Stuart Ducoffe, Founder, e2r
Employment terminations are among the most difficult events brokers and employees must deal with as part of the overall employment relationship. But, if you know what to expect, the process can be less stressful on both managers and employees. It’s helpful to think of the termination process in three phases:
- Phase I — Decision to Terminate
- Phase II — Termination Meeting
- Phase III — Post Termination
- Phase I — Decision to Terminate
The first decision is whether the termination will be with cause—willful misconduct or neglect of duty for purposes of the Employment Standards Act, 2000 (“Act”) or without cause. With cause terminations are rare, so we’ll limit our discussion to terminations on a without cause basis.
If the termination is without cause, you’ll have to start by reviewing any applicable employment agreements to determine whether a severance entitlement is set out in the agreement. If yes, you must decide if you can enforce the termination provision. If the termination provision fails to meet the requirements of the Act, it’s unenforceable.
Suppose the termination provision is unenforceable or the employment agreement fails to include a termination provision. In that case, you’ll need to determine the employee’s severance or reasonable notice entitlement.
The primary factors in determining reasonable notice are the employee’s age, years of service, position, compensation, and ability to secure alternate employment.
The termination letter should typically include:
- A basic reason for the termination, although it’s often more appropriate to simply indicate, for the reasons discussed
- The terms of the severance package, including group benefit continuation
- Vacation pay entitlement
- Any benefit conversion information
- Return of property
- Release language, if applicable
Where appropriate, there should be reminder language regarding the employee’s post-termination obligations such as confidentiality and non-solicitation.
Phase II — Termination Meeting
You can end someone’s employment in person, via Zoom, or by phone call. Regardless of how you do the termination meeting, the brokerage should always have two representatives present. The discussion should be approximately five minutes.
Get right to the point by advising the employee their employment is being terminated. Assuming there’s a performance component to the reason for the termination, it’s important to remember this isn’t the time to discuss the employee’s performance.
Don’t accept the employee’s immediate sign off. Instead, ensure the employee takes a few days to consider it before signing.
Verbal Communication
When articulating the reason for the termination, there are two typical options:
- The organization is going through restructuring, and unfortunately, your role is part of the restructuring; or
- Although you have a valuable skill set, given the direction of the organization, that skill set is no longer consistent with our strategy on a go-forward basis.
Some common questions and answers during the termination meeting:
Why was I selected? “The selection process considered several factors, including job skills, work experience and organizational needs. These decisions are always difficult, but they’re final.”
How will you handle my references? Brokers are encouraged to provide former employees with an accurate reference letter highlighting the positive aspects of the former employee’s performance. Failure to do so can give rise to Court awarded additional damages. Although a policy of providing letters of employment only isn’t technically a violation of any statutory or common law requirement, a continuing failure to do so can pose a problem for the broker in certain circumstances.
Was John Smith let go? Why wasn’t John let go? “I won’t be answering questions about other employees. I know you’d want the same consideration extended to you.
Phase III — Post Termination
Immediately after the termination meeting, everyone involved in the meeting should make notes.
Communication to all employees explaining the departure generally benefits employee morale and is encouraged. Identify how the employee’s former responsibilities will be handled and how their incoming phone calls and emails will be answered.