Apr 18

Toronto Employment Lawyer: What Notice of Termination is Owed

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Have You Been Terminated Recently? This post explains what notice you are owed


YOU MAY BE ENTITLED TO MORE THAN YOU THINK

Employees are often unaware of what their entitlements are. Employees that have been terminated on a “without cause” basis are entitled to notice of their termination or pay in lieu thereof. Employers will attempt to limit liability by providing an employee with the minimum notice period claiming it is their only obligation in accordance with the Employment Standards Act, 2000 (“ESA”). Employers may also require an employee sign a “release agreement” upon termination, to avoid any future litigation. It is an employee’s right to have this reviewed by a lawyer and is HIGHLY RECOMMENDED.

The ESA sets out the minimum entitlements, such as minimum wage. Just as an employee is not restricted to only receive minimum wage, they can also receive an increased notice period upon termination under specific circumstances. Section 8 of the ESA outlines that “no civil remedy of an employee against his or her employer is affected by this act.” Therefore it cannot be used to limit an employees right.

Employers must have two things in order to limit an employee to the minimums as outlined:

1.     A written offer of employment/employment contract and;

2.     A valid termination provision within that contract containing the appropriate language in accordance with the statutory entitlements as indicated in the ESA*.

The absence of either of the above may allow for employees to receive an elongated notice period. This principle is supported in the decision of Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986, 1992 CanLII 102 (SCC), at paragraph 19 it states: “In Canada, it has been established since at least 1936 that employment contracts for an indefinite period require the employer, absent express contractual language to the contrary, to give reasonable notice of an intention to terminate the contract if the dismissal is without cause”.


*It is important for an employee to know that just because you have a contract that may mention the ESA, does not mean the clause is valid.
Therefore, if you are terminated you may be entitled to additional notice or pay in lieu thereof.

To determine your eligibility for additional compensation, always have your documentation reviewed by a lawyer.

There is no exact calculation for what your reasonable notice period would be. Each case must be decided based on their own circumstances, factors that are considered include, the length of service, position, age, availability of similar employment along with the employees experience, training and qualifications.

 

In a paper written by Arbitrator & Mediator, Barry B. Fisher he outlines the shortcomings of our present methodology in determining reasonable notice and to see how it changed following Honda Canada Inc. v. Keays decision along with methods of improving how reasonable notice is determined. Mr. Fisher determined that when looking at length of service alone, the cases show the following relationship between reasonable notice and length of service. The ESA minimum entitlements have been incorporated with Mr. Fisher’s chart for ease of reference:

Years of Service

Cases in Database

Service Average

Months Per Year of Service

Notice Average

ESA Entitlements*

.6 to 2.5 years

147

1.5

2.6

3.94 months

1-2 weeks

2.6 to 5

130

4

1.4

5.43 months

2-5 weeks

6 to 10

182

8

1.1

8.56 months

6-8 weeks*

11 to 15

132

13

.9

11.82 months

8 weeks*

16 to 20

116

18

.8

14.48 months

8 weeks*

21 and 25

80

23

.7

15.52 months

8 weeks*

26 and 30

42

28

.6

16.72 months

8 weeks*

This is representative of the average notice individuals would be provided based on their years of service. The minimum notice as set out in the ESA is one (1) week per year of service to a maximum of eight (8) weeks, this is called termination pay. Based on the above information if an employee was earning a salary of $50,000.00 per year in remuneration he/she would be entitled to a period as outlined below:


Reasonable Notice: 3 Years of Service –  4.2 months (3 x 1.4 months per year of service) or $17,500.00

                             10 Years of Service – 11 months (10 x 1.1 months per year of service) or $45,833.33


ESA Entitlements: 3 Years of Service – 3 weeks or (3 x 3 weeks per year of service) or $2,884.62

                           10 Years of Service – 8 weeks* (10 x 10 weeks per year of service) or $7,692.31

*Larger companies with over $2.5 million in payroll may be required to pay an additional week per year of service, to a maximum of 26 weeks. Employees that are eligible must have a minimum of 5 years of service, this is called severance pay.

It is clear that the ESA outlines a much lower notice period than that of reasonable common law notice. All employees that are terminated should contact an employment lawyer in order to determine if their circumstance warrants the award for additional notice.