Top 10 Issues For Employers, Issue #7: Obligations When Terminating Without Cause

Top 10 Issues For Employers, Issue #7: Obligations When Terminating Without Cause

Article by Labour & Employment Group
Blake, Cassels & Graydon LLP

This is the seventh instalment in our Top 10 Issues for Employers series. This issue addresses termination entitlements upon a “without cause” dismissal.

OVERVIEW

Understanding an employee’s entitlements upon a without cause dismissal is an essential step towards avoiding unnecessary wrongful dismissal claims. Canadian law imposes obligations on employers to provide their employees with certain entitlements in the event of a without cause dismissal. Since there is a very high bar for establishing “just cause” — which generally permits an employer to provide no notice or other entitlements upon dismissal — the vast majority of terminations in Canada will be without cause.

REASONABLE NOTICE OF TERMINATION

In the absence of an enforceable termination clause in a written employment contract, an employee’s termination entitlements will be governed by Canadian common law (with the exception of Quebec, discussed below). One obligation imposed upon employers by the common law is to provide employees with reasonable notice of termination of employment, or pay in lieu of reasonable notice, in the absence of just cause for dismissal.

There is no fixed formula for determining reasonable notice in any given case. There are, however, several factors that courts consider when determining reasonable notice, including the availability of similar employment as well as the employee’s age, length of service, position and level of compensation. In essence, the courts aim to identify, on a case-by-case basis, the length of notice that the employee will need to find alternate work of a similar nature. By way of example, reasonable notice generally ranges from a few weeks up to 24 months depending on the above factors, but there are exceptions.

The concept of reasonable notice signifies actual or written notice. In principle, the employee is expected to continue his or her active employment during the applicable notice period. As an active employee, the individual would usually be entitled to all elements of his or her compensation package during the notice period. However, employers typically provide an employee with pay in lieu of notice or a “package” upon termination of employment rather than actual or working notice. Thus, in the pay in lieu of notice scenario, to mirror what they would have received had they been provided with actual notice, employees are generally entitled to payment reflecting all elements of their compensation package, including, for example, salary, benefits and pro-rated bonus or other incentive compensation (subject to the terms of any applicable policies or plans).

Written employment agreements may modify and/or limit an employer’s common law obligations. In general terms, where there is a proper and enforceable employment contract that specifies what the employee will receive upon termination of employment, then it will be the employment contract — and not the common law — that the employer will rely on in determining an employee’s entitlements upon termination. However, any contract that a court finds as providing less than the employee’s minimum statutory entitlements will be viewed as unenforceable and an employee in such a scenario will be entitled to reasonable notice of termination.

QUEBEC CONSIDERATIONS

Common law principles are not applicable in Quebec. Rather, employers’ obligations are established by the Civil Code of Québec, which provides that an employee can claim reasonable notice (or compensation in lieu of notice) of the termination of his or her employment, such that an employee’s entitlements upon a without cause dismissal in Quebec are substantially similar to those of employees in the common law provinces and territories.

That being said, Canadian employers should be aware of the fact that there are unique legislative and other requirements relating to employment in Quebec that are not present in the common law provinces and territories.

STATUTORY MINIMUM STANDARDS

Employment standards legislation in all Canadian jurisdictions sets out minimum notice (or pay in lieu of notice) obligations for employers when they dismiss an employee without cause. It should be emphasized that the statutory minimums prescribed by employment standards legislation with respect to notice and severance are just that — minimum standards. They represent the lowest possible amounts that an employee is entitled to receive on dismissal without cause. An employer cannot contract out of the statutory minimum entitlements.

Generally, an employee’s entitlement to statutory minimum notice of dismissal increases with his or her length of service. For example, in Ontario, employees are generally entitled under statute to one week’s notice (or pay in lieu of notice) for each completed year of employment, to a maximum of eight weeks. Although employees’ entitlement to notice of termination of employment varies slightly from province to province, employment standards legislation across the Canadian jurisdictions currently provide for a maximum statutory notice requirement of eight weeks or less.

Further, many employment standards statutes include enhanced notice requirements for employers that effect a mass termination of employment, which is defined in most provinces and territories as the dismissal of 50 or more employees in a span of four weeks or less (although in several provinces the threshold is as low as 10 employees).

In Ontario and the federal jurisdiction, employment standards legislation also requires employers to provide employees with statutory severance payments (in addition to statutory notice or pay in lieu of notice) in certain circumstances. In Ontario, employees who have five or more years of service at the time of their dismissal are entitled to statutory severance pay, if their employer has a payroll of C$2.5-million or more, or if the dismissal is part of a discontinuance of a business involving the termination of 50 or more employees in a period of six months or less. Severance pay is equal to one week’s pay for each completed year of employment and a proportionate amount of one week’s pay for a partial year of employment, to a maximum of 26 weeks’ pay. In the federal jurisdiction, an employee is entitled to statutory severance pay if he or she has completed 12 consecutive months of employment with an employer before being dismissed. Statutory severance pay in the federal jurisdiction is calculated as the greater of two days’ wages for each year of employment completed by the employee and five days’ wages.

BONUS AND OTHER INCENTIVE AWARDS

Even after the appropriate length of notice has been determined, there are often still disputes over whether compensation for lost bonus or other incentive awards should be included. As mentioned above, when employees are provided with pay in lieu of notice, they are normally entitled to all elements of compensation that they would have received had they remained employed during the notice period, which may include bonus and other incentive awards. However, the terms of any underlying bonus or incentive plans or policies are relevant to the determination of whether compensation for such awards should be included as part of an employee’s termination entitlements. For this reason, employers should ensure they have well-drafted plan documents.

CONCLUSION

Determining an employee’s entitlements upon a without cause dismissal may not always be straightforward. It requires considering whether common law reasonable notice applies or whether a contractual provision (including those which may limit an employee to the statutory minimums) governs an employee’s termination entitlements. If common law reasonable notice applies, the notice period must take into account various factors, including the availability of similar employment as well as the employee’s age, length of service, position and level of compensation. On the other hand, a contractual termination provision must be checked to ensure it is enforceable and that it complies with applicable statutory minimum standards. Finally, it must be determined which elements of compensation will be owed during the notice period, including bonus or other incentive awards.

Investing in well-drafted employment contracts and plan documents at the outset, and ensuring they are regularly reviewed and updated, is a good way to avoid potential pitfalls and bring additional certainty and consistency to the termination process.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Older Canadians forgoing retirement, working through golden years: census

The three months of Bill VanGorder’s retirement were among the longest of his career.

Lured by the promise of relaxation and spare time, the Halifax resident thought he’d relish the opportunity to walk away from an executive position and enjoy the fruits of his labour. But restlessness and a desire to keep contributing drove him back to the job market within weeks, and he was ensconced in a different corporate office three months after relinquishing his old one.

In the four years that followed, a global economic crisis ate into VanGorder’s retirement savings, making the prospect of ongoing work both attractive and inevitable.

Eventually, he decided to go into business for himself, allowing the flexibility of both a stable work life and the perks of retirement _ making VanGorder, 74, a prototype of the new brand of retiree.

The latest census data from Statistics Canada show more and more Canadians are choosing to eschew the traditional retirement age, whether for their health, their finances or just for the fun of it.

More than 53 per cent of Canadian men aged 65 were working in some form in 2015, including 22.9 per cent who worked full-time throughout the year, compared with 37.8 and 15.5 per cent, respectively, in 1995, the census numbers show.

At the age of 70, nearly three in 10 men did some sort of work in 2015, twice the proportion of 20 years earlier. Full-time work was at 8.8 per cent, up from 5.4 per cent in 1995.

The shift is even more dramatic for women, a reflection of their escalating role in the workforce. Some 38.8 per cent of senior women worked in 2015, twice the proportion of 1995, while the percentage of women working at 70 more than doubled over the same 20-year period.

The numbers show it’s high time for governments and businesses to re-evaluate the way they view Canada’s senior citizens, VanGorder said.

“One of the great problems we have … is the myth that because our population is older than the rest of the country, that’s a terrible thing and we’re a terrible draw on resources,” he said in an interview.

“What we have is a large group of seniors who are very productive, who want to contribute to the economy, who are able to offer mentorship and leadership to younger people.”

Experts agree that the large pool of baby boomers deferring retirement beyond the traditional age of 65 represent a formidable cohort for governments and employers to contend with.

Demographer David Foot said their impact is not as noticeable as it was when they first began to enter the workforce decades ago, since their ranks have slowly been thinned by health problems and even death. But mounting financial pressures and increasing life expectancy are forcing those that remain to work longer than previous generations.

The average person’s lifespan has increased two years per decade for the past 50 years, said Foot, author of the best-selling “Boom, Bust and Echo,” which anticipated the impact of the aging baby boom.

“It’s stretching out our work life so we’re no longer thinking of retiring in our early 60s any more, and it’s stretching out retirement,” he said. “Many people now have the opportunity to look forward to 20, possibly even longer, years of reasonably healthy retirement.”

That prospect, Foot said, puts a strain on people’s financial resources, particularly in an age when guaranteed pensions are no longer reliable sources of income.

Foot said the current crop of retirees are more likely to have a stable, defined-benefit pension plan, unlike future generations forced to make do with a defined-contribution plan _ if any.

As a result, Foot suggested most working seniors will only defer their retirements by up to five years, and are likely to prefer part-time work _ a trend already borne out by Wednesday’s numbers.

Despite its advantages, however, the aging workforce has yet to be embraced by private enterprise, said Canadian Labour Congress senior economist Angella MacEwen.

While retail operations may have part-time work to offer its aging employees, she said companies with seniors in white-collar jobs need to rethink their approach.

“We haven’t had a discussion about retaining, maybe transitioning people into roles of mentorship, having them work part-time, flexible hours,” MacEwen said.

“They have a lot of valuable skills to contribute, so it would be useful to maintain them in some capacity. But in a lot of cases it’s still a choice between full-time or nothing.”

MacEwen said efforts to accommodate older employees would have benefits for younger staff too, dismissing the notion that the prolonged presence of seniors would pose professional barriers for those hoping to rise through the ranks.

Employing older people allows them to keep participating in the economy, she said, creating more jobs that can ultimately be filled by people of all ages.

VanGorder, meanwhile, wants to see governments focus on providing training opportunities for the types of seniors who are rapidly becoming the norm.

“Some of us older business people have been brought kicking and screaming into the digital age because our businesses depend on (it),” he said.

“Older workers need that kind of retraining, they want it, and they can’t get it.”

 

Mississauga Campus: November 30th – Insurance Specialist Info Session

Mississauga Campus: November 30th – Insurance Specialist Info Session

Insurance Specialists help provide peace of mind. Learn how you can be a part of this fascinating industry on November 30th at the triOS College Mississauga Campus!

Hear from special guest speakers and find out how you can start a career in insurance.

Date: Thursday, November 30th
Time: 12pm – 1:30pm
Location: Mississauga Campus – 55 City Centre Drive, 2nd Floor

– Hear from industry experts
– Meet with instructors
– Tour the facility
– Learn about hiring trends
– Get information about upcoming start dates

Don’t wait. Register now!

Email: info@triOS.com or call 905-949-4955

We look forward to seeing you there!

Source: www.trios.com

Expanded parental leave, new caregiver benefit, to come into effect Dec. 3

By Jordan Press

THE CANADIAN PRESS

OTTAWA _ New mothers and fathers planning to begin their parental leave on or after Dec. 3 will be able to spread their federal benefits over a longer period of time.

The federal government’s long-promised changes to parental leave rules will go into effect early next month, says Families Minister Jean-Yves Duclos, allowing eligible new parents to take up to 18 months of employment insurance benefits after the birth of a child.

On that same date, a new family caregiver benefits will also kick in one a 15-week leave to care for a critically ill or injured adult, the other a 35-week benefit to care for a critically ill or injured child.

Eligible soon-to-be-mothers will also be able to claim maternity benefits up to 12 weeks before the baby is due.

However, the government won’t increase the actual value of employment insurance benefits for anyone who takes the extended parental leave: instead, the Liberals are sticking with their 2015 election promise to spread 12 months’ worth of benefits over 18 months.

The change in rules will automatically give more workers in federally regulated workplaces like banks, transport companies, the public service and telecoms the option of taking time off, and are likely to spur calls for provincial changes to allow the other 92 per cent of Canadian workers access to similar leave.

So far, Ontario has publicly said it will amend its legislation to match the new federal rules.

Affected workplaces will have to decide how or even if to amend existing leave policies and collective agreements that spell out issues like salary top-ups.

As is, the federal parental leave program pays out benefits for up to 17 weeks for new mothers and allows parents to split an additional 35 weeks.

Under the changes first outlined in this year’s budget, new parents apply for employment insurance benefits, they will be able to decide whether to take additional weeks off, which can be split between parents.

Anyone who is already receiving 35 weeks of parental leave before the new measures officially come into effect won’t be able to switch and take the extra time.

The eligibility for the cash won’t change: A new parent will still need 600 hours of work in the previous 12 months to access benefits, while self-employed workers who have opted in to the EI system will need to have earned at least $6,888 in the last year.

The Liberals budgeted $886 million over the next five years for the new measures, and $204.8 million a year after that.

None of the parental leave changes will impact residents of Quebec, where the province runs its own parental leave program.

CONSIDERING A CAREER AS AN INSURANCE SPECIALIST?

CONSIDERING A CAREER AS AN INSURANCE SPECIALIST?

Insurance plays a prominent role in our everyday lives. Whether you are a homeowner, you rent a house or an apartment, or you own or lease a vehicle you need to protect yourself against the unexpected. As the older generation of employees in the insurance industry continue to retire, the demand for fresh talent rises. An education in this field opens up opportunities for a career that allows you to explore different paths and grow as a professional.

ILScorp has partnered with  triOS College of Business, Technology and Healthcare, to create the Insurance Specialist diploma program.  This program will prepare you with the essential skills you need in standard coverages, regulations and claims adjusting, and other key areas that will prepare you for a career in this sector. This program includes training and the ability to write the Registered Insurance Brokers of Ontario (RIBO) exam, an 8-week internship and more!

The Insurance Specialist diploma program at triOS is 45 weeks. It includes an 8 week internship.

PREPARATORY STUDIES
Student Success Strategies, Computer Fundamentals, Microsoft Office Applications, Career Planning & Preparation

WORKPLACE SKILLS
Interpersonal Communication, Client Relations, Critical Thinking, Group Dynamics

INTRODUCTION TO INSURANCE
General Insurance Standard Coverages, Insurance Regulations and Claims Adjusting, Ontario Specific Coverage and Forms, RIBO Exam Prep, Job Ready Provincial Compliance,
Insurance Industry Professional Ethics, Broker Skills Development, Property Insurance, Automobile Insurance

INTERNSHIP (8 WEEKS)

Students in this program will learn the main duties of an Insurance Broker:

Advocate on behalf of clients to ensure client satisfaction with insurance coverage

Build and manage client relationships with prospective, new and existing clients

Maintain relationships and client service levels by conducting renewal and follow-up clients

Issue insurance certificates, make policy changes and prepare documents

If you have decided to pursue a career as an insurance specialist, make sure you know all of these things collected in our Resources http://ow.ly/CCH230efuoW

Book a Tour at triOS College Today and Discover a Richer, More Rewarding Future!

Call: 1-877-550-1160

Visit: www.triOS.com

New TD call centre will create 575 jobs in Moncton, N.B., province says

MONCTON, N.B. _ TD has announced plans for a new call centre in Moncton, N.B., that the provincial government says will create up to 575 full-time jobs.

The Toronto-based bank will receive up to $9 million in financial assistance from the government, which says the call centre will add $109-million to the province’s GDP over six years.

TD says it is now looking for a location in the Moncton area.

It will be the second business service centre in New Brunswick for TD, of which former premier Frank McKenna is deputy chairman. TD’s Saint John insurance call centre employs about 700 people.

“Moncton is a vibrant community and we are elated to be expanding our presence here,” McKenna said in a statement.

The provincial government money includes a $6.8 million forgivable loan and $2.1 million for training.

New Brunswick, Canada’s only officially bilingual province, already hosts call centres for companies including WestJet, Sears, and Medavie Blue Cross.

“Business services centres provide thousands of New Brunswickers with employment and contribute greatly to our economy,” said Premier Brian Gallant.

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