Tweet

Breaking up is hard to do: Ending the employment relationship

Guest post by: Cori Maedel

Article Overview: As human resources consultants, it’s our job to keep up with HR law so that you don’t have to. However, there are many legal areas employers need to be aware of and while we don’t claim that reading this will provide the answers to all, we do hope that it might open up some discussion. We’ll start with the often tricky topic of ending an employment relationship.

Breaking up is hard to do: Ending the employment relationship

As human resources consultants, it's our job to keep up with HR law so that you don't have to. However, there are many legal areas employers need to be aware of and while we don't claim that reading this will provide the answers to all, we do hope that it might open up some discussion. Here's some information about the tricky topic of ending an employment relationship.

What's legal?

The law says that you may terminate for any reason unless limited by Employment Law, Human Rights Code or the Employment Contract.

Terminating with Just Cause

If terminating for Just Cause, consider the following:

• What is the nature and extent of misconduct?

• Consider the surrounding circumstances

• Is dismissal a proportional response?

If terminating due to poor performance, have you:

• Investigated?

• Had the employee explain?

• Set realistic targets?

• Advised the employee of the problem?

• Given appropriate enough time to improve?

What is Constructive Dismissal?

When you unilaterally change fundamental terms of employment AND you do not give a reasonable amount of notice. Not every change is Constructive Dismissal, but examples include demotion, changing wages/benefits to less than before, having the employee change geographical location, providing biased performance reviews or creating a poisoned atmosphere.

Termination without Cause

You must provide working notice or pay/benefits in lieu of notice. If paying in lieu, the severance needs to be at least what that person would have earned during their notice period. (Note: if giving lieu of notice, CPP and EI do not need to be deducted.)

The amount of notice varies from case to case. Take in to consideration Employment Law, Contractual Notice Provisions and Common Law.

Best practices

We mentioned before that terminating someone can be tricky so one of the best things you can do to avoid common pitfalls is to specify notice entitlements in the written contract. This way, both parties can assess fairness before employment is agreed upon, minimizing the cost of disputes later.

When hiring, avoid exaggerating what you can do for the individual to make the job tempting; keep only to the written material/documents.

If a probation period isn't outlined in the Employment Agreement the employer could be obligated to pay reasonable notice under Common Law.

Should I give Working Notice, or have Salary Continuance or just pay a Lump Sum?

Working Notice

• Easier to find a job if you currently have a job

• Get the value you are paying for

• TRUST is essential

• Not the best option if terminating for cause (undermines the case)

Salary Continuance

• Define the criteria

• Pay 50% of whatever is left on their notice period once they find re-employment (gives incentive to find work)

• Maintains loyalty

Lump Sum

• Should be discounted from what the Salary Continuance would have been (similar to how the courts would consider reasonable)

• Severs the relationship

For all the above, the employee may accept a lower payment if it's paid in a form that isn't taxable (RRSP contributions, Legal fees, Human Rights damages etc.)

If cancelling benefits

• Consider offering long-term disability coverage for a short period

Obligations

• Pay all outstanding wages and vacation within 48 hours

• Provide ROE within 5 working days

• No need to provide a letter of reference; however bear in mind that this may be the only thing the employee was looking for-recognition and something to help get another job

Recommendations

• As part of obtaining the release (payment in exchange of the employee's agreement to not take legal action), go through the restrictions (non-competition, non-solicitation and confidentiality provisions). Note: for a release to be valid, it needs to exceed the Employment Law requirements

Related Articles
  You and Your SEO Content Writer - 5 Reasons You Should Break Up
  Employers: Embrace the part time/ interim work force
  4 Tips for Developing an Employee Handbook
  The Only Way To Have Real Employment Security
  Six Traits Needed for Self Employment
  How do I determine if a business of my size is covered by the EEO laws
  Numbers Show Employment Franchises Won't Slow Down
  Firing a Client: Two Different Types of Female Entrepreneurs and How They Handle Breaking it Off
  Cinderella and Passive Behavior
  Employment Security And The Future Of You
  7.5.5 Vocationalising the school curriculum: Institutional design and capacity building
  Managing Your Emotions after a Layoff
  4.1.1 Survival enterprises: The demand for training
  Am I in a Healthy Relationship?
  Employee vs. Independent Contractor - How to Correctly Classify Workers and Avoid IRS Employment Tax Audits
  Making Your Event Count!
  Be a Change Management Rocket Scientist
  Realizing and Breaking your "Glass Ceiling" - Part 2
  Top 10 List to Avoid Litigation
  Are you an Employee or a Self Employed Individual ?

Article Tags: employment relationship, hr law, human resources consultants, job



Related Forum Posts
Re: What to avoid when cold calling? - While cold calling one must be be clear with what he/she is saying and must be ready with as much possible reasons as he/she could about the product or the services he is talking about. 1. Breaking while talking in between which mostly takes place because of lack of knowledge of the product and confidence 2. One must never think negative and keep trying along with professional tone 3. It has been reported many times that because of not getting sales even after trying many times frustration occurs which also should be avoided 4. One must not talk to make sale but to create a relationship, this must be in mind in order to the sales to follow
Working with suppliers - Hi Mary, There are a lot of small buisness out there that might be willing to work with you and sometimes you can find them through the networking groups that are around. Post your needs on forums that are relevant to your business and you might be surprised. Perhaps put a wanted post on a site like craigslist, or freetouse sites, etc. Now I don't know if this site allows but you could maybe ask Evan or one of the other moderators to see if you could post asking what you need. I would look into the schools that offer self-employment programs because there may be someone that is starting a buisness with the supplies that you need and they would welcome your business. There is the YMCA self-employment program you can call them, Microskills is another place that offers a self-employment program which is especially geared to women. You might also remind your suppliers that you are investing money into their organization and that you may also bring in new clients if you are happy with their services. Do they really want to turn down your business? This of course you would do with tact.
Re: BEFORE YOU DO! - One of the things I learnt about the book "BEFORE YOU DO" is that for every biz to succeed, relationship must be solid. I have to make decision on what type of relationship do I want to keep to make my biz and life move forward. The author explained that everything about our lives deal with relationship. And whatever way we handle our relationship will determine how we will grow in our entrepreneurship and life. This book is worth reading for everyone. cheers!
Re: Help Make my business a Million Dollar Business- Update - J Bunion, The goal is to get as many women business owners to sign up and register and hopefully win some of the rewards. Would you endorse me in the race? Why not help a counterpart in the criminal justice field? You mention that you have students, I know that they will be looking for employment in the area of criminal justice. I have various contacts in the field and could possibly help them with employment, training and obtain a security clearance. Let's make this a win/win situation for all. I will also submit your question to the board. Diane
long-term relationship - I think most people are happy with attorneys when they have a long-term relationship. Intellectual property really benefits from this type of relationship.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

The True Cost of Employee Turnover

Why Your Own Internet Marketing Website Is A Must

Steps For Starting A Small Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.