Terminating Employees

Compensation for length of service under Section 63 of the Act:

• After 3 consecutive months of employment, the employer must pay an employee an amount equal to one week’s wages, or give the employee one week’s written notice or a combination of the two.
• After 12 consecutive months of employment, the employer must pay an employee an amount equal to two weeks wages, or give the employee two weeks written notice or a combination of the two.
• After 3 consecutive years of employment, the employer must pay an employee an amount equal to three weeks wages plus one additonal week’s wages for each additional year of employment to a maximum of 8 weeks wages. The employer can discharge this obligation by giving written notice or a combination of written notice and pay.

An employer cannot change the employee’s conditions of employment without the employee’s consent after notice of termination has been given.

The notice period cannot coincide with an employee’s vacation.

Vacation pay is payable on compensation for length of service.

An employer is not required to give compensation for length of service or to give written notice of termination in the following circumstances:

• the employee resigns or retires
• the employee is dismissed for just cause
• the employee is working under an arrangement whereby the employer can request the employee to come to work at any time for a temporary period and the employee can accept/reject one or more of the temporary periods
• the employee is employed for a definite term
• the employee is employed for specific work which is to be completed within a period of up to 12 months
• it is not possible for the employment contract to be performed due to an unforeseeable event or circumstance (except for receivership or insolvency)
• the employee is employed at one or more construction sites and the employer’s principal business is construction
• the employee has been offered and has refused reasonable alternative employment
• the Act does not apply to the employee

The information provided above relates to an employer’s statutory notice obligations.

Employers must not forget that common law reasonable notice obligations would apply even in situations where the Act does not require notice. A couple of examples:

• The Act does not require an employer to provide compensation for length of service if the employment is for a definite term. However, if an employer terminates an employee prior to the end of a fixed term contract, pursuant to the common law, an employer must pay out the balance of the term, unless the contract provides for some other period of reasonable notice.
• The Act does not require an employer to pay compensation for length of service to an employee who is excluded from the application of the Act.  However, these employees must be given notice in accordance with the common law requirement to provide reasonable notice.

Employee terminations must be done carefully and employers are encouraged to seek legal counsel before terminating an employee or employees.