The severance balancing act

Crafting the best deal for the company while avoiding legal actions
By Christoper M. Little
|Canadian HR Reporter|Last Updated: 01/13/2003

For employers and human resources professionals, making a decision to terminate a non-unionized employee without cause is often very difficult. Equally difficult can be deciding on the terms of the separation package offered to the departing employee.

Where no employment contract exists, or one does exist but it does not have a termination provision, two key factors must be considered when terminating an employee without cause: the timing of the termination, and the terms and conditions of the proposed separation package.

When timing the termination, an employer has two options. First, the employee may be terminated effective immediately. Here, the employee is told about the termination and leaves the workplace shortly thereafter. The second option is to provide working notice of termination. Here, the employee is told employment will end on a specified date, and in the interim, the employee is expected to perform regular duties and will continue to receive salary and benefits at current levels.