Handling employee terminations: Practical guidance for without-cause dismissals in Canada
When terminating a non-unionized employee without cause, employers may still be tempted to tell the employee in the termination meeting the reasons why they are being let go, such as poor performance, bad attitude, etc. However, when terminating an employee without cause, it is generally best practice for employers to keep the reasons for termination high level, and to not get into the weeds of the “why” — but this can be easier said than done.
Termination for cause vs. without cause
Canadian employees can be terminated in two main ways: with just cause and without cause. If an employee is terminated “with cause” that means that they have engaged in serious acts of misconduct that make it impossible for the employment relationship to continue. The bar for establishing cause is very high, and the onus is on the employer to show that the reasons for the termination exist. Employees who are terminated for cause are not entitled to common law reasonable notice of their termination.
Conversely, an employee can be terminated without cause as long as the employer provides them with the required notice of their termination under employment standards legislation, common law, and their contract. An employer can terminate an employee without cause for any reason, as long as the reasons are not unlawful, such as being discriminatory under human rights legislation or reprisal against employees exercising their workplace rights.
Should you tell employees why they are being terminated?
If you are terminating an employee with cause, you need to provide the reason, and should also be collecting evidence and documenting proof of the employee’s misconduct, as they are very likely to challenge the reasons for their termination for cause.
If you are terminating an employee without cause, this becomes a more nuanced answer. Here are some tips for navigating termination meetings with employees, and how to address (or not address!) the reasons why they are being terminated.
- Focus on “without cause”: Employees will often, understandably, take the news of their termination personally. As much as you can, emphasize that it is a without-cause termination, that it was a difficult decision and that the company desires an amicable resolution.
- If there are objective business reasons, rely on those: Is the company going through a downsizing, restructuring, or financial difficulties? If there are reasons for the employee’s termination that are not personal to them, highlight those, and this may soften the blow and help the employee understand why this is happening.
- If it is personal, keep it high level: If the employee is being terminated because they aren’t a good fit for the role, haven’t been meeting performance expectations, or other similar reasons, these can be the most difficult termination conversations to navigate. Going into detail about an employee’s poor performance in a termination meeting can make the employee feel defensive, exacerbate an already emotional situation, and devolve into an argument. Do not get pulled into a debate about “why” the employee was terminated. No employee will be satisfied with the answer, and ultimately, it doesn’t matter. An employer is legally permitted to fire without cause if they pay out a sufficient package that complies with the employment contract and the law.
- Protect against discrimination claims: Even if you should not tell employees the reasons they are being terminated, it is a best practice to keep a record of the reasons and the decision-making process that was used to decide to terminate an employee. If an employee feels they were terminated for a discriminatory reason (i.e., because of their gender, race, disability, family status, etc.), it will be crucial for the employer to be able to show that the employee’s identity was not a factor in the decision to terminate their employment.
Never lie: Above all, never be dishonest with employees about the reasons they are being let go. Not only is this unkind and adding insult to injury, but it could open employers up to potential bad faith damages if the employee brings a wrongful dismissal claim. You may use plenty of euphemisms and platitudes, but always be honest.
By Lexa Cutler
