What information is legally required in a termination letter? Does the employer have to give a reason if it’s providing reasonable notice?
Question: What information is legally required in a termination letter? Does the employer have to give a reason if it’s providing reasonable notice?
Answer: Historically, the law has stipulated that an employer did not have to disclose the specific reason for dismissal when it is proceeding with a termination without cause. It is well-established that employers have the right to terminate the employment relationship at any time, for almost any reason. I say “almost,” because an employer cannot dismiss someone based wholly or partly upon grounds that are protected by human rights legislation, or as a reprisal for, among other things, good faith complaints regarding harassment. Aside from those limited exceptions, an employer is entitled to end the relationship for any reason it chooses, no matter how silly, or for no reason at all. While it is common to offer a generic explanation such as “the decision to move in a different direction,” there is no obligation to do so.
However, the duty to act in good faith was defined by the Supreme Court to include a duty of honesty. It remains an open question as to whether that duty of honesty creates an obligation to disclose the reason, though few if any courts have found that it does. In a dismissal without cause situation, I usually advise clients not to discuss the reasons. However, where the dismissal is for cause, employers should briefly review the reasons for the decision and ensure the employee has no basis upon which to claim she was dismissed for cause without ever being told why.
The other context where providing a reason for the dismissal may be important is where there is the potential for an allegation that the dismissal related to a protected ground. For example, if the employee has recently announced she is pregnant, or suffers from a disability, it will be wise to make it absolutely clear the dismissal has nothing to do with such matters.
During the dismissal meeting, the employer should be direct and to the point. The meeting is not the time for questions and answers, debate or discussion about how the situation could be improved, as the dismissal should be a final decision by the time of the dismissal meeting.
Stuart Rudner is a founding partner of Rudner MacDonald LLP, a Toronto-based firm specializing in Canadian employment law. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell, a Thomson Reuters business. He can be reached at firstname.lastname@example.org.