I strongly recommend that employers require all new employees to sign an employment contract with a termination clause. As a result, the employer knows how much it will cost to terminate the employee and the employee is effectively precluded from commencing a wrongful dismissal claim.
To read more about the benefits of using employment contracts, click here.
This kind of termination clause does not however prevent an employee from claiming for additional termination pay under the Ontario Human Rights Code (the “Code”). To read a recent court case on this issue, click here.
Cases like this illustrate why I canvass all of the circumstances surrounding a proposed termination with a client before advising on the employee’s legal entitlements.
Is the employee pregnant, or has she recently returned from a pregnancy leave?
Has the employee recently taken time off work because of a disability or recently returned to work following a workplace accident?
Is the person trans gendered and has recently decided to present in a different gender?
If a factor in the employer’s decision to terminate a person’s employment is her pregnancy or because she is disabled or trans gendered then there likely has been a violation of the Code.
Lessons to be learned
1. Insist that all new hires sign an employment contract with a properly drafted termination clause.
2. If a person is terminated because of one (or more) of the 16 personal characteristics set out in the Code such as gender then there is likely a violation of the Code and the employee is likely entitled to more termination pay than set out in the termination clause of her employment contract.
3. Call an employment lawyer and explain all of the circumstances surrounding a termination before terminating the employee’s employment.
For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
The issue of whether a termination clause limits an employee’s entitlement to the minimum notice set out in the Employment Standards Act may be the most litigated issue in employment law over the past 5 years.
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When speaking with a client about other terms of employment that can be included in an employment contract, I always ask whether the organization has an Employee Handbook.