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Employment Law | Wrongful Dismissal

A employee can either be terminated from their employment "with cause" or "without cause". If an employee has committed a serious breach of their express or implied terms of employment, then depending upon the nature of the breach, the law may entitle the employer to terminate the employment without any advance notice or pay in lieu of notice. An extreme example would be if an employee was caught stealing company funds. In other cases where an employer is dissatisfied with an employee, it may be less clear as to whether an employer is entitled to terminate without notice. Employers in doubt should consult with a lawyer practising in this area to ensure that they do not make a costly error when ending an employee's position. Likewise, an employee who has been dismissed may want to hire a lawyer to determine what his or her rights are.

Severance Pay - Pay in Lieu of Notice

If employment has been terminated without cause, then the employer will be obligated to either provide reasonable notice to the employee that their job will be ending or else give them pay in lieu of notice. In Saskatchewan, there are two measures of the amount to be paid to the employee. They are:

• Payment as required by The Labour Standards Act of Saskatchewan and its regulations (for the majority of employers); or
  
  
• For interprovincial businesses, such as trucking, rail, banking, etc, the Labour Standards Act of Canada will apply instead. This Act also has the unique ability to order that a person be reinstated to their job ... something not possible under provincial legislation.
  
  
• Payment of the amount that the courts, through development of law in Saskatchewan and Canada, have required as "pay in lieu of notice". This amount is often greater than the standards set out by provincial legislation. However, the employee in this case has a corresponding legal obligation to mitigate (minimize) their loss by seeking alternate employment. If the employee did find alternate employment or should have if a reasonable effort had been made, this can reduce the amount payable.

Rather than trying to set out the amounts required to be paid under Saskatchewan Legislation, it is simpler to refer you to the website for the Labour Standards Board of Saskatchewan. Please follow this link: Sask Labour Standards - Guide. For the Canada Labour Standards Board, follow this link: Labour Standards Canada. If an employee claims that he or she has been wrongfully dismissed and claims pay in lieu of notice, there is no set guide for the amount payable. Some people have suggested that an employee would be entitled to one month's pay for every full year of service. However, that is generally overstated in most cases. On the other hand, there can be special factors in a few cases that make the notice period much greater that this very rough rule of thumb. For example, if the CEO of a very large corporation was dismissed after only one year of service, he or she would likely be entitled to a sum far greater than one month of pay. Another example would be where an employer induced an employee to leave a secure long term position elsewhere to begin working with them. The court will also consider other factors such as the age and education of the individual and how difficult it might be to find a similar position elsewhere. It is best to hire a lawyer to help determine the amount that would be payable in any particular case.

Avoiding Mistakes

If an employee is terminated, it should be done in a considerate manner and in person. In fact, courts have sometimes awarded additional damages to an employee who was terminated in an insensitive manner given all of the circumstances.

The employer should also be cautious and seek legal advice before discontinuing the employee's health, disability or life insurance benefits. If, for example, they were terminated on the date of dismissal and a claim for the employee arose afterwards, during the reasonable notice or the statutory notice period, the employer might be responsible for the loss. If an employee's insurance coverage has been prematurely terminated, the insurance is no longer available and the court would make the employer pay whatever the insurer would have paid if not for the termination of employment.

Employers should also be aware that some group policies require the employee to be actually providing services to the employer as a condition of coverage. If an employee has been dismissed without cause, then the termination would disentitle the employee to coverage under those conditions. Any employer with a group benefits package should consult with their insurance provider to see if coverage can be extended to cover the notice period as well. They should also consider revising their employee benefits policy and employment contracts to properly cover this scenario. The loss may be relatively small if the employee only had a large dental bill during the notice period that would otherwise have been covered by the benefits package. However, if long term disability coverage was included, for example, and the employee became permanently disabled during this time, the potential liability for the employer could be devastating.

As a final note, the employer should also consider allowing the employee to have any life insurance or other insurance contracts assigned to them personally rather than terminating them. It may not always be possible and of course, the employee would have to pay the future premiums. It may be that an employee no longer qualifies for coverage and will be prejudiced if a policy could have been taken over by them but they were not given the opportunity.

I would be pleased to act for you if you need any help in this area.

Notice: The information on this website is general in nature only. It relates to Saskatchewan, Canada and may not be applicable in your jurisdiction. It does not constitute legal advice to you and no solicitor client relationship will be established. You should seek specific legal advice regarding your circumstances from a lawyer entitled to practise law in your jurisdiction.

www.rickcarlson.com | Tue, 18 Jun 2013 21:21:36 CDT1