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Terminating Staff Properly (So You Don’t Get Sued!)

By November 8, 2013June 27th, 2023Employment Law

The best way to terminate a team member is the way that leads to you not getting sued. So how can you get sued, you ask? Let’s take a look at a few ways, shall we?

1. Lack of Notice of Payment in Lieu of Notice

An employee may elect to complain to the Labour Relations Board on the basis that you haven’t given then sufficient notice, as required by the Employment Standards Act, 2000. This Act provides a minimum standard that an employer must abide by and cannot contract out of. One of those minimum standards is the minimum amount of time (generally one week of notice per year of service up to a maximum of 8 weeks of notice). It’s free for an employee to complain, and the Labour Relations Board may conduct an investigation and make a ruling. The employer dentist will likely need to review all the details of the employee’s employment (when they started, their pay for a regular work week, etc.). This may cost the employer dentist money, particularly if they want to defend themselves. An employer can try to dispute the former employee’s claim by arguing that they were terminated for JUST CAUSE and should therefore not be entitled to notice.

Lesson: So if you are going to terminate someone, either give them written notice and have them sign, date and acknowledge that they’ve received that notice OR pay them their notice (so you don’t have to keep them at the office) but make sure they acknowledge having received it. You’ll also want to get a comprehensive employee settlement and release agreement in place to defend against future claims (discussed below).

2. Try to avoid Just Cause Terminations

JUST CAUSE means that the employer terminated the employee for a good reason (they stole, committed fraud, were insubordinate, etc.). JUST CAUSE terminations are not generally recommended if you’re an employer because, unless they are egregious and involve a large paper trail, it becomes a he-said / she-said dispute in an open forum. And it’s very expensive for the employer dentist to defend against.

Lesson: if you don’t have a paper trail, avoid terminating someone for JUST CAUSE. It’s generally less expensive and less of a headache to terminate them by giving them notice.

3. Constructive Dismissal

I’ve written about this quite extensively in our eBook (which you can request for free from us). Basically, if the employer unilaterally (i.e. without the employee’s input or agreement) alters a fundamental aspect of the employment relationship with the employee without giving the employee sufficient notice or payment in lieu thereof, then the employee could claim that they have been constructively dismissed and sue for damages (based on lack of reasonable notice).

Lesson: once again, if you want to terminate someone, you give them proper notice before changing anything fundamental.

4. Avoid Being Heavy Handed when Terminating Staff

Worth mentioning is that you want to terminate the employee in a manner that doesn’t add any unnecessary strain to the already difficult situation. Mocking, yelling at, or embarrassing the employee associate while they are being terminated is not a good idea. It could lead to a lawsuit for punitive damages.

Lesson: be polite, professional, and courteous to your staff when you are terminating them. Don’t pressure them into signing something (otherwise, it could be invalidated later on). But you don’t need to explain everything to them. If they want, they can get their own lawyer to do so (on their dollar). But don’t offer to explain what’s happening, what their rights and entitlements are, etc. At the same time, don’t be harsh, rude, or heavy-handed. Seek professional help if you need it.

5. Avoid Human Rights Complaints

Also, you’ll want to be mindful of the fact that the Ontario Human Rights Code prohibits you from discriminating against an employee because of their sex, ethnicity, physical disability, religion, etc. Just keep this in mind! If you’re going to terminate on the basis of one of these prohibited grounds, you may end up before the Ontario Human Rights Commission and may need to pay more than you bargained for (as damages)! By the way, just like with complaints to the Labour Relations Board, complaints to the Ontario Human Rights Commission can be made for FREE.

Lesson: don’t terminate someone because of one or more of the reasons listed above (which is against the law!). If they leave, they might allege one or more of these things, so it’s best to have a comprehensive employee settlement and release agreement in place to avoid these claims from being brought in the future.

6. Check the Contract

First, you’d better have an employment agreement in place with all your staff. And that agreement had better say that you can terminate them by giving them what they’re owed under the Employment Standards Act, 2000 and not under the common law (which is generally one month per every year they’ve worked there). By doing so, you can potentially avoid paying a 20-year employee 20 months of notice (by giving them just eight weeks of notice under the Act).

Lesson: have written employment agreements in place!

7. Check the Agreements of Purchase and Sale

If you’ve acquired a practice with employees, you’ll want to confirm how employees were to be dealt with. Did you simply inherit them in an asset/share sale? Were they terminated prior to the closing date and given notice or payment in lieu thereof? Did they provide written releases prior to you purchasing the practice? Did you assume all termination costs immediately after the closing (or was it to be borne by the Vendor for a set period of time and then split between the Vendor and the Purchaser for a set period of time thereafter?). By understanding what happened to these employees when you acquired the practice, you can understand the length of notice that you’re faced with. If it’s a 20-year employee who you acquired last year, then you could either be faced with paying about 20 months of notice under the common law or 8 weeks of notice under the Employment Standards Act, 2000; if it’s a 20-year employee who was terminated prior to you acquiring the practice, then you could either be faced with paying about 1 month of notice under the common law or 1 week of notice under the Employment Standards Act, 2000. Get my point?

Lesson: check the agreement of purchase and sale to determine how employee liabilities were to be dealt with (particularly termination costs and carrying over of length of service after the closing date).


The Content of this post is provided for informational purposes only. It is not intended to be legal, financial, tax, or other professional advice of any kind. You are advised to contact DMC (or other counsel) to seek specific legal advice concerning your individual situation.