Today’s Job market
In this age of globalization and precarious employment most people change jobs many times in a career.
Changing jobs is a fact of workplace life for most people. Some people are terminated and other people voluntarily resign. Either way an employer should consider employee terminations to be a given and manage them.
Termination Clauses in Employment Contracts Are Common
One way to mange the costs associated with terminations is to require all new hires to sign an employment contract with an enforceable termination clause.
Even with an enforceable termination clause, however, some terminations can become litigious. This blog addresses three types of terminations that can become litigious.
Terminating a Pregnant Employee
Terminating an employee while she is pregnant, on pregnancy leave, or at the end of a pregnancy leave is fraught with legal danger. A person taking a pregnancy leave generally has the right to return to her job (or a comparable job if her job has been eliminated) at the end of the leave under Ontario’s Employment Standards Act. Similarly under Ontario’s Human Rights Code (the “Code”) an employer cannot discriminate against an employee because of sex which is defined to include the right to equal treatment without discrimination because a women is or may become pregnant. The Ministry of Labour and the Ontario Human Rights Tribunal (the “Tribunal”) can and have ordered employers to pay significant damages above the termination pay owing under a pregnant employee’s employment contract.
Terminating a Disabled Employee
Terminating an employee who is disabled involves navigating a legal minefield. The Code prohibits discrimination against disabled employees. The Code also requires an employer to accommodate an employee’s disability unless it results in undue hardship. The Accessibility for Ontarians with Disabilities Act imposes numerous obligations on employers. The courts and administrative tribunals like the Tribunal can and have ordered employers to pay significant damages to disabled employees who have been terminated.
Terminating an Older Employee
In 2008, mandatory retirement was abolished for most people in Ontario. In the same year the stock market crashed and many peoples net worth dropped dramatically making it more difficult to retire.
As a result, for financial (and other) reasons, many people are now working past age 65. This is causing problems in the workforce. Young people are having difficulty finding jobs, and some employers – particularly those in the manufacturing sector with physically demanding jobs – are required to address – for the first time – the physical and mental challenges that are experienced by some employees who are 70 or 75 years old.
Terminating a long-service employee who is over 55 years old can attract significant liability. This is one group of employees who often have not signed employment contracts and can be entitled up to 24 months notice of termination (or more) at common law. This kind of employee is also entitled to damages under the Code. Although an older employee is entitled to look for alternative employment to reduce wrongful dismissal damages I suspect few judges would expect a 70 year old to look very hard.
Lessons to be Learned
1. All new employees should be required to sign an employment contract with an enforceable termination clause.
2. Pregnant, disabled and older workers have special rights. It is possible to terminate these kind of employees by providing the person with notice of termination however we suggest that you consult with an employment lawyer before doing so.
For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship including employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
In the recent decision of Andros v Colliers Macaulay Nicolls Inc., the Ontario Court of Appeal (“OCA”) found yet another termination clause to be unenforceable. In this decision, the OCA reaffirmed and clarified various principles surrounding the enforceability of such clauses.
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