By Matt Lalande in Employment Law on July 21, 2018
3 Minute Read from Hamilton Employment Lawyers
There is no doubt that losing your job is terribly difficult thing to go through, not to mention a major blow to your self-esteem. Many people view their jobs as a critical component of their identity and self-worth. For many people, being fired is analogous to loss of identity and self-worth. The loss of a job also can lead to a strong sense of the loss of pride and onset of guilt for not being able to provide for your family and for bringing uncertainly into the lives of your dependents and loved ones. The problems that you face after being terminated and your loss of salary can be monumental, particularly at a time when kids are involved in many activities, real estate prices have sky rocketed, mortgage payments are near un-affordable, student loans can be overwhelming and the overall high cost of living can cause families a major struggle to make ends meet.
Most employees do not know their full legal rights or the scope of their employer’s obligation to provide reasonable notice of termination if they have been terminated without cause.
If you are being terminated without cause (i.e. summary dismissal for doing something as bad a getting drunk at work and beating up your boss), you are entitled to sufficient notice of your termination if you have been continuously employed for more than 3 months. Your employer has to give you sufficient notice that you are being terminated. The amount of notice to which you are entitled varies. Notice depends on how long you have been working for your employer – and not only all time while you are actively working but also any time that they are not working but the employment relationship still exists – for example, if an employee is on maternity leave.
The Ministry of Labor mandates a minimum amount termination pay which is dependent on your term of service. You can find the information here. In addition to termination pay you may be able to severance pay under circumstances. In addition to termination and severance pay, our Courts have made it very clear that there is an obligation on the employer to give reasonable notice; failure to do so will expose the employer to damages for the loss of salary and benefits the employee would have received during the period of reasonable notice. The primary purpose of reasonable notice of termination is to give an employee an opportunity and a reasonable period of time to search for a job – but the period of notice is not necessarily equivalent to the period required to find new employment – or a bridge to retirement. The law places a limit of reasonableness upon the notice period.
Firstly, it’s important to understand that proper notice of termination is an implied term of your contract of employment, but providing you payment in lieu of or payment instead of notice is not. Employees are not entitled to “a package” but rather, they are entitled to notice of the termination of their employment. But in many cases, employers would rather pay employees instead of giving them notice of their termination.
For example, if a dental clinic wants to terminate a 57 year old dentist that has been dutifully employed for 15 years, then it must give that dentist proper notice of her termination. The clinic must pay the dentist a minimum of 5 weeks minimum – but – the dentist may be entitled to a longer period of reasonable notice because it might be more difficult for her to find a job since she is a professional and she is 57 years old. The clinic has the option of letting the Doctor work out notice, or they can offer to pay her a lump sum instead. Payment in lieu of a notice period is seen by the court as an attempt to compensate an employee for the employer’s breach of the contract of employment, not as an attempt to comply with an implied term of the contract of employment. The amount of money paid to the dentist should place her in the same financial position she would have been in at the end of the period of notice had he actually been given the appropriate notice of the pending termination.
Therefore an employee, when entitled to notice, can be offered to working notice, a lump sum payout, or a combination of both options.
While the purpose of the notice period is to provide time for employees to find alternate employment, it is certainly a task made more difficult while the employee undertakes to fulfill the terms of working notice.
Courts are of the view that there is no functional difference at law between working notice and payment in lieu of notice.
It is important to remember that proper notice of termination is an implied term of the contract of employment; payment in lieu of notice is not. Lambert J.A in Dunlop v. British Columbia Hydro and Power Authority (1988), 1988 CanLII 3217 (BC CA), 32 B.C.L.R. (2d) 334,  2 W.W.R. 518 (C.A.), stated it clearly when he said that that payment in lieu of notice is seen as “an attempt to compensate for [the employer’s] breach of the contract of employment, not as an attempt to comply with an implied term of the contract of employment”.
The quantum of a payment in lieu of notice, therefore, is not calculated in accordance with the terms of the contract, but rather is a means by which an employer may terminate an employee contrary to its common law duty to give reasonable notice of termination, without incurring any liability.
During the statutory notice period, yes. An employer is obligated to continue to pay any and all benefits that you were entitled to such as health care and dental care, life insurance, STD & LTD The termination must include the continuation of benefits throughout the statutory notice period. Employers often refuse to continue LTD and life insurance after an employee’s last day of work. During the period of reasonable notice (outside outside of the statutory notice) our Courts will more times than not rule that an employer is required to make the employee whole for the entire common law notice period – including the continuation or the value of benefits, since they were a part of your annual remuneration.
The determination of reasonable notice is “a very fact-specific exercise and is calculated in accordance with the numerous factors as set out in an old case Bardal v. Globe & Mail Ltd along with other variables such as length of service, the position, age, education, the probability of finding similar employment, whether or not you were a specialist or professional, whether or not there was inducement involved, whether or not there was a break in service ect.
In addition to your notice payment, you may also be entitled to extra-contractual damages. Since the case of Keays v. Honda Canada Inc. was decided several years ago, the manner of an your termination is relevant to aggravated damages for breach of the implied obligation of good faith and fair dealing. Compensation is not an “extended notice period” per say, but as a monetary quantum for damages. In light of Keays, this conduct would be better regarded as a factor in determining aggravated damages.
If you have been terminated without cause it is important that you have a Hamilton wrongful dismissal employment lawyer review your termination package. Please feel free to call us at 905-333-8888 or fill in one of our contact forms or chat with our live operator 24/7. We welcome phone consultations province wide and are happy to discuss your case at no-charge. If we feel that you have a case, we will be more than happy to let what legal options you might have.