How to Terminate an Employee Without Cause

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Most employers have been in the following situation: they want to terminate, but the employee in question hasn’t done anything “bad” enough to be fired. Is the employer stuck waiting until they do? In BC, the answer is no. According to the BC Employment Standards Act, employers have the right to terminate without cause as long as they provide written notice or pay a severance.

Read more to learn about terminating without cause. We also invite you read about conducting the termination meeting.

 

1. What is the Difference Between Termination For Just Cause and Termination Without Cause?

When an employer terminates an employee for just cause, the employee has engaged in misconduct and breached the employment contract. Examples of misconduct include:

  • transgressing company policy or code of conduct
  • engaging in unlawful behaviour

The employer must have evidence and supporting documentation. In cases of termination with just cause, the employer does not provide severance or notice.

Conversely, termination without cause allows an employer to terminate for any reason that is not misconduct or protected by Human Rights legislation. The employer is not required to provide supporting documentation; however, they must give the employee compensation in the form of severance, written notice, or a combination of both (as per the BC Employment Standards Act):

  • One week’s pay or notice after three consecutive months of employment
  • Two weeks’ pay or notice after 12 consecutive months of employment
  • Three week’s pay or notice after 3 years of consecutive employment, plus a week’s pay or notice for every additional year up to a maximum of 8 weeks

 

2. Should an Employer Pay Severance or Give Notice?

When deciding whether to provide severance or written notice, the employer must assess the  risks of both options. With paid compensation, the severance package should be fair, if not generous. While the employer does have the right to fire, the employee also has the right to sue for wrongful dismissal. In cases where the plaintiff succeeds, the courts often award beyond what is dictated by the BC Employment Standards Act.

It is far better to offer a robust severance than to be ordered to pay an even heftier compensatory award. Employers can create an appropriate severance package by considering these factors:

  • employee’s age
  • position in the organization
  • employee’s prospects for landing a new job

Some employers will also include job placement services, employment counselling, and extended benefits for a given period.

Choosing to give written notice instead of severance can also have pitfalls.

  1. The employee may become disillusioned and unmotivated during the notice period, leading to deteriorating performance at on the job.
  2. Morale may be negatively impacted as as staff learn of the termination, spread gossip, and worry about their own job security.
  3. If the employee sustains a workplace injury during the notice period, they can claim Workers Compensation, effectively nullifying the termination. They will remain tied to the organization at additional cost to the employer.

 

3. When are Notice and Compensation Not Required?

There are some circumstances when notice and compensation are not required for terminating without cause:

  • the employee has worked for less than three consecutive months
  • the employee works on-call, was hired for a definite term, or was hired to perform specific work in 12 months or less
  • the employee quits or retires
  • it is impossible to perform the work due to an unforeseeable event or circumstance (other than bankruptcy, receivership, or insolvency)
  • the employee refuses to accept reasonable alternative employment
  • the employee is terminated for just cause

Regardless of the circumstances, terminating an employee is a complex procedure that involves many factors. There is no question that it is serious business and must be handled with meticulous care. Pivot recommends that employers thoroughly explore all of the considerations and risks before taking action.

If you would like to discuss your termination plans, please contact us today for a consultation at info@pivothrservices.ca.

This is the first of two parts in this series. Part two covers the termination meeting.

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