Q: Can a non-unionized employer terminate an employee by only giving them statutory minimum entitlements?
A: It depends on whether the employee has signed a valid written employment contract that states the employee will only receive the minimum requirements under the employment standards legislation. Any employee whose employment is terminated “without cause” are legally entitled to receive the required minimum notice of termination (or pay in lieu of notice) and benefits continuance under the applicable employment standards legislation. Under Ontario and federal legislation, employees may also be entitled to statutory severance pay. Federal legislation also requires the termination of employment to not be “unjust,” providing protections similar to just cause provisions found within collective agreements in the unionized setting.
If the employee has not signed a valid contract of employment limiting his/her entitlement upon termination to the statutory minimums, or some amount greater than that, the employee may seek “reasonable notice” under the common law. Generally speaking, the common law entitlements to reasonable notice are much greater than the statutory minimums.
Q: Are terminated employees required to sign a release in favour of their employer as a condition of receiving a termination package?
A: Employees terminated without cause must receive at least the statutory minimums required under the applicable employment standards legislation (i.e., Employment Standards Act and Canada Labour Code), without signing any release. In most cases, though, an employee is asked to sign a release in exchange for receiving a severance package that is greater than the minimum statutory entitlements. Under these circumstances, it is typical for an employer to require an employee to sign a release as a condition of settlement.
Employees terminated without cause are entitled to receive at least those statutory minimums provided under the applicable employment standards legislation (i.e., Employment Standards Act, Canada Labour Code), without signing any release. In most cases, though, an employee is asked to execute a release in favour of receiving a package in excess of their minimum statutory entitlements. Under these circumstances, it is commonplace to require an employee to sign a release in favour of their employer as a condition of settlement.
When presented with a severance offer upon termination, an employee should not simply accept the employer’s claim that they are being provided with all their legal entitlements. Rather, it is wise for an employee to seek independent legal advice when their employment has been terminated.
Q: How much notice of termination, or pay in lieu of notice, is an employee entitled to?
A: This depends on many factors. First and foremost, it will depend on whether the employee has signed a valid written employment agreement that provides them with at least the statutory minimums upon termination without cause. Without such an agreement, the employee will be entitled to reasonable notice in accordance with the common law. Reasonable notice under the common law is determined by a variety of factors, including the employee’s age, position, years of service, age, education and availability of similar work.
When terminating an employee, employers should consult legal counsel to determine how much notice, or pay in lieu of notice, the employee may be entitled to under the law.