Guide to Human Resources for Law Firms

January 15, 2014
Andrew Tremayne

Creating the Employment Relationship

Reviewing Staffing Needs
Writing the Job Description
Setting the Salary
Finding an Employee
Screening Applicants
Interviewing
Checking References
Offering the Job
Asking for a Social Insurance Number

Maintaining the Employment Relationship

Avoiding Avoidance: The Key to Management Success
Correcting Employee Behaviours
Counselling Employees with Mental Health Issues
Setting the Rules of the Workplace
Policies I need at my firm
Obeying Employment Standards Laws
Income Tax, Employment Insurance, and Canada Pension Plan Laws
Workers' Compensation and Health and Safety Laws
Respecting Human Rights
Other Applicable Laws

Ending the Employment Relationship

Just Cause
Termination Without Just Cause
Caution: The Tale of Bad Faith Dismissal
Obtaining the Signed Release

1. Creating the Employment Relationship

a. Reviewing Staffing Needs

Before you begin the actual hiring process it may be useful to review the skills required at your firm. The following questions may help to guide your review:

What is the job title of the vacant position? Is it a common job title, and understood by others in the same legal community? Do other law firms have a similar position?
Why does this job vacancy exist? What business needs have driven the creation of this new job?
What duties will the incumbent perform? Who will he or she report to? Who will he or she supervise?
What background will this person need? How much formal education and on the job training is necessary? What computer and software expertise is required? What level of familiarity with languages must this person have? What special skills must he or she bring to the job?
Do I need a permanent employee, or one on a fixed term contract?

b. Writing the Job Description

A job description is a valuable tool in designing job advertisements, drafting interview questions, managing performance, and fixing remuneration. It also helps to defend against claims of discrimination and wrongful hiring. Therefore, creating a job description - even a brief one - is an important step in hiring a new employee.

At a minimum, a job description should contain the following:

Job title
People to whom the employee reports
People the employee supervises
Position Description: a paragraph on the key duties and responsibilities
Qualifications, broken down into Education, Experience, and Skills.

Ask for comments from your staff and colleagues, and ensure that the description is polished enough to present, on request, to any job seekers. For assistance, Human Resources Development Canada keeps a National Occupational Database with descriptions of various classifications that may assist you in the development of a job description at:

http://www23.hrdc-drhc.gc.ca/

c. Setting the Salary

A good informal starting point is to ask colleagues what they are paying employees in similar positions. You can then begin more thorough research. Have you noticed advertisements for the same position in the newspapers? If so, what are they paying? Pretend you are a job seeker, and go on the Internet - what are other companies paying for similar jobs?

On the Internet, a useful tool for lawyers in determining salaries is the national legal practices and compensation survey, recently released by the Canadian Bar Association. For a summary, go to the CBA Website. Also, see Finding an Employee, below, for links to useful job boards that may assist in surveying salaries.

Now you can set a salary range. The bottom level of the range should reflect the starting salary for the employee with the minimum qualifications that you are willing to accept. The top of the range should reflect the maximum you are willing to pay an experienced employee in that job. Expect to put successful junior applicants toward the bottom of the range and those with more experience closer to the top of the scale.

d. Finding an Employee

The following are methods an employer may consider to find a new employee. Depending on the size of your practice, your location, and the skills you require, one or more of these techniques may be required.

Placing a traditional newspaper advertisement, including legal publications
Using a professional recruiter
Accessing the Internet
Letting colleagues know you are searching
Posting jobs on law school campuses, the barristers' lounge at the courthouse, etc.

The Canadian Bar Association's National Career Site allows employers to post vacancies.

Human Resources Development Canada provides a free Internet job bank that is accessed by thousands of job seekers every week at http://www.jobbank.gc.ca/home-eng.do?lang=eng.

The Globe and Mail runs a popular service called Workopolis. Employers must pay a fee to register job openings. Click on "Employers" after you have entered the site.

For lawyers in Ontario, the Law Society of Upper Canada runs a board for Ontario law jobs. In addition, Bar Ex runs a website for lawyers which provides free posting of job openings to their career centre.

Many other websites offer law-related jobs, though most come from the United States. Nonetheless, you may wish to explore this avenue of job posting. Start by entering "law jobs" on www.google.ca.

e. Screening Applicants

Screening the resumes that come in response to a job advertisement is simple. Use the job description you created under Writing the Job Description, above, to create four piles of resumes. First, there should be a discard pile. Often applicants with no relevant qualifications or experience will send a resume, hoping for a chance at an interview. Second, make a pile of those who do not meet all of your essential qualifications, but have some relevant experience. Make notes on each resume. What does this person have that you like? What does he or she lack? Your third pile contains resumes that meet all of your basic minimum qualifications. The last pile is reserved for those who may be overqualified.

What else should you look for when screening resumes? Realistically, in these times, it is difficult to find applicants with perfectly linear career growth, but you may wish to avoid the applicants who seem to move around too often. Similarly, you may wish to note, for the interview, gaps in an applicant's work history or inconsistencies in the timeline of a resume. Look closely at the cover letter together with the applicant's resume. Does the resume show that the applicant really has the skills you are looking for, or has the applicant's cover letter merely aped the words in your job advertisement?

Remember all jurisdictions have human rights laws that prevent employers from screening applicants on discriminatory grounds. Your jurisdiction may include some or all of the following:

Age
Race
Ancestry
Place of Origin
Colour
Ethnicity
Citizenship
Religion
Sex
Sexual Orientation
Marital Status
Family Status
Record of Offences, or
Handicap/Disability

Provinces Human Rights Laws
Alberta	British Columbia
Manitoba	New Brunswick
Newfoundland and Labrador	Nova Scotia
Ontario	Prince Edward Island
Quebec	Saskatchewan
Yukon

f. Interviewing

"Sell your firm" is the one rule of interviewing that most employers forget. At the interview, a candidate will decide if he or she likes the firm and the people across the table. If not, they'll walk. So ensure the interview environment is comfortable, take time for small talk, hold all incoming calls-everything common sense dictates.

Deciding how many people should sit in on an interview is a hard decision for any but sole practitioners. Most people would not be comfortable being cross-examined by a panel of five barristers. A smaller panel would probably be wiser. However, at least two interviewers should be present, and one should take verbatim notes to prevent any future claims of discrimination or wrongful hiring.

What questions should you ask of the applicants? Simply refer back to your job description (see Writing the Job Description, above) and elicit information on each major point in the description. Feel free also to ask how much the applicant knows about your firm or your area of practice. A good applicant will have done some homework before an interview.

Here are few tips to get you started:

To narrow the list of candidates to be interviewed, conduct a preliminary phone interview, asking each applicant a few very basic questions (think of this as "weeding out" the second, third and fourth piles of resumes)
Design your interview questions around the job description
Avoid asking questions contrary to human rights laws (see below)
Set questions in gender-neutral language
Ask every applicant the same questions
Try asking for concrete details, such as, "Give me an example of a project that didn't go so well at your last job. What did you do about it? What did you learn from this?"
Keep detailed notes of the interview
Ask applicants about their strengths and weaknesses, their experience and training
You may set skill tests, such as typing tests, if relevant to the skills listed in your job description
Language fluency testing, if necessary, can be conducted by an outside agency or on the spot
Give the applicant a job description and salary range, if requested
Ensure the applicants know what your hiring process is, and how long it will take
Be careful not to promise the world to an applicant - wrongful hiring is expensive to defend in court
Ask if you may check the references and educational information provided by the candidate
Ask, "If you are the successful applicant, how soon will you be able to join our firm?"
And, "Does the salary we are offering meet your expectations?"
Always finish with, "Do you have questions for us?"

Questions you should not ask on an interview:

Do you have child care issues?
What does your spouse do for a living?
What is your Social Insurance Number? (SIN's can identify immigrant status.)
Are you planning on having children?
What is your date of birth?
Do you prefer to be addressed as Miss, Ms, or Mrs.?
What country are you from?
Do you have Canadian citizenship or are you a landed immigrant?
What languages do you speak? (If a language is an essential aspect of the job, you may ask, for example, "Do you read and write French fluently?")

Note that your jurisdiction's human rights commission may provide assistance. See the links provided under Screening Applications, above.

g. Checking References

It's tedious. It's time consuming. However, checking references will allow you to verify the accuracy of a candidate's resume - including work history, performance, job title, and personality - and guarantee a proper fit within your firm. If you are hiring a lawyer, in particular, you can verify practice experience and expertise. If you do a careful and thorough job at this point you can save yourself a great deal of time, expense and unpleasantness later. It is much easier not to have hired someone at all - for the right reasons - than to have to manage or even dismiss a problem employee.

Seeking permission, during the hiring interview, to check an applicant's references is the first step. At least two references should be provided, though more is better. Personal references do not carry the same weight as former employers - ask for these names if they are not forthcoming.

Next, draft a list of questions that you will ask every reference. Review the questions to ensure they use gender-neutral language and do not inadvertently contravene a prohibited ground of discrimination (see examples under Screening Applicants, above). Be cautious, for example, about asking questions about attendance records at former jobs. This may tread into health-related concerns, and thus raise concerns about discrimination on the basis of handicap or disability.

Most referees will generally know that you are going to call and are ready to launch into a description of the candidate's work. Describe your firm, and the job the candidate applied for, and ask the referee to comment on the fit of the applicant to the job you detailed, focusing on both strengths and weaknesses. Remind the referee that all comments will be treated confidentially.

Add questions like the following, provided they are relevant to the job your are attempting to fill:

What work did the candidate do for you in his or her former position?
How long did he or she work for you?
What was his or her job title?
Why did he or she leave the position?
How would you rate his or her performance?
Would you work with him or her again, if you had the chance?
What were his or her work habits like? Organized? Messy?
Did the candidate show ambition?
Did the candidate receive letters of commendation or merit pay increases?
Did the candidate easily confess his or her mistakes?
Other specific questions related to technical or professional skills.

What should you do if a reference volunteers information you do not want to hear, such as "she is pregnant"? Reply that you are not interested in that kind of information, and that you want to know about the quality of the applicant's work. Your notes should reflect your response for the record.

Lastly, some employers do not give references over the telephone but prefer to do it by mail. This allows them to vet their references with lawyers and with senior management. Many employers may simply give basic information, such as, "Ms. Smith worked as a payroll clerk with our firm from January 2000 to February 2002." This reticence to give details may - or may not - reveal a problem dismissal or resignation.

Telephoning educational institutions to confirm an applicant's resume, may also be fruitful. Make sure you have asked permission to do this during the job interview.

h. Offering the Job

How should you offer a job? Generally a telephone call should be placed to the successful candidate. Congratulate them! (Remember you are the great new boss he or she wants to work for.) At this point, tell the successful applicant that you are mailing him or her an offer letter. The applicant should read over the terms of the letter, sign a copy and return it to you.

Consider whether you should have a detailed employment contract, or a simple letter of offer. If you are hiring a lawyer, he or she might expect clear and specific terms and conditions to be spelled out in writing. If you are hiring an administrative assistant, a complex contract might frighten away a possible applicant. If you expect someone to sign a detailed agreement, make sure that you give them a copy as soon as possible, or at least tell them at the time you make the job offer that they will be expected to sign an agreement.

As an employer, though, you may want more certainty, especially to defend against a possible action in the future. If so, you may want to seek the advice of an experienced employment lawyer.

Remember that courts may imply certain terms into an employment contract where they are not stated explicitly in writing. A court will generate reasonable terms, including "reasonable notice"-the amount you will pay your employee if he or she is wrongfully dismissed. This amount of money may, in the future, be much more than what you could contract for at the start of the relationship.

At the very least, your offer letter should state the job title, the salary and benefits, and the start date. However, you may wish to address further terms in the letter of offer or in an employment contract:

Termination
How much notice do you want of an employee's resignation?
How much notice will you give the employee upon termination?

Probation
Will the new employee serve a period of probation?
Will he or she be dismissed for failing probation?

Remuneration
Spell out clearly bonuses, commissions, profit sharing, etc.

Term
Courts assume indefinite, permanent employment unless otherwise stated.

Confidentiality
Protect your clients' matters and your business affairs.

Other
Rules or policies the employee must follow.

Employment contracts must meet the minimum requirements spelled out in your jurisdiction's statutes. Such laws will often define minimum wage, hours of work, overtime, vacation and holiday pay, notice or pay in lieu of notice of termination, and severance pay. However, you should note that professionals, including lawyers, are generally exempt from such laws by virtue of an exempting regulation. See Obeying Employment Standards Laws, below, for more information and useful links.

For a sample employment contract or sample employment letter, try typing "sample employment contract" or "sample employment letter" into www.google.ca. Be sure to check the box to return Canadian websites only. You may also wish to speak to an experienced employment lawyer.

i. Asking for a Social Insurance Number

Social insurance numbers are often demanded on application forms created by educational institutions and banks. So is it acceptable to ask an applicant for a social insurance number at any time? The answer is no. A social insurance number may reveal whether an applicant has landed immigrant status, and thus will likely violate the human rights laws of every jurisdiction in Canada.

But the federal government requires that a new employee give a social insurance number within three days of being hired. So when should you ask for the number? You wait until offering the successful applicant the job in writing. Then, and only then, is it appropriate to ask for the number. This practice will avoid any human rights complaints.

Social insurance numbers are used in the administration of the Canada Pension Plan and the Employment Insurance program. Human Resources Development Canada provides more information on Social Insurance Numbers.

2. Maintaining the Employment Relationship

a. Avoiding Avoidance: The Key to Management Success

Ninety percent of good management consists in overcoming our own conditioning and fear. Most of us were taught to avoid conflict at all costs. When exhibited by employers, however, this conditioning tends to exacerbate many problems at work. Thus, every partner in a firm should practice avoiding their natural tendency to avoid conflict. A concise example may explain this principle more clearly.

An employee is a half-hour late every day. At first, the boss ignores this behaviour, believing that the employee might have some personal problems that will soon be sorted out. But, one day of tardiness soon turns into a week, and all the while the boss is letting the problem go.

The employee, on the other hand, has realized that his or her boss does not care. It does not matter what time I come in, he or she reasons. The employee's resentment festers, encouraging him or her to continue the tardiness.

If the boss had chosen to avoid avoidance, this problem would have been addressed on the first day. Being polite, and friendly, the boss would ask, "Hey, everything okay today? I noticed you were a half-hour late." Thus, the discussion around punctuality would have started, and the proper times to attend work would have been reinforced.

Putting the rule of avoiding avoidance into practice will establish a work place that runs smoothly, encourages performance, and raises employee morale. Soon, the late employee will enter the boss's office with the problem already solved. "Sorry I'm late, my alarm clock broke. After work, I'm buying a new one."

Waiting too long to correct problems such as tardiness can permit the employee to argue that the employer has condoned a change to the employment contract. Be careful.

b. Correcting Employee Behaviours

The following steps may be used to correct problematic employee behaviours. These steps assume that the employee has the ability to actually modify the behaviour. Employees with drug dependency, mental health problems, or other serious personal issues should not be dealt with in this fashion. (See Counselling Employees with Mental Health Issues, below.)

Ask yourself, "What is the problem?" and put it into a sentence or two.
Is it reasonable to ask the employee to correct this problem?
Read the employment contract. Are you violating one of its terms by insisting upon this change?
Invite the employee into your office and engage in some small talk to calm the waters.
Tell the employee, specifically, the problem that has come to your attention. Do not mince words. Be direct. Be polite and dispassionate.
Listen! This is the most important. Is the employee telling you about a personal problem?
Don't pry. Each employee is entitled to privacy, and you may tread across the boundaries of human rights laws.
Remind the employee of the expected behaviour. If you have a written rule or policy, give a copy.
Ask if the employee is willing to take steps to meet the expectations.
Offer to assist the employee in meeting the expectations.
If this employee has heard this conversation before-a repeat offender, in other words-follow up with a letter confirming the employee's agreement to take steps to change, what steps were agreed to, what the new behaviour shall be, and how long it will take to meet the new behaviour. Don't forget to tie the bow: "Future repetitions of this behaviour may lead, ultimately, to dismissal."

You may wish to rehearse. If you feel at any time that you are lost or want to think over what the employee has told you, feel free to break off the conversation and return to it later in the day.

c. Counselling Employees with Mental Health Issues

If you suspect your employee is dealing with serious personal problems that could be affecting their mental health, causing symptoms such as depression, anxiety, or drug dependence, you cannot simply insist their problematic behaviour cease. You have a legal obligation to reasonably accommodate the disability. And, if your employee is a lawyer, you have a professional obligation to ensure that client matters are not affected.

So, what do you do? As a first step, you may talk to your employee and point out a few of the problems happening at work. If your employee is a lawyer or an articling student, your law society may allow him or her to access an emergency assistance program or peer support. Give the employee the telephone number as a courtesy. Demonstrate your willingness to help.

Afterwards, you may require the assistance of legal counsel, experienced in employment law and human rights. Do not let problems persist for too long without getting some advice.

For lawyers and articling students, almost every law society in Canada provides for a lawyers' assistance program. The Canadian Bar Association's Legal Profession Assistance Conference provides a link to every jurisdiction's assistance program. In addition, the site provides useful information on battling stress, health and wellness, and useful education programs.

The Law Society of Upper Canada has a useful Practice Management Guide on Personal Management which gives some advice on recognizing problems with stress and mental health issues in the practice of law.

d. Setting the Rules of the Workplace

Employers have several ways of laying down rules. One way is to write the rules into an offer of employment, or as terms in an employment contract. A boss might also send the occasional email, reminding people to remove their muddy boots, for example. Lastly, an employer might choose to develop an employment policy manual.

Employment policy manuals are important to law firms for several reasons. First, a manual helps to sell the law firm to applicants by assuring them that the firm has established rules and procedures, particularly policies that protect employees against discrimination and harassment, for example. Job applicants may also want to know whether the firm has policies on alternative work arrangements, maternity and parental leave.

Policies against discrimination and harassment can also be a caution to some employees by demonstrating the seriousness of rules in the workplace. In the long run, this is a hedge against risk of liability. Evidence that the firm has, and applies, policies may guard against frivolous claims of discrimination.

Policy manuals create certainty in working relationships. They ensure consistent and fair treatment of all employees, and prevent a culture of dissatisfaction from arising. Low employee morale, in some firms, is a result of the perception that some employees are favoured more than others.

Finally, policies are key to correcting behaviour, or firing employees in serious cases. Policies establish the expectations of the employer, and define the behaviour that is acceptable. They can be excellent evidence if ever an employer's decision to fire is challenged in court or before a tribunal.

e. Policies I Need at My Firm

A small firm may wonder whether it has either the expertise or the money to create an employment policy manual. The answer is, always, yes.

An employment policy manual can be as simple as a three-ring binder distributed to employees. Updates can be sent via email, as policies change from time to time.

At a minimum, every law firm should have the following:

A harassment policy
A maternity and parental leave policy
A policy on workplace equity, including a statement on equality in employment interviews, and
An alternative work arrangements policy

Failing to have these policies shuts the door on a host of qualified applicants and employees. Talented lawyers with child-care issues, for example, are likely to leave for better offers elsewhere.

f. Obeying Employment Standards Laws

Most employment relationships in Canada are governed by minimum standards laws passed by provincial legislatures. These laws will define the minimum rights your employees have regarding:

Vacations
Holidays
Hours of work
Maternity and parental leave
Leaves of absence
Overtime
Layoff, and
Termination

This legislation also defines an employer's obligation to create and maintain records, which generally includes keeping the following information:

Employee name and addresses
Commencement of employment date
Wages and deductions
Vacations and vacation pay
Leaves of absence

In most jurisdictions, regulations exempt professionals, such as lawyers, from certain employment standards. This exemption usually applies to articling students, as well. This means that if you hire a lawyer, you may not be required to pay overtime, for example. However, with a law clerk, you may. Check with your provincial employment standards or labour ministry office (see links, below).

It is important to note that a court may imply a term in an employment contract that is greater than the minimums provided in the statute. Frequently, this happens with the period of notice of termination. Thus, an employee may, for example, be entitled to a month or more based on common law principles, even where the legislation states that an employee is entitled to two weeks notice of termination (or pay in lieu thereof) (see Ending the Employment Relationship below).

Employment Standards by Province
Alberta	British Columbia
Manitoba	New Brunswick
Newfoundland and Labrador	Nova Scotia
Northwest Territories (has some information)	Nunavut (has little information on employment laws)
Ontario (information on the new Employment Standards Act, 2000)	Prince Edward Island
Quebec	Saskatchewan
Yukon

Human Resources Development Canada provides a useful but out of date site on comparison of employment standards laws across Canada.

HR ON-line provides a good page, allowing users to select the province and the employment standard.

g. Income Tax, Employment Insurance, and Canada Pension Plan Laws

The federal government requires employers to withhold income tax, employment insurance premiums, and Canada Pension Plan payments from employee pay cheques. In addition, employers must make their own payments towards the Employment Insurance (EI) fund and the Canada Pension Plan (CPP).

For information on withholding tax, EI and CPP premiums, consult the Canada Customs and Revenue Site, which has a guide for employers.

In addition, Canada Customs and Revenue's site provides useful information for completing a TD1 form, to determine the correct amount of tax to withhold from an employee's pay.

For information on Employment Insurance rates and forms, including the infamous Record of Employment, issued on termination, employers can consult a useful document prepared by Human Resources Development Canada.

For information on Canada Pension Plan rates, paid by both employers and employees, consult the following table prepared by Human Resources Development Canada.

h. Workers' Compensation and Health and Safety Laws

To protect employees from workplace hazards, occupational health and safety laws exist in each province. The burden of these laws on firms is minimal. Generally, a law office will not require a great deal of safety training and hazard proofing. In fact, many firms may be exempt from the purview of these laws by virtue of having too few employees. To discover more about health and safety laws in your jurisdiction, examine the links at the Canadian Centre for Occupational Health and Safety, in particular the list of government agencies.

Workers' compensation laws, in contrast, insure workers against occupational diseases and injuries arising from, or out of the course of, employment. They also protect employers by creating an insurance scheme that forbids lawsuits. In most cases, law firms are required to register and remit regular payments, which are usually inexpensive because office environments are relatively safe. For information on workers' compensation in your area, visit the Canadian Centre for Occupational Health and Safety's page of links to workers' compensation agencies across Canada.

i. Respecting Human Rights

Every person is entitled to be free from discrimination during employment, as well as in the process of applying for employment. Therefore, from the time the job is advertised through the interview and reference checks, and up to the termination of employment, no set of laws are more ubiquitous than human rights laws. If you haven't read them already, you may wish to return and read the following sections of this guide, all of which provide some guidance in the area of human rights:

Writing the Job Description
Screening Applicants
Interviewing
Checking References
Asking for a Social Insurance Number
Counseling Employees with Mental Health Problems
Policies I need at my firm

Remember, as a lawyer your professional code of ethics mandates you to prevent discrimination in your workplace. This means attempting to accommodate those employees with disabilities, including mental health problems, those with long-term illnesses, and those who are pregnant.

Some law societies have created model policies which may be of assistance, and a few provide a discrimination ombudsman. See Policies I Need at My Firm, above, for links to various law societies.

Also, each province's human rights commission has information which may be of assistance to employers on human rights. See Screening Applicants, above, for links to Human Rights Commissions in Canada.

j. Other Applicable Laws

Every province has its own laws, particular to its jurisdiction, which employers must follow. Other laws and instruments that may apply to you besides the ones listed in this guidebook are:

Pay Equity
Provincial Holiday Statutes
Employer Health Taxes
Directions regulating the practice of law

A simple way to find these other laws is to visit your jurisdiction's ministry of labour site and read the information given to employers. (See Obeying Employment Standards Laws for links, above.) Keep an eye out for exceptions:

Does your firm have too few employees for the law to apply?
Are professionals exempted from the law?

3. Ending the Employment Relationship

a. Just Cause

Employment law is grounded in common law contract principles. Every employment relationship is a contractual one, regardless of whether it has been reduced to writing. Intent, offer and acceptance, and consideration are the typical indicia a court would look for in order to find a valid contract of employment, as in any other contractual relationship.

Firing for "just cause" means an employee's behaviour was so egregious as to completely breach the employment contract. So, if an employee, for example, steals from the firm, or from a client, commits fraud or violently injures a colleague, an immediate just cause for dismissal is usually made out.

Another way to achieve a just cause dismissal is to use progressive discipline, described in Correcting Employee Behaviours, above. The severity of the warning given must grow each time the behaviour is repeated. Thus, from a verbal warning, the next step is a written warning, and then another written warning-this time stating clearly that one more similar infraction will lead to termination-and then a "last chance" agreement. Here the employee agrees to change or be fired. Finally, then, you have reached the termination stage.

Why is just cause so important? There are two reasons. First, if just cause can be shown, then an employee will not be entitled to any reasonable notice of termination, reducing the amount payable to him or her upon the dismissal. Secondly, in Quebec and Nova Scotia, employees, generally speaking, cannot be fired at all unless just cause can be shown.

b. Termination Without Just Cause

For many reasons, most dismissals probably fall into this category. For example, employers rarely keep enough documentation to be able to prove just cause. Alternatively, an employer may not want to wait or take the time and effort to use progressive discipline. An employer may simply find that an employee is no longer a good "fit" at the firm or has lost interest in or enthusiasm for the job. Lastly, many employers avoid dealing with the problem behaviour of their employees, allowing poor conduct to fester and grow (see Avoiding Avoidance: The Key to Management Success, above). All this to say that as an employer, your justification for the termination may be perfectly reasonable, but it just may not meet the legal standard of "just cause".

Therefore even if an employer does not have "just cause," it may still terminate an employee's employment by providing notice (or pay in lieu thereof) of termination. You will, in effect, have no choice but to "buy" your way out of the employment contract.

How much notice is an employee entitled to upon termination? This question really has two answers. First, if there is a well-drafted employment contract, where the employee was given the chance to obtain independent legal advice, then the notice spelled out in the contract should be paid unless it fails to meet statutory minimums.

If there was no written contract, or if the contract is not likely to hold up in court, then the former employee is entitled to reasonable notice as determined at common law. Attempting to estimate what a court may give an aggrieved former employee is partly science, and mostly art.

However, there are some general criteria that affect the amount of an award to terminated employees:

Age. The older an employee, the more notice he or she will receive.
Length of service. The longer an employee has been with the firm, the more the notice he or she is entitled to.
Nature of the position. The more senior the employee, or the higher the status of the job, the more notice the courts will award.
The ability to find similar work. If the job market for that employee's skills is weak, the notice may be higher.

Other money that your former employee might be entitled to include:

Unused vacation
Bonuses
Profit share
Car allowance

All local employment standards laws speak to an employee's entitlements upon termination. Be sure to review the laws pertinent to you. There are many exceptions and exemptions. You should know, however, that the common law standard for "just cause" will likely be a lower threshold than the statutory standard required to disentitle an employee from receiving the minimum notice and/or severance. In other words, you may have just cause for dismissal at common law, but still end up paying the employee the statutory minimums because the particulars of the just cause are not sufficiently egregious to exempt the employee from the statutory minimums. See the links available under Obeying Employment Standards Laws, above.

c. Caution: The Tale of Bad Faith Dismissal

The manner in which an employee is dismissed may cause the damages awarded by a court to rise significantly. This is a recent doctrine, crafted by the Supreme Court of Canada, designed to punish employers for inflicting unnecessary suffering on former employees already rendered vulnerable due to the termination.

The courts may award extra financial penalties for the following behaviour:

Withholding a Record of Employment
Withholding References
Withholding Amounts Owing to the Employee
Alleging cause where none exists
Rudely firing the employee
Firing the employee via a posted letter
Surprising the employee with termination during a regular business meeting
Firing an employee just short of retirement age
Harsh, vindictive, or cruel behaviour

Use your common sense here. Make sure terminations do not occur on birthdays, for example. And, if possible, arrange some career or out placement counseling for the employee.

d. Obtaining the Signed Release

Though a signed release is never an absolute guarantee that a former employee will not commence a lawsuit or file a complaint, it does raise the bar.

To obtain a signed release from an employee, ensure that you are providing valuable consideration above and beyond that spelled out in the jurisdiction's minimum employment standards laws (see Obeying Employment Standards Laws, above). Additionally, if your employee has signed a contract of employment or a detailed offer letter, there is no requirement to obtain a release provided the terms regarding termination are followed.

When obtaining signed releases from employees, in exchange for a severance payment, use the following checklist to ensure you have not forgotten anything:

Does the former employee agree to waive all statutory and common law entitlements in exchange for the sum offered?
Does the release include specific waivers of termination pay, vacation pay, benefits, car allowances, payments into an RSP, and profit shares?
Does the waiver include an agreement not to compete with the firm or keep firm and client matters confidential?
Does the agreement indicate all firm property has been returned?
Is there an indemnification for the employer should the government declare greater amounts owing in income tax, employment insurance premiums, or other statutory obligations?
Did the former employee have the opportunity to engage independent legal advice?

Andrew Tremayne, B.A. (Hon.), LLB et Jorge Talbot, B. Sc. (Hon.), LLB

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