Termination Management

Employee termination should only be considered after all other efforts to bring the employee back to acceptable performance have been exhausted. Once the decision is made to terminate, however, it is critical for both the company and the employee that it be handled effectively. Following the company’s Termination of Employment policy you should:

1) Calculate the amount of severance pay, termination pay or pay in lieu of notice. Check the applicable provincial employment laws which will detail the legal minimum amounts. If unsure, we advise you to consult an employment lawyer.

2) Compare the statutory minimums to legally accepted agreements reached in the courts, in similar circumstances, if possible. Once again, a lawyer can be of assistance if needed.

3) Decide whether you want to provide the terminated employee with some level of Career Transition/Outplacement Service. Please refer to TwoGreySuits Career Transition/Outplacement Program in the Guides section below.

4) If you are going to enhance the severance package beyond the statutory minimums get a signed Legal Release Document from the terminated employee, which essentially states that the employee relinquishes their rights to take legal action against the employer for wrongful dismissal.

5) Prepare the Termination Letter.

6) Conduct the termination meeting as per the instructions in the policy.

7) Consider paying the severance package in the form of salary continuance. The reason severance is paid is primarily to mitigate damages as the terminated employee seeks other employment. Employers rationalize that salary continuance meets this obligation and also has the potential of being less expensive. Employers will also often offer an incentive to the ex-employee to find employment faster by offering a portion of the remaining severance as a bonus if employment is secured before the severance payments run out.

8) Communicate to the employees remaining to discourage any unnecessary gossip and unproductive or speculative statements about the employment termination.

9) If possible, complete an exit interview with employees who have resigned voluntarily. It’s amazing what can be learned from someone who can speak candidly without fear of reprisal. NB: If you are terminating an employee “for cause”, termination is immediate and no severance pay is payable. It is important in these cases to seek legal counsel to ensure that your decision will stand the test of a possible court challenge.