pay.

Employers should have evidence to prove that a dismissal was unrelated to leave taking. A common permissible reason for firing an employee on leave is if the employer can show that the fired employee's position is being eliminated as part of a restructuring.

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

Bonuses and Commissions Payouts

If the employee receives or will receive a bonus, commissions payout or other incentive payout close to the firing date, the employer should consider severance pay requirements. In Ontario and in federally regulated industries, employees can be entitled to severance pay, in addition to notice of when the termination will occur, or pay in lieu of notice. The federally regulated sector includes banks; marine shipping, ferry and port services; air transportation; railway and road transportation that crosses provincial or international borders; and radio and television broadcasting.

In Canada, employees must get notice of when they'll be discharged or paid instead of being notified. The length of the notice or amount of pay instead of notice depends on a variety of factors, including the fired worker's age and length of service and the availability of comparable employment. Pay instead of notice does not replace severance pay. In Ontario, severance pay can be as much as 26 weeks' pay.

Ontario's Employment Standards Act, 2000 requires the employer to calculate severance pay and termination pay in lieu of notice for employees by averaging how much the workers earned in the 12 weeks before the firing.

For example, if an employee received an annual bonus 10 weeks before termination, the bonus will have to be included in the 12-week average. Including it will make the severance pay and termination pay in lieu of notice much more than if the termination occurred three weeks later.

These averaging provisions are designed to ensure that employees who earn pay other than straight salaries are not prejudiced by anomalous earning levels in the weeks before their terminations, but they can have the unintended consequence of inflating employees' earnings when they earn a large, irregular payment shortly before their termination. 

Even in jurisdictions where severance pay is not mandated, a payout close to a termination can increase an employee's termination pay in lieu of notice. HR professionals should consult the legislation for the province in which the employee works, as each province has different calculating requirements.

Emily Cohen-Gallant is an attorney with Ogletree Deakins in Toronto. Caroline DeBruin is a J.D. candidate at Queen's University in Toronto. Edward Majewski, an attorney with Ogletree Deakins in Toronto, assisted with this article. 

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