Handling Workplace Terminations – Legal Risks and Best Practices
Terminating an employee is one of the most difficult and legally sensitive actions an employer can take. Mishandling a termination can lead to wrongful dismissal claims, grievances, human rights complaints, reputational damage, and costly legal disputes.
Employers must follow best practices and legal requirements to ensure terminations are conducted fairly, ethically, and in compliance with employment laws. A well-structured termination process protects both the organization and the employee while minimizing risk.
Why Proper Termination Practices Matter
✔️ Reduces the risk of wrongful dismissal claims and legal disputes
✔️ Ensures compliance with employment laws and termination requirements
✔️ Protects the company’s reputation and employee morale
✔️ Provides clarity and fairness to employees
✔️ Supports smooth offboarding and transition processes
Legal Considerations for Employee Terminations
Human Rights and Discrimination Protections
Employers cannot terminate, discipline, or otherwise disadvantage an employee based on protected grounds under applicable human rights legislation (e.g., age, disability, gender, religion, family status).
Duty to accommodate employees to the point of undue hardship must be satisfied before any adverse action.
Constructive Dismissal Risks
Significant unilateral changes to an employee’s essential terms of employment (e.g., duties, compensation, reporting relationships, work location) without their consent may be deemed a constructive dismissal, entitling the employee to damages as if they had been terminated.
Termination for Cause vs. Termination Without Cause
For Cause: Reserved for serious misconduct (e.g., theft, fraud, severe insubordination). The threshold for establishing cause is high, and employers must conduct a fair and thorough process before asserting it.
Without Cause: Employers may terminate without cause if they provide appropriate notice or pay in lieu, in accordance with the employment agreement and applicable employment standards legislation.
Notice Periods, Severance Pay, and Statutory Entitlements
Employees are generally entitled to reasonable notice of termination or pay in lieu, which may exceed statutory minimums depending on factors such as age, length of service, role, and availability of similar employment (the "common law notice" concept in Canada, for example).
Statutory severance or termination pay may also apply under employment standards legislation.
Written employment contracts can modify entitlements but must comply with statutory minimums.
Procedural Fairness and Documentation
A fair and transparent process (especially for disciplinary matters) helps reduce legal risk.
Thorough documentation of performance issues, accommodations, and progressive discipline steps can be critical if a termination is challenged.
Employment Agreements and Contractual Terms
The terms of written (or even implied) employment agreements impact employee entitlements upon dismissal.
Restrictive covenants (e.g., non-compete, non-solicitation clauses) must be reasonable and enforceable.
Unionized Environments and Collective Agreements
Where employees are unionized, collective agreements govern termination rights and processes, often requiring just cause and following grievance procedures.
Best Practices for Handling Employee Terminations
Document Performance and Disciplinary Issues
Maintain records of employee performance reviews and disciplinary actions.
Ensure warnings and improvement plans are documented before termination.
Prepare a Termination Plan
Determine whether the termination is with cause or without cause.
Consult legal counsel to ensure compliance with applicable laws.
Outline severance packages, final pay, and benefits continuation.
Conduct the Termination Meeting Professionally
Choose a private and respectful setting.
Have a witness present, such as an HR professional.
Keep the conversation concise and professional.
Provide written documentation outlining termination terms.
Offer Support and Next Steps
Explain severance, final pay, and benefits continuation.
Offer outplacement services or career transition support if applicable.
Ensure a clear offboarding process, including return of company property.
Communicate with Remaining Employees
Address concerns to maintain morale and workplace stability.
Reaffirm company policies and expectations moving forward.
Ensure confidentiality and professionalism when discussing the termination.
Avoiding Common Termination Mistakes
🚫 Failing to provide proper notice or severance – This can result in legal claims and financial penalties.
🚫 Not documenting performance issues – Lack of records can weaken the employer’s position in legal disputes.
🚫 Handling terminations in a disrespectful or unprofessional manner – Poor handling can harm workplace morale and employer reputation, and can result in legal claims based on bad faith conduct
🚫 Ignoring post-termination obligations – Ensure all final payments, record of employment (ROE), and benefits transitions are handled correctly.
Take the Next Step: Ensure Legally Compliant Terminations
Terminating employees the right way minimizes legal risks and supports a professional work environment. If your organization needs guidance on termination policies or compliance, now is the time to act.
🔹 Get expert guidance on employee terminations – Our HR legal team helps businesses navigate terminations with legal precision and professionalism.
📞 Contact us today to ensure your termination processes are compliant and risk-free.
