Preparing for Termination
R. Mark Fletcher
Grosman, Grosman & Gale LLP
© Leader Quest Inc. and R. Mark Fletcher
No employee or employer is immune from having to face the difficult reality associated with terminating the employment relationship. The prudent employee and employer will take steps to prepare themselves and their organizations for the termination of the employment relationship to ensure that they are adequately protected from a legal standpoint. Employees and employers often neglect to plan for the termination of the employment relationship. This is not surprising given that people tend to shy away from planning for unpleasant and stressful life events. The Canadian workplace has become increasingly fast-paced and employee turnover is frequent. A failure to plan ahead and to properly position oneself can lead to unfortunate consequences.
For Employees: Top 5 Things To Consider If You Are About To Be Fired
(1) Protect Your Access To Key Documents and Start Asking Questions
A prudent employee will ensure that important documents such as their employment contract, performance reviews and other key documents are kept in a safe place so that he or she will have access to these in the event that their employment is terminated. Such documents are of critical importance to the employee should severance negotiations or legal proceedings arise. Copies of important documents should be stored at home or in some other protected location.
In addition, an employee who believes that their employment is about to be terminated will probably be anxious and uncertain about their future with the employer. If an employee’s instincts lead him or her to believe that he or she is about to be fired, the individual should seek information about the situation by attempting to speak with either his or her manager or a human resources manager and ask questions in order to gain a better understanding of the situation. Having a discussion with management will open the lines of communication from the employee’s end and give the employer an opportunity to either alleviate the employee’s fears and concerns or give the employee a better understanding of their future within the organization.
(2) Start Documenting
In preparing for their own termination, it is advisable for an employee to create a paper trail to protect their legal position should litigation arise following the termination of the employment relationship. For instance, if the employer is alleging poor performance, the employee should respond to those allegations in writing demonstrating that he or she disagrees with the employer’s performance concerns. Moreover, the employee’s written response will demonstrate that he or she did not accept the employer’s criticisms.
A paper trail is particularly useful in cases where the employer has attempted to unilaterally change the terms of the employee’s employment. Where the employee has communicated his or her disagreement with changes unilaterally imposed by the employer, it will be difficult for the employer to argue that the employee condoned the new terms of employment. It is also important for the employee to keep detailed records of meetings and conversations with co-workers and management. In some cases, the employee should confirm meetings and conversations in writing to co-workers and management. The paper trail can be useful evidence for the employee if the employer has a different perspective on facts or events or where credibility is in issue should a termination lead to litigation between the parties.
The employee should ensure that his or her communications remain professional and business-like, always bearing in mind that these communications may be put in front of a third party decision maker in the future.
(3) Start a Job Search
If you are about to lose your job it makes good sense to start searching for alternate employment at the earliest moment. From a legal standpoint, an employee whose employment has been terminated has a legal obligation to mitigate his or her damages arising from losing his or her job. In addition, employees are often in a better position to secure alternate employment while they are currently employed. Employees should be cautious about looking for alternate work on the employer’s time and should restrict the search for alternate employment to times when they are not at work.
(4) Don’t Sign Anything
An employee who feels that the termination of their employment is imminent should be very cautious about signing any documents provided by their employer. If, for instance, the employer asks the employee to sign a performance review and the employee disagrees with its contents, the employee should be careful not to sign the document if doing so would indicate their acceptance or agreement with the contents of the performance review. Similarly, if the employee is offered a severance package by their employer he or she should be careful to not sign anything before he or she has had a chance to consider the offer and to obtain independent legal and financial advice on the terms presented by the employer.
(5) Consult with an Employment Lawyer
The prudent employee will arrange to meet with an employment lawyer at the first sign of trouble in their employment relationship. An employment lawyer can assist the employee in understanding their legal position and how to best manage their situation and to protect their legal interests. An employment lawyer will also be in a position to intervene at the appropriate time and commence negotiations with the employer to enhance a severance package offer. If the employee and employer cannot reach a fair and reasonable settlement amicably, an employment lawyer will be able to advise the employee on various legal remedies that may be available in their particular situation.
For Employers: Top 5 Things To Consider Before Terminating an Employee’s Employment
(1) Marshall all Relevant Documentation Relating to the Employee
Employers should ensure that they have assembled all appropriate and relevant documentation pertaining to the employee’s employment history in advance of the termination. The employer’s legal counsel will want to review any relevant documentation such as an employment contract, salary and length of service information, employee attendance records, and employee performance reviews prior to providing advice in relation to the termination.
Similarly, the employer should have a well-documented file on the employee, particularly where the employer intends to allege just cause as the basis for the employee’s termination. If, for instance, the employer alleges that the employee failed to perform his or her duties in accordance with organization standards, the employer should have a well-documented file that demonstrates the employer advised the employee in writing of its concerns and provided the employee with a fair and reasonable opportunity to improve their performance.
An Employer should create a paper trail of their own leading up to the termination of employment. The contents of meetings between the employee and employer should be confirmed in writing to the employee. Any performance improvement objectives or probationary terms should also be communicated in writing. It will be more difficult for an employee to convince a judge that they didn’t understand certain objectives or the employer’s performance concerns where those objectives and concerns were clearly communicated to the employee in writing.
(2) Where Employee Impropriety is Alleged
In cases where the employer intends to terminate the employee’s employment on the basis of impropriety such as theft, fraud, dishonesty or some other form of misconduct, the employer should ensure that a fair and thorough investigation is conducted into the employee’s alleged improprieties. If an employer intends to rely on the doctrine of just cause, it must have compelling evidence to substantiate its allegations of wrongdoing. Moreover, the employer is required to provide the employee with an opportunity to respond to the allegations given the potential for serious negative repercussions for both the employee’s reputation and future employment prospects.
(3) Develop a Fair and Reasonable Severance Package
If the employer does not have just cause to terminate the employee’s employment and there is no employment contract, which governs the employee’s entitlement on termination, the employer should carefully consider the compensation to be offered to the employee. As part of this process, the employer must consider whether the employee will be provided with working notice or pay in lieu of notice which often depend on the circumstances surrounding the termination of employment and whether or not the employee would present any risks to the employer should they remain employed during a working notice. Legal advice on these matters is essential.
The employer should also develop a plan to protect the organization's assets such as intellectual property or physical property to which the employee may have access. The employer should insist on the return of all organization property and provide a list of items that are to be returned, including any confidential information that may be in the employee’s possession. The employer should also consider what protocol is to be followed by the employee to ensure the safe return of this property.
In addition, the prudent employer will also contact its third party insurance providers to ensure that the employee’s premiums have been paid up to date and that there will be no problems with continuing insurance coverage during the reasonable notice or severance period. If appropriate coverage for health benefits and disability insurance is not in place, the employer runs the risk of becoming the employee’s insurance provider. This is also the time that an employer should determine whether there are any risks separate and apart from severance liability such as any potential human rights concerns or other aggravating factors, which may lead to increased liability.
(4) Plan for the Termination Meeting
The termination interview is one of the most difficult aspects of the termination process. An employer should take steps to ensure that the termination interview is conducted in a business-like manner. Employers should also ensure that the termination interview is conducted privately to minimize the potential for employee embarrassment. The termination interview should be conducted sensitively and in a humane manner. Although the employer is not obligated to provide the employee with reasons for termination if the employee is terminated on a without cause basis, it may be less difficult for the employee to accept the termination of their employment when reasons are provided such as in cases where the termination arises from a restructuring.
Employers should avoid dwelling on performance issues in the termination meeting and should offer the employee a positive letter of reference without attaching any conditions to the provision of such a letter where the employee is being terminated on a without cause basis. It is in the employer’s best interests that the employee obtain alternate employment as soon as possible following the termination since any income earned by the employee in alternate employment will mitigate the employee’s losses and thereby reduce the employer’s liability for damages.
(5) Get Legal Advice Prior to the Termination of the Employee’s Employment
Employers should consult with an employment lawyer prior to terminating an employee’s employment to canvass issues such as liability and other legal risk factors. An employment lawyer will be able to provide the employer with a sophisticated sense of what the risks are and how to minimize the costs and expense associated with a difficult termination.
Concluding Comments
Both employees and employers should bear in mind that they have a reputation to uphold. It is important for both the employee and employer to remain professional at all times, even when dealing with the stress and anxiety of an employee termination. It is, for the most part, in everyone’s best interest to approach the termination of employment with the future in mind. While losing a job or having to terminate an individual’s employment can be stressful and difficult, the well-prepared employee and employer can minimize the problems that can arise from employee terminations if they are well positioned and properly advised before the point of termination is reached.
This article may be reproduced for distribution as a learning tool for organizations in the not-for-profit sector provided attribution is made to R. Mark Fletcher, LL.B. of Grosman, Grosman & Gale LLP, Toronto; and to Leader Quest Inc.
This article contains material of general interest only and is not intended to provide legal advice or to replace a consultation with a legal professional on any particular matter. R. Mark Fletcher can be reached at mfletcher@grosman.com or 416-364-9599.