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Termination

Notice

Are employers required to give notice of termination?

The Canada Labour Code provides that employers must provide at least two weeks’ notice or pay in lieu of notice to employees with more than three months of employment, unless the employer has just cause. Severance pay is also required for employees with more than one year of service. Severance pay is calculated on the basis of two days’ pay per year of service, with a minimum of five days’ pay. In addition, common law principles apply. Employees may be entitled, at common law, to reasonable notice or compensation in lieu of notice which may significantly exceed their minimum statutory entitlements. For these purposes, reasonable notice is determined based on service, age, character of employment and the availability of alternative employment. The employer and employee may agree, by written contract, to an express termination provision, as long as it is not less than the statutory minimum requirements.

Redundancies

What are the rules that govern redundancy procedures?

Layoffs which are more than temporary may constitute termination of employment for the purposes of the Canada Labour Code. For non-union employees, any layoff may be considered to be a termination of employment unless the employee’s employment contract specifically allows for temporary lay-offs. 

Are there particular rules for collective redundancies/mass layoffs?

The Canada Labour Code requires an employer to provide notice to the government and a trade union that represents affected employees and post notices in the workplace if it intends to terminate 50 or more employees in a four-week period or less. Notice must be provided at least 16 weeks before the date on which the first employee’s employment will be terminated.

Employers may be required to establish a joint planning committee which includes employee representatives. The purpose of the committee is either to eliminate the need for termination or minimise the impact of the termination on employees and assist those employees in obtaining other employment.

Protections

What protections do employees have on dismissal?

Non-union employees are entitled to notice of termination and, in some cases, severance pay. Non-union employees who are not managers and who have at least one year of employment are protected against unjust dismissal. Employees cannot be terminated based on any of the prohibited grounds of discrimination under the Human Rights Act. They are also protected by the Canada Labour Code if they take various forms of leave – pregnancy and parental leave being the most common. In general, unionised employees can be laid off only for lack of work or dismissed for just cause. 

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