How To Fire Well and Hire Well January 18, 2018 Kelly Slade-Kerr - PowerPoint PPT Presentation

How To Fire Well and Hire Well January 18, 2018 Kelly Slade-Kerr

About HHBG We are a boutique employment and labour law firm of 15 lawyers, a mediator, and a dedicated team of support staff with offices in both Vancouver and Surrey. Employment and labour law is all we do. We advocate for employees. Services we provide to employees:  Termination / dismissal / severance  Reviewing and negotiating employment contracts  Bullying and harassment  Performance/discipline investigations  Independent contractor vs. employee  Non-competition/non-solicitation agreements  WorksafeBC  Human rights/discrimination

Steps in a Termination • Do we have cause for termination? Step 1 • Employment Standards Act • Contractual termination provision OR common law of reasonable Step 2 notice? • How do we want to structure the termination/severance? Step 3

Just Cause If just cause for termination ≠ notice or pay in lieu of notice. ◦ Is it really cause? ◦ Serious breach of employment relationship – the smoking gun/walk out the door NOW ◦ eg. Theft, fraud, gross insubordination ◦ Conduct incompatible with continuing employment relationship ◦ eg. Off duty conduct

Just Cause ◦ Ongoing conduct of a less serious nature ◦ eg. substandard performance, bad attitude, minor insubordination, minor breach of company policy ◦ Here, the employer has to jump through a number of hoops in order to rely on the misconduct: o Warn the employee o Explain the standard and how the employee is falling short o Explain what the employee needs to do to ‘pull up their socks’ o Give the employee a reasonable period of time to do so o Provide additional warnings, and additional time, including a warning that if the employee continues to fail to improve he or she will be terminated with cause. ◦ If the employer does not jump through these hoops then, despite the existence of improper conduct, the employer cannot rely on the conduct to establish cause.

Entitlements on Termination 1. Employment Standards Act AND EITHER: 2(a). Common Law (Reasonable Notice) 2(b). Employment Agreement/Contract/Offer Letter

Employment Standards Act  Notice in writing  After 3 months = 1 week’s notice  After 1 year = 2 weeks’ notice  After 3 years = 3 weeks’ notice plus one week per additional year to maximum of 8 weeks  Alternatively, pay in lieu of notice or combination of notice/pay in lieu  Regular weekly wages X number of weeks’ notice  Payable in a lump sum within 48 hours of termination date  No requirement to continue benefits  Cannot contract out of ESA – minimum obligations  Does not apply to lawyers or employees hired for specific task completed in less than one year or on a fixed term

Contract/Offer Letter What does the contract say? Is it enforceable?  Cannot be less than ESA minimums  Consideration is the benefit received by each party to make a contract enforceable. Without consideration, a contract is NOT enforceable. Period.

Contract/Offer Letter Two common mistakes by employers: i. Hire an employee based on a verbal agreement (compensation, title, and start date) and then present the employee with a written contract on day 3 of their job containing a termination clause (not previously discussed) and no new benefit for the employee. ii. Decide that you need to add termination clauses to your existing employees’ contract. Create a new contract and get your employee to sign it without some new benefit for the employee. If a termination clause is unenforceable for any reason, then the employee reverts to the right of reasonable notice under the common law.

Common Law Employees’ common law right to reasonable notice ◦ Common law = the law made by judges ◦ Reasonable notice (age, length of service, type of position, availability of alternative employment) ◦ Maximum of 24 months (2 years) usually

Structuring the Package  Working notice or immediate termination  Immediate termination = damages in lieu of reasonable notice  Employee is entitled to be placed in same position as if they had been permitted to work out the notice period  Lump sump or salary continuance or combination  Mitigation  Get a Release!

Tricky Terminations Can you terminate an employee on maternity leave (or just back from maternity leave) or an employee on LTD? i. BC Employment Standards Act ◦ s. 54(3) of the ESA requires an employer to place the employee in their former position or a comparable position ◦ “meaningful reinstatement” ii. BC Human Rights Code ◦ The Code protects employees from discrimination on the basis of sex (pregnancy) or disability. ◦ If an employee can show that her pregnancy or disability was a factor in the decision to terminate her employment, this is a contravention of the Code iii. Common law ◦ Notice period cannot coincide with leaves. ◦ Offset of disability benefits ◦ Frustration of contract

Termination Meetings How they are handled is a critical piece in the terminated employee’s desire to ‘lawyer up’. ◦ Get right to the point and be direct and unequivocal. ◦ Simple reasons (unless human rights considerations). ◦ Treat the employee with respect. ◦ Try and give the employee some sense of control. o e.g. options under the severance package, involvement in the messaging out to the organization about the departure, the ability to keep their cell phone number or their laptop. ◦ An employee probably won’t remember what you said during the termination meeting, but they will remember the way you made them feel.

Termination Meetings “ This is a difficult meeting and I want to get right to the point. We have made the decision to terminate your employment. This is a without cause termination; we’ve decided to make a change and we don’t want you to take it personally. Our goal here today is to ensure you have as smooth a transition as possible under the circumstances. I have a letter here that sets our your options in terms of a severance package. Go home, take your time, and consider which option works best for you. We also want to work with you on the messaging that goes out to the company about your departure. If you want to call it a resignation or say that you are moving on to another opportunity, we are happy to do that. If you want us to refer to it as a termination or a downsizing or have us simply state that you are no longer with the company, we are happy to do that as well. Don’t make any decisions right now. Go home and give this some time to sink in. Reflect on what makes sense for you and call us if you have any questions. ”

Practice Points How do you HIRE well? ◦ Clear, concise written employment contracts ◦ that limit your liability on termination, ◦ and are enforceable!

Practice Points How do you FIRE well? ◦ Direct and respectful termination meetings. ◦ Be proactive about employee’s entitlements . ◦ Documented management of misconduct / performance to (get the employee back on track or) successfully terminate for cause. ◦ If the employee is on (or returning from) a maternity or medical leave, ensure you are taking steps to avoid a complaint under the Human Rights Code and proactively managing the termination. ◦ Get a release!

Disclaimer The content in this presentation is provided for general information and educational purposes only and does not constitute legal advice. Users of this material are advised to seek specific legal advice by contacting Kelly Slade-Kerr or another lawyer at HHBG Lawyers regarding any specific legal issues.

Kelly Slade-Kerr D: 604.579.0733 E: ksladekerr@hhbg.ca W: hhbg.ca