Myth, fabrication and tomfoolery: the stuff of life and law. It seems the more dismissal law becomes part of everyday experience, the more misapprehension exists between employees and employers. Here are a few of the more common ones:
A fired employee is entitled to one month’s severance for each year of service. That is not correct. An employee is “entitled” to no more than employment standards minimum severance, just a few weeks pay for most workers. A fired employee cannot sue for more unless, despite her best efforts, she remains unemployed beyond that time.
No matter how many years worked or assiduous that work, and no matter how “unjust” the dismissal, employers can get off virtually scot-free if a fired employee is re-employed in a comparable position or the court finds s/he could have been. And even if an employee remains interminably unemployed, there is no judicial formula.
Length of service is only one of many factors used to determine severance, including age, status, remuneration and re-employability. Many employees get more than one month for each year; but even more get less.
An employee cannot be discriminated against. That, too, is incorrect. You can hire or fire employees based on their looks, their approach to life, their personality, their height or even whether they wear lipstick.
What you cannot do is discriminate against them based on one of a few factors delineated in statutes like the Human Rights Code - race, gender, sexual orientation, colour or national origin. Everything else is open season. It’s hardly a secret, and it’s a statistical fact, that good looking employees, as well as those with British accents, earn more than most of the other workers.
Those who work hard are entitled to promotions or salary increases relative to weaker workers. In fact, employers have the right to be wrong or capricious. They can withhold salary increases from the meritorious and reward the laggards.
A strong performer of unimpeachable character and conduct cannot be fired. There need be no cause at all to fire an employee. There is also no appeal mechanism and a court lacks the power to reinstate employees. If an employer improperly evaluates an employee or believes a false allegation, that employee has no recourse when dismissed, other than appropriate severance.
For that matter, if the employer fires an employee by drawing her name out of a hat, as long as she is paid proper severance, she has no other recourse. Even more infuriating, severance entitlement is no greater than that of a mediocre performer.
A worker who is told to work out severance instead of receiving the money can refuse. If a worker refuses to work during the notice period, he is treated as having resigned. One of the most underutilized weapons in an employer’s arsenal is working notice. That is, if an employee is told he is to be terminated six months from that date, it is legally equivalent to dismissing him on the spot and paying six months severance.
Employers tend to be uncomfortable with this option, but not half as much as the fired employee is, after all he or she is working away the severance. Often it leads to a reduced offer of severance. But even if that is not the case, the employer is getting value for its severance dollar.
Working out a severance does not work for everyone, especially employees with access to confidential information or considerable customer contact.
A properly drafted non-competition covenant can keep a dismissed employee out of his industry for a year. Only very rarely is this the case. Few non-competition covenants of any length are enforceable because of a series of recent cases.
Such contracts only bind fiduciary employees with significant ability to damage the employer that would be approached by customers and employees even if they did not approach them. And even those employees likely could not be restricted from their industry for more than six months. With respect to the other 98% of employees, non-competition covenants are unenforceable.
Contracts limited to restricting former employees from soliciting customers or other employees, if limited to 12 months or less and restricted to the narrow geographical area in which they worked, are much more likely to be enforceable.