To Fire Employees in Canada, You Need a Reason and Notice

​United States companies with operations in Canada should be aware that work culture is different north of the border, especially when it comes to dismissing an employee.

The concept of at-will employment does not exist in Canada.

"Employers need to be respectful when terminating an employee," said Cissy Pau, principal consultant at Clear HR Consulting in Vancouver, British Columbia. "They should notify employees in nonunion work environments they will be let go with sufficient notice. Either the terminated employee will finish his or her time with the company, or the employer may choose to pay him or her out."

Under provincial law, fired employees must be given notice or paid in lieu of notice, so what is considered sufficient notice varies by province.

Hilary Page, an attorney with SpringLaw in Toronto, said employers should consider several factors to determine what is reasonable when firing an employee in Canada:

• Age: If an employee is close to retirement age, then he or she is entitled to more notice.
• Length of service: An employee who has worked his or her entire career at an employer will be entitled to more notice than one who has worked at a company for a shorter time.
• Availability of comparable employment: The fired worker may have to move for his or her next job, depending on experience, training and qualifications, and consequently will be entitled to more notice.
• Character of employment: If a job is unique or commands a high salary, then it will be harder for the employee to find a comparable job. So the employee will be entitled to more notice.

Employment Termination Across Provinces

While each Canadian province has its own employment standards legislation that sets out minimum standards and minimum notice of termination entitlements, most employment and human rights laws in Canada are similar, noted Lisa Stam, founder of SpringLaw. "When an employee's job is over, the amount of notice can be set by contract or governed by common law in each province." Courts establish common law through their decisions.

There are some differences from province to province, said George Vassos, an attorney with Littler in Toronto. For example, minimum notice in Ontario is eight weeks after eight years' service, but in Alberta, it is eight weeks after 10 years' service.

"In addition, the Ontario statute requires minimum severance pay in addition to minimum notice, whereas the other provinces do not require minimum severance pay," Vassos said.

British Columbia gives employees one week's pay in lieu of notice of termination after three consecutive months of employment, Pau noted. Currently, the maximum amount of pay a fired employee can receive in the province is eight weeks of pay in lieu of notice if he or she worked for the same company for eight years.

Meanwhile, Quebec differs from most Canadian provinces because it has a civil law system, like France, Park stated. Unlike other Canadian provinces, the Quebec legislature has extended job protection measures to employees with two or more years of uninterrupted services for the same employer, similar to unionized employees, according to business law firm McMillan. Once an employee reaches this benchmark period, an employer cannot terminate him or her without good and sufficient cause, noted Shari Munk-Manel, partner at McMillan in Montreal.

Despite the French influence, Quebec employment standards are relatively similar to the rest of the country, Park said.

Federal employment standards apply to less than 20 percent of Canadian workplaces, Stam pointed out. The Canada Labour Code governs federal workplaces, such as the federal government and interprovincial industries like airlines, banking, shipping and telecommunications.

The federal statute sets out minimum employment standards and specifies minimum notice requirements, Vassos noted.

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Termination Challenges for Canadian HR

HR professionals often struggle with the first step of firing an employee: determining whether there is just cause for termination, Vassos said. "If there is cause, then no notice or pay in lieu is required. [But] cause is very difficult to prove, and practitioners struggle with that threshold decision in many cases."

Most employers do not know what reasonable notice is, Pau said. "[Firing employees] doesn't happen every day. HR is not sure how to structure the termination. Should they default to employment standards, or go above and beyond?"

Pau suggested HR should conduct frequent check-ins and conversations with employees during a probationary period. That way, there should be no surprises if the worker is fired.

Employers' proper handling of terminations will minimize legal repercussions and respect individuals, even during the final phase of the employment relationship. "Termination is always the last resort," Munk-Manel said.

Catherine Skrzypinski is a freelance writer based in Vancouver.