Terminating an employee is never an easy decision for any employer. However, there are times when it becomes necessary to let an employee go. Whether it’s due to poor performance, misconduct, or downsizing, employers must follow the proper legal procedures when terminating an employee. Failure to do so can lead to costly legal disputes and damage to your company’s reputation. Those issues could be mitigated by using an Employer of Record (EOR). In this article, we’ll discuss what employers need to know when terminating an employee in Canada.
Things to Know:
- Know the Laws
Employers in Canada must follow federal and provincial employment laws when terminating an employee. The laws governing terminations can vary depending on the province or territory where the employee is located. Employers must ensure they are familiar with the laws in their specific jurisdiction before proceeding with a termination. It’s also important to note that certain employees, such as those on a fixed-term contract or unionized employees, may have additional protections and requirements under the law.
- Provide Notice or Pay in Lieu
In Canada, employees who are terminated without just cause are entitled to notice of termination or pay in lieu of notice. Notice periods can vary depending on factors such as length of service and the employee’s age. Employers must provide written notice of termination to the employee, or they can choose to pay the employee instead of providing notice. If an employer chooses to pay the employee instead of providing notice, the amount must be equivalent to the amount the employee would have earned during the notice period.
- Conduct Exit Interviews
When an employee in Canada is terminated, it’s a good idea to conduct an exit interview. This can help you identify any issues that may have contributed to the termination and provide valuable feedback for improving your company’s practices. It’s also an opportunity to gather any company property from the employee, such as keys, access cards, and electronic devices.
- Consider Severance Pay
In addition to providing notice or pay in lieu of notice, employers may also be required to provide severance pay to employees who are terminated without just cause. Severance pay is typically calculated based on the employee’s length of service and salary. Employers should consult their provincial or territorial employment standards legislation to determine if severance pay is required.
- Document Everything
Finally, it’s essential to document everything related to the termination. This includes the reasons for the termination, the notice provided, any payments made, and the employee’s response. Keeping detailed records can help protect your company in the event of a legal dispute.
Terminating an employee is never easy, but following the proper legal procedures can help ensure a smooth transition for everyone. Employers in Canada must ensure they are familiar with their specific jurisdiction’s employment laws and provide proper notice or pay in lieu of notice. Conducting an exit interview, considering severance pay, and documenting everything related to the termination can also help protect your company’s interests.
