While there are basic legal principles that apply to employee termination, the law does not remain static as it is continually being reinterpreted by the courts.
This reality was made clear to those who attended a presentation by John Carruthers which was hosted by Verity this past May: “Remember the Bear: Five New Traps to Avoid in an Employment Termination”. John is a lawyer with Cattanach Hindson Sutton VanVeldhuzen LLP. His practice focuses on litigation, dispute resolution and dispute prevention.
John provided an overview of recent legal decisions and offered practical advice for employers and their Human Resources professionals. The central ideas which he wanted attendees to take away with them were these:
- Short service employees, on a months per year of service basis, often are awarded more generous severances than longer service employees. So employers should not focus solely on length of service.
- When assessing severances, the “low level” nature of an employee’s role is a factor of declining relative importance. Even if the employee can be classified as possessing lesser skills, it does not mean that she will necessarily have an easier time finding alternative employment than would a person in a highly skilled or managerial position.
- Believing that the employment termination provisions in an employment contract or hire letter are iron-clad is sometimes a mistake.
- Taking the time and devoting resources to provide assistance and support to employees who have been terminated usually saves money and maintains positive relationships. A dignified and humane employment termination meeting, a positive reference letter, outplacement counselling, and staying in touch are relatively small things that can make a big difference.
- There is duty of good faith that is required by all parties in the performance of a contract. It is important to only make promises that can actually be delivered.
- There is no duty to mitigate where an employment contract specifies the penalty for early termination of the contract, unless it specifically stipulates that a duty to mitigate exists.
Attendees demonstrated great interest in the new trends and developments which John described. They asked numerous questions and stayed long past the scheduled time to speak with John one on one. Rose Minichiello, Verity’s Managing Director, Career Management & Transition, observes that the attendees were particularly surprised by the number of notable court rulings in the past few years. For example, while executives have traditionally been allotted the longest severance periods, employees at the bottom rung are now receiving greater severance payments than they once would have (e.g. a 68 year old shipper receiver with 28 years’ service was determined to be entitled to a severance of 22 months).
John’s presentation highlights the need to not only be aware of the law and technicalities relating to employee terminations, but to also be sensitive to the human aspects of such actions. Unnecessary and drawn out disputes can be avoided if departing employees are treated with respect and given the necessary support to move on to a new role quickly and successfully.