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Employee Termination in the Pandemic – What Employers Must Know

— November 30, 2020

Employee termination is a complex territory, but unfortunately, it is a hard truth that businesses have to live with right now.

The Canadian economy is in shambles amid the pandemic, and businesses are struggling to stay afloat. Even after the reopening orders, things are far from normal, and many provinces are contemplating a second phase of lockdown. Employee termination is becoming a common occurrence for companies, no matter how much you want to avoid them. Before you go ahead with employee termination in the pandemic, there are legal implications to understand.  It is vital to know that the legal norms may vary from jurisdiction to jurisdiction, so you must be aware of the ones in your location. Let us explain the legal implications of employee termination in Ontario. 

Reasonable notice before termination

The Ontario Employment Standards Act 2000 states that an employer needs to give an in-writing notice of termination to the employee who has been working with them for at least three months and is being fired without cause. In case they do not give reasonable notice, the employer has to pay in lieu of notice. Reasonable notice means a minimum of one week counted for every year completed by the employee with the company. It extends to a maximum of eight weeks. 

Apart from the pay in lieu of notice, employees who have worked for at least five years are entitled to severance pay. The clause applies to employers with a payroll of at least $2.5 million. Also, the companies terminating at least 50 employees within six months due to closure in full or part are covered. While you need to be aware of these norms, it is worth consulting an attorney about the reasonable notice clause in the COViD era.

Termination may be illegal

An employer has a basic right to terminate an employee for any reason as long as they are giving them reasonable notice or pay in lieu of notice, along with severance pay where applicable. Things do not change in the pandemic phase, though there are some circumstances when termination may be considered illegal. For example, you cannot fire or penalize someone for refusing to work if your premises are unsafe due to the virus.

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The recent amendment in the Ontario Employment Standards Act includes COVID-19 protections to prevent employers from terminating employees who have tested positive or are taking care of an infected person. It is best to consult a Toronto Employment Lawyer before you take an action against such an employee. Terminating them unlawfully can bring litigation, which is the last thing you would want to face right now.

Consider the legal implications of temporary layoff

When you are not keen to terminate people due to economic reasons, temporary layoffs may be a better option. The intention is to send them off for now and recall them when conditions improve. However, you can legally make temporary layoffs if the employment contract includes an agreement in writing. Moreover, there are some rules related to the length of the layoff that you need to abide by.

Employees need not set a specific recall date while they lay off the employees because the circumstances are unforeseen. But you can expect the employees to file a constructive dismissal claim if the employment contract does not include the layoff clause. Once again, an expert attorney is the best person to guide you in this context.

Employee termination is a complex territory, but unfortunately, it is a hard truth that businesses have to live with right now. It is vital to ensure that you are on the right side of the law when you are doing it so that there aren’t any legal disputes. 

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