How Do You Legally Terminate an Employee?

Terminating an employee is one of the most challenging responsibilities employers face. Done incorrectly, it can lead to costly lawsuits, damage to your business reputation, and low morale among remaining staff. Understanding the legal requirements is essential to protect both your business and the employee’s rights.

In Canada, employees are entitled to reasonable notice or pay in lieu of notice when terminated without cause. The amount depends on several factors:

• Length of employment
• Age of the employee
• Position and responsibilities
• Availability of similar employment

Important: The minimum standards set by provincial employment standards legislation are just that – minimums. Common law often requires significantly more notice or severance than the statutory minimum.

Termination without cause is the most common and safest approach. You don’t need to prove wrongdoing: you simply provide appropriate notice or severance pay.

Termination with cause means firing an employee for serious misconduct without providing severance. However, the legal bar for “cause” is extremely high. Minor issues or single incidents rarely qualify. Terminating for cause without proper grounds can result in expensive wrongful dismissal lawsuits.

Get legal advice. Our experienced employment lawyers can guide you through the termination process. 

Prepare the termination package. Include a clear termination letter outlining the last day of work, severance amount, benefits continuation, and any other entitlements.

Plan the termination meeting. Keep it brief, respectful, and professional. Have a witness be present if possible. Avoid lengthy explanations that could be used against you later.

Provide all required documentation. Give the employee their termination letter, Record of Employment (ROE), information about benefits, and details about their final pay.

Don’t make promises you can’t keep. Be careful about what you say during the termination meeting. Avoid statements that could be interpreted as admissions or additional commitments.

Underestimating severance obligations. Many employers offer only the statutory minimum, leaving them exposed to wrongful dismissal claims for much larger amounts.

Terminating for cause without a proper legal basis. If you haven’t documented performance issues and given warnings, for example, a for-cause termination likely won’t hold up.

Making it personal. Keep emotions out of it. Focus on the business decision and treat the employee with dignity.

Asking for a resignation. Pressuring an employee to resign can lead to constructive dismissal claims, which are often more expensive than straightforward termination.

Contact us for a consultation at info@pintoshekib.ca or 416.901.9984.