We've said it before and we'll say it again: the best way to avoid litigation when terminating an employee is to agree on what it will take to terminate an employee BEFORE they start work. In our last Atlantic Employers' Counsel we reviewed top just cause issues (i.e., theft, dishonesty, sexual harassment, etc.) and, as you know from reading those articles, if there's just cause, an employee isn't entitled to reasonable notice. However, whether or not there's just cause may require defending a wrongful dismissal claim and, if you can't prove just cause at court, the court will decide what "reasonable notice" is. When terminating an employee, whether you believe you have just cause to dismiss or not, you may want to consider whether settling the matter in exchange for a complete release will achieve your goal with less risk. So, where does one start when it comes to proposing settlement? Whether you're agreeing on what it's going to take to terminate from the outset or when the honeymoon is over, you must know what the minimum employment standards are in your jurisdiction before you start.
Atlantic Canada statutory notice periods
Each province has legislation that provides mandatory minimum notice periods for individual employees dismissing without cause. Notice periods vary and depend on the length of service of the individual employee. For the purpose of this article, we are looking at the requirements when terminating an individual employee. Note that different provisions may apply when terminating a group of employees such as "mass layoffs".
Click here to view table.
Section 71 of Nova Scotia's Labour Standards Code (often called the "ten year rule") provides that an employee who has a period of employment of 10 years or more can't be discharged or suspended without just cause and there's an added risk that the Tribunal may reinstate:
71 (1) Where the period of employment of an employee with an employer is ten years or more, the employer shall not discharge or suspend that employee without just cause unless that employee is a person within the meaning of person as used in clause (d), (e), (f), (g), (h) or (i) of subsection (3) of Section 72.
It's important to emphasize that statutory notice periods are minimum notice periods only and, in most cases, won't satisfy the common law requirement of reasonable notice (in the event that there is no written contract of employment).
Recent common law notice periods
Although reasonable notice periods depend on the facts of each particular case, the seminal case of Bardal v. Globe & Mail Ltd. sets out what courts consider when assessing notice: character of employment, length of service, employee's age and the availability of similar employment given the employee's experience, training and qualifications. These factors, commonly referred to as Bardal factors, aren't exhaustive or exact but are helpful in determining a general range of reasonable notice employees are likely entitled to. The Bardal factors are generally recognized in the Atlantic Provinces, although courts in New Brunswick give little consideration to the character of employment. The following are examples of what courts in Nova Scotia and New Brunswick have recently awarded as reasonable notice.
Click here to view table.
What this means for you
Determining whether just cause exists is critical to determining your termination strategy. If it does exist, concentrate on making your case at court. If you're not convinced there's just cause and you don't have a termination clause in the employment contract, don't overlook statutory notice obligations in your settlement strategy. Always remember that statutory notice periods are the "floor", whereas reasonable notice periods are the "ceiling". Often statutory notice combined with some other amount measured by weeks or months will be sufficient to obtain your goal – permanent separation and a binding release. With knowledge of relevant statutory notice and the common law, you can negotiate with your best foot forward and don't forget: ALWAYS get a release once you agree to agree!