In one scenario, a employer decided to terminate a worker without cause within the first six months of the worker returning to work. The appropriate paperwork was generated and agreed to by both parties. However, it is important to remember that s. 41(10) of the WSIA presumes that the employer has not fulfiled its re-employment obligations under WSIA when the termination occurs within six months of the employee's return to work. Such a breach carriers a penalty of up to one year of the employee's net average earnings. In addition, the employee may be entitled to ongoing WSIB benefits.
Provisions in the WSIA provide an opportunity for an employer to rebut the presumption by showing that the termination was not related to the injury or claim for WSIB benefits. Regardless, even if the employer returns the worker back to gainful employment, the breach of re-employment may still exist. Therefore, the key is proper documentation to support the termination which may include relevant evidence from the terms of the collective agreement, written company policy and / or practices. Records are necessary demonstrating progressive escalating disciplinary action taken for reasons unrelated to the work injury.
In drafting employment contracts, organizations must ensure that the terms of the contract do not violate any of the minimum standards set out in the ESA. Employment contracts should have termination clauses that are clearly worded and enforceable and set out termination pay (upon termination on a without cause basis) in order to limit the organization’s potential liability. Contractual termination provisions are legally enforceable so long as they meet the minimum statutory requirements of the ESA and are not in violation of any other law, such as the Ontario .
Only very serious misconduct will be considered just cause (e.g. theft, fraud, assault or sexual harassment, excessive unexplained absences, serious insubordination, conflict of interest). Dissatisfaction with the employee’s performance is rarely considered by courts to be just cause for dismissal. Prior to alleging cause, managers and boards of charities and not-for-profits need to carefully assess whether they want to take that position, as terminating for cause substantially increases the likelihood of litigation.
Termination pay and severance pay are statutory obligations on an employer. It is not appropriate to require an employee (being dismissed without cause) to sign a full and final release as a condition of being paid the minimum ESA entitlements. If offering more to the employee than the minimum ESA entitlements, then the employer is justified in asking the employee to sign a release, but only for those amounts in excess of the ESA minimums. There are rare occasions when it is appropriate for the employer to require the employee to sign a release in exchange for receiving ESA entitlements, such as when an employer discovers serious employee misconduct that it was not aware of at the time of termination.
Salary continuation is when an employee does not come to work, but continues to receive his/her regular salary and benefits for the duration of the reasonable notice period. The benefit to the employer is that the cost of termination is spread over several weeks or months, compared to an upfront lump sum payment. Salary continuation terminations are quite common, especially with longer term employees with long notice periods.
It is important that employers have all the termination paperwork ready for the meeting with the employee. The paperwork should include a termination letter (which will set out the package to be offered) and a full and final release.
It is not always necessary (or desirable) to terminate an employee immediately and provide pay-in-lieu of notice. A preferable option may be to have an employer provide an employee working notice (i.e. that their employment will end at some future date). The benefit to the employer is that they have an employee actively working for the duration of the notice period; however, employers need to consider on a case by case basis, whether working notice will be appropriate. An employee who is on working notice may not put forth the expected effort as he/she may be more concerned with finding a new job than carrying out his/her duties. Also, employers may want the process to end quickly as they may not want an employee negatively affecting the moral of the workplace.
In order to be eligible for termination pay or notice of termination, an employee must have worked at least three consecutive months for the employer.
The employee sent a letter to the employer asking them to"re-consider" the termination and requesting her benefitsbe re-instated as soon as possible. The benefits were reinstated bythe employer "to bring to an immediate stop the internalcompany paperwork necessary to give effect to the termination of[the employee's] employment. Unfortunately, communicationissues did not end there, the employee claimed she was terminatedin October when ordered to return to work. The employerhowever continued to treat her as an employee during thattime. For example, employer contributions continued tobe made.
But, not so fast. Mr. Holland argued that at the time of hire,he had not agreed to any limit on the amount he would receive ontermination. The Ontario Court of Appeal agreed. Giving Mr. Hollanda contract of employment nine months after he started employment,without also giving him something in exchange for his signing theagreement (consideration), meant that the employer could not relyon the additional terms included in the contract of employment.
The termination letter was sent in error and the employer tookimmediate steps to revoke the dismissal before it could be giveneffect. The plaintiff, through her actions in requesting andaccepting the health benefits, and in accumulating pensionable timecontinued to act as an employee of the defendant. The contract ofemployment was not repudiated when the employee issued herstatement of claim, nor was it frustrated by the plaintiff'sillness. Why was employment not repudiated?
For employers covered by collective agreements that contain provisions respecting the payment of wages upon termination, those collective agreement provisions prevail.