An employers guide to termination notice periods

As an employer, at some point you will have to end the employment relationship with a worker. It's not always pleasant, but it's an inevitable part of running a business. If not handled well, it could lead to costly wrongful dismissal claims.

One critical aspect of terminating an employee in accordance with employment standards is providing the correct notice period. Notice periods refer to formally informing an employee about the end of their employment (usually in writing) and the period between when the notice is issued and their last day of employment.

In this article, we'll explain everything you should know about notice periods in accordance with the law, why sufficient notice is essential for both the employee and employer and the best practices for managing notice periods to avoid legal risks.

What is the legal framework of notice period for termination of employment?

The legalities of terminating an employee, including providing a notice of termination, depend on the following:

·         The employment contract

·         Common law notices

·         Length of Service

·         The employment standards of the province or jurisdiction where you conduct business.

Employment Standards legislation in most Canadian jurisdictions provide that an employee is entitled to receive a certain termination notice period after they have completed a length of service of at least 3-months. Failure to provide termination notice to an employee that is eligible and entitled to receive it may lead to a wrongful dismissal claim against the employer.

It's crucial to be familiar with your employees' rights under relevant legislation and common law. Several factors can influence the notice required, such as the employee's length of service with your company, their age, or how difficult it would be for them to get alternative employment. That's why it's important to have watertight employment contracts with clear, well-drafted termination clauses that explicitly set out the conditions for terminating an employee in line with minimum statutory requirements.

A well-drafted termination clause will take precedence over common law notice and protect you from wrongful dismissal claims that could amount to hundreds of thousands of dollars in damages.

For help drafting a termination clause, BrightHR offers an online database of employment contracts, policy templates, guides and more.

Significance for employers

There are several reasons why it’s important that you know what employment legislations apply to termination of employment. During an employee notice period, you must continue the employee's regular employment during the statutory notice period (the time between issuing a written notice of termination and the employee's last day with the business).

In the last few weeks of your employee's time with you, it's vital to maintain your obligations to the employee, such as continuing to provide their benefits, paying them their regular wages, and being responsible for their health & safety.

You must also ensure you aren't terminating the employee because of a protected characteristic, or your business could be subject to discrimination claims.

How to calculate your employee's notice periods

Calculating notice periods is fairly straightforward. Although notice period as prescribed in employment legislation vary by province, one thing is common between them. The longer an employee has been with your business, the longer the notice period they're entitled to. Let's take a look at the termination notice for a few provinces.