Parting is such sweet, pricey sorrow (Editor's Notes)

Federally-regulated employers can terminate without cause – but it will carry a price tag
By Todd Humber
|Canadian HR Reporter|Last Updated: 02/20/2015

Don’t take your love away from me. Don’t you leave my heart in misery. If you go, then I’ll be blue — ‘cause breaking up is hard to do.

My apologies for sticking a catchy Neil Sedaka classic in your head, but we all know breakups make for great song lyrics. Just ask the likes of Adele or Taylor Swift, just so my references don’t sound completely dated.

Yet Sedaka was spot on — breaking up is really hard to do. But it shouldn’t be impossible, which has been the environment federally regulated employers have faced for decades in terminating staff without cause. 

Under the Canada Labour Code, it has been extremely difficult to get rid of a worker absent just cause. And we all know how high courts and arbitrators have set that bar.

Provincially regulated employers have had the luxury — if you want to call it that — of being able to end the employment relationship for no reason whatsoever by either providing notice, either in the form of time (a.k.a. working notice) or a cash payout equivalent to the reasonable notice period.

Of course, there is no magic formula for HR practitioners to plug in to determine what is “reasonable” — that would be too easy, and nothing about human resources is ever easy. But we know courts take into account factors such as years of service, age, availability of similar employment and position when it comes to calculating the figure. 

While no employment lawyer (or judge) would ever validate this approach, some firms use a “one month for every year of service” rule when it comes to guesstimating common law notice periods. That can be effective in mitigating litigation, but proceed with caution (and legal advice) because courts have developed something of a fondness for awarding higher notice periods for short-service employees.

But federally regulated employers may soon experience the joy of dismissals sans just cause, thanks to the ruling in Wilson v. Atomic Energy of Canada Ltd., as outlined by Jennifer Brown on page 1 of this issue. (See “Federally regulated employers can dismiss without cause: Court.”)

Don’t expect the news to be met with a flurry of terminations at banks, airlines or the federal government. Which, in my books, remains a good thing. In 1987, the Supreme Court of Canada commented on the importance of work to an individual in its ruling in Reference Re Public Service Employee Relations Act. 

“Work is one of the most fundamental aspects in a person’s life, providing the individual with a mean of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.”

The top court endorsed that thinking again in its landmark 1997 ruling in Wallace v. United Grain Growers when it added, “Thus, for most people, work is one of the defining features of their lives. Accordingly, any change in a person’s employment status is bound to have far-reaching repercussions.”

Firing an employee just because you don’t like her may sound tempting. Anyone with direct reports has undoubtedly had a moment where she wished Canada had more American-style “at will” employment laws, where you can ditch pretty much anybody without having to open your wallet as long as you don’t breach human rights.

But if you believe in good HR practices (and I know I’m preaching to the choir here), then you know the folly of that thinking. Firing an employee without cause is hardly a wonder drug. It can make other staffers fearful and suspicious — which are not good drivers of productivity, morale and engagement.

In the long run, the most profitable employers have a good track record of treating staff with respect, not creating a workforce constantly walking on eggshells.

So while breaking up without cause may now be possible for those governed by the Canada Labour Code, it still isn’t easy. And it won’t come cheap for the bottom line.

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