Category Archives: Severance

Four Easy Ways to Get Fired

Here are four things that many employees do on a regular basis that could get them fired.  Some may be surprising.

1) Checking Facebook  – an employee is required to spend all of their working time working.  Shocking I know!  Using computers for personal purposes such as checking Facebook, your stock portfolio, or playing minesweeper can be considered time-theft, insubordination or disobedience and can be just cause for dismissal.

2) Questioning the Boss – challenging the boss’s directions, even if their decisions are bone-headed and destined to fail, so long as they aren’t illegal, can be cause for your dismissal.  Insubordination is particularly culpable if it is done in front of other employees, since this can seriously undermine the boss’ ability to control the workforce.  It is the boss’ company and she or he has the right to run it into the ground if they so choose.

3) Updating your Linkedin Profile/Blogging – if you are using linkedin to try to find a new job, or to take away customers for some private gain, that could be considered competing with your employer and acting against their interests.  It will be interesting to see a case make it to the courts over who owns the data in a linkedin account.  In general, employees don’t get to take their contact lists when they leave a company.  Linkedin and other cloud based electronic devices change the game in this regard.  If you blog, do so on your own time or with your employer’s express permission.

4)  Bragging in the Interview – everyone talks their best game in the job interview.  However, you had better be able to put your money where your mouth is.  Courts have held that employees who do not live up to the hype they put out in their job interviews can be terminated for this reason, without notice, in the early stages of the employment.  However, after a certain point the employer will be taken to have accepted any such shortcomings, and will be required to provide the requisite notice.

Canadian case law, such as McKinley v. BC Tel, [2001] 2 S.C.R. 161, states that each case is circumstance-dependant and must be judged in the context of the entire employment relationship.  Discipline imposed by the employer must be proximate to the seriousness of the improper employee behaviour.  Further, in most cases warnings must be given along with corrective measures the employee is to take, before such issues can be a proper basis for just cause.

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Filed under Discipline, Severance, Termination, Termination

Ontario Court overrides Maximum Length of Notice – A Sign of the Times?

A 65 year old Ontario employee, who was fired by Suzuki Canada Ltd., was recently awarded more than two years pay as severance.  The employee was an assistant warehouse supervisor, and was Suzuki’s longest serving employee in Canada, with 36 years of employment.  The traditional legal term for such service is A Hellofa Long Time.  He was terminated as part of “restructuring” (aka layoffs) by Suzuki due to economic woes.   Suzuki low-balled the employee (in hindsight) by offering the employee only 34 weeks salary as severance.

Normally, the courts impose a general rule that wrongful dismissal damages in lieu of notice (not including damages for improper acts in the manner of dismissal) are limited to a 24 month cap.  However, the court found that the employee’s age and other factors made it difficult for him to find a new job.  The court awarded him 26 months, based on his ‘exceptional circumstances’.  The court held that it was reasonable to grant the employee a reasonable amount of time to get over the initial shock of the termination.  He started a job search after three weeks after his termination, on which the court opined “[i]t is frankly remarkable that, in his circumstances, the plaintiff was able to organize himself so quickly”.

This case highlights an increasingly common dilemma for employers: Until recently employers were able to require mandatory retirement for 65 year olds, without notice.  It is a sign of things to come that there will be conflicts between older workers, being pushed to retire by employers who would prefer to fill their positions with younger (and often lower paid) workers.  The challenge is that these employees usually have a long service record, making them expensive to terminate, as in this case.

The practical solution for employers in such cases is pre-planning.  Sometime the economy doesn’t give you that luxury.  Remember, when terminating an employee without cause, an employer does not need to offer a severance package coupled with immediate termination, they must simply give the employee sufficient notice so they have time to find a new job.  As long as the reason for the termination is not the employee’s long-in-the-toothedness, which would be discriminatory, giving a long notice periods will generally fulfill an employers obligation.  Making long range HR plans will allow employers to give lengthy notice periods to employees who they no longer wish to employ, without breaking the bank.

Case citation: Hussain v. Suzuki Canada Ltd. (2011) 209 A.C.W.S. (3d) 101

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Filed under Employee's Info, Employer's Info, Severance, Termination, Termination, Uncategorized

Tough Times

Tough times are clearly still with us.  This recent CTV article, says that “Canada’s employment rate fell for the second month in a row in November as the economy shed 18,600 jobs. That pushed the jobless rate up one notch to 7.4 per cent.”  Grim news indeed.

We employment lawyers see it on the front lines – employers calling us with necessary termination decisions, employees calling us because they have been terminated, through no fault of their own, because their employers are cash strapped.

The key when making redundancy decisions is to truly make them on the basis of what is best for the company.  Unfortunately, when the hatchet comes out, it is usually wielded to deal with old grievances in the workplace, such as issues between workers.  Employers need to make sure that the decisions can’t be argued to be discriminatory, and take into account the cost to the company of terminating various workers.  On top of avoiding such pitfalls, lawyers can help determine the approximate cost of terminating various employees, based on their individual severance entitlements, and HR professionals should be consulted to do a holistic overview of the total cost to the company associated with terminating various positions.

Perhaps non-legal advice is the best advice in such times – keep your chin up, keep calm and carry on, and never let ‘em see you sweat.

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Filed under Employee's Info, Employer's Info, Severance, Termination, Termination

Member of Parliament Severance and Pensions

Now that the federal election has passed, the doors of parliament have revolved and we have tossed out half the members of parliament, comes the resulting bill we may not have considered.  The Canadian Taxpayers Federation has crunched the numbers on MP severance and pensions packages.

Apparently, MP’s get severance of 50% of their salary if they have served less than 6 years (which is eons considering the elections they had to endure in last minority government), a pension if they are over 55 and served longer than 6 years, and both if they served longer than 6 years and are below 55.

The breakdown is here but the highlights are:

  • Michael Ignatieff: $116,624 severance, but does not qualify for a pension.
  • Ujjal Dosanjh: $40,197 per year – estimated lifetime value of $829,693
  • Gilles Duceppe: $140,765 per year – estimated lifetime value of $2,905,486.

Wouldn’t it be nice if we all had pensions like this?  There is of course a lot of criticism, but it’s not exactly a easy to win elections and hold power in Canada.  Considering MPs have a base salary of just over $157,000, it does not seem totally out of line.  I hope the 20-something year old New Democrat MPs have good financial advisors to help them deal with their newfound wealth, but with these kind of pensions perhaps there is no need for saving.

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Filed under Pensions, Pensions, Severance

Termination Tips for Employers

If you are an employer who is dismissing an employee without cause for termination, here are five tips to consider:

1. Be Kind

Keep in mind that being terminated is tough on an employee. It involves a life change, and feelings can get in the way. Do what you can to minimize the impact on them, and keep the emotions to a minimum. The court may award increased damages if it finds the employee was treated unfairly in the termination.

2. Say it in Writing

If you meet with an employee to terminate them, prepare a letter to them setting out the details, go over it with them at the meeting, and leave them with a copy.

3. Calculate Severance Pay

Speak to a lawyer briefly beforehand to determine what the employee is entitled to as severance pay. Unless a written employment contract specifies otherwise, any long-term employee will likely be entitled to substantially more than the amount set out in the Employment Standards Act. The appropriate length of notice depends on a number of factors. A short discussion with a lawyer at
this stage will save you a large amount of legal fees and other expenses down the road.

4. Get a Final Agreement

If you are going to pay out severance over and above the statutory entitlement under the Employment Standards Act, you should get a release of all the employee’s potential claims, along with a signed letter detailing the terms of the termination. Getting a lawyer to help with both documents is money well spent because it will prevent you paying out, only to end up in court later.

5. Spell out the Ground Rules

Make sure you have agreed on essential issues such as:

• whether the severance will be paid in a lump sum or as a salary continuance;
• whether the employee has an obligation to look for work and report those efforts to you;
• who will make tax deductions; and
• what information, client lists, phones, etc. need to be returned.

Once you have handed over the severance, you can’t expect you will be getting any concessions, so make it clear early.

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Filed under Employer's Info, Releases, Severance, Termination