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Employment Termination - Three Methods For Providing Reasonable Notice

In Canada, employers have the right to terminate an employee's employment for any reason except based on age, gender, race, etc. Some dismissals occur due to serious causes such as theft, dishonesty or breach of trust, others for poor performance or for no cause at all. The latter, known as terminations without cause, are permissible so long as the employer provides the employee with reasonable notice.

Two Common, But Disadvantageous Forms Of Severance

Many employers rely on two main methods for providing notice. The first is working notice, in which the employer informs the employee of the end-date and has the individual continue working through to the last day of the notice period.

This method is generally not preferred. The presence of a now-disgruntled employee can easily decrease morale among remaining employees. The employee's decreased incentive for productivity and continued access to confidential information could also prove detrimental to the interests of the employer's business.

The second typical severance method is to provide a lump sum equivalent to the dismissed worker's compensation package through the entire notice period. While this method facilitates a quick departure, it is often unnecessarily expensive for the business.

A Win-Win Approach To Severance

The most common severance option is to provide a month-to-month payment of salary in place of notice. Employers can optimize this technique with the addition of an incentive bonus.

In such cases, an employer provides a monthly payment, on a month by month basis. When the dismissed employee finds comparable employment at an earlier date than the entire notice period, payments cease and the employee receives a bonus in the form of a pre-determined percentage of the remaining notice period.

Both the employer and worker benefit. The latter enjoys ongoing income after dismissal and into the next job, and also receives a windfall for having acted quickly to find new employment. The employer wins by shortening the notice period and simultaneously avoiding time-consuming and costly litigation.

With proper legal counsel, employers can implement effective methods for terminating employment relationships in a way that is fair, legally compliant and protective of business interests.

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