It’s always difficult to terminate an employee, but you can make the task a little easier by knowing how to properly do it. According to the Ontario Ministry of Labour, there are very specific things you must do to properly terminate an employee, and although the Ministry of Labour can’t soothe the uncomfortable feelings when you terminate an employee, you can reduce your liability when you follow ESA guidelines.
Length of Employment
According to the Ontario Ministry of Labour, an employer is legally required to provide an employee with a written notice of termination and termination pay if the employee has been continuously employed for three months or longer. Take care to follow proper procedures when you terminate an employee who has served you for at least three months.
If you need to terminate an employee who has been with you for more than three months, you must provide the employee with a termination notice. This notice must be in writing, addressed to the employee, and provided to him or her in person, by mail, by fax or email, by courier, or left in a sealed envelope at the employee’s place of residence with a person who appears to be at least 16 years of age.
Statutory Notice Period
The purpose of the statutory notice period is to give the employee time to find a new job before you terminate his or her income. The statutory notice period begins on the day you give the termination notice to your employee, and its length depends upon the employee’s length of employment at your company. Following is a table outlining the statutory minimums according to the ESA:
|Length of Employment||Minimum Notice Required|
|Under 3 months||None|
|3 months to under 1 year||1 week|
|1 year to under 3 years||2 weeks|
|3 years to under 4 years||3 weeks|
|4 years to under 5 years||4 weeks|
|5 years to under 6 years||5 weeks|
|6 years to under 7 years||6 weeks|
|7 years to under 8 years||7 weeks|
|8 years or more||8 weeks|
It’s important to realize that when you terminate an employee, you may be obligated by common law notice to offer more than the minimum notice as described above. Common law notice is based on factors such as the employee’s position at your company, length of service, and even the employee’s age. It’s wise to consult an expert about whether or not you owe more than the minimum notice as prescribed by the ESA.
Termination Pay and Severance Pay
Severance pay is not the same as termination pay, according to the Ontario Ministry of Labour. Termination pay is given in lieu of the required notice of termination of employment. In other words, instead of giving five weeks of notice to an employee who has served you for five years, you can pay the person five weeks of salary.
Severance pay, on the other hand, compensates an employee for “loss of seniority and the value of firm-specific skills and recognizes his or her long service.”
When you terminate an employee, it’s important that you take care of these minimum requirements. It’s possible, however, that a judge could rule that an employee has greater entitlements under the common law. The Ministry of Labour points out that “the fact that the employer has provided notice of termination or termination pay and severance pay in accordance with the ESA does not mean that the employee could no longer sue for wrongful dismissal.”
Therefore, it’s wise to seek professional advice when you terminate an employee.