Dismissal without cause: Do reasons need to be given?

Giving reasons for dismissal and providing termination letters

Colin Gibson
Question: If an employee is dismissed without cause and provided reasonable notice or pay inlieu, does the employer have to provide any reasons for termination? Is a written termination letter always necessary?

Answer: Generally speaking, an employer has the right to terminate theemployment of a non-union employee with or without cause. If the dismissal is without cause, the employer must provide the amount of working notice or severance compensation to which the employee is entitled under the applicable employment standards legislation and the express or implied terms of the parties’ employment agreement.

There is often no need to explain or justify the reasons for dismissingan employee without cause. A simple statement in the dismissal letter to theeffect that the termination is without cause is normally sufficient. Also, itis usually advisable in the termination meeting to refrain from getting drawninto a discussion or debate about the reasons for termination. Emphasizing thatthe dismissal is without cause and encouraging the employee to review theseverance offer carefully and focus on moving forward is often good practice.

In Beattyv. Canadian Mill Services Assn., the employee claimed the employer hadacted callously and in bad faith when it notified him that his employment wasterminated because the organization had decided to “go in a differentdirection.” The B.C. Supreme Court rejected this argument, and ruled that theemployer’s representative “was not required to express any more extensivereasons for the termination than he did when the defendant was not attemptingto dismiss the plaintiff for cause.”

However,there are situations where it is advisable for an employer to provide reasonsfor its decision to terminate an employee without cause. In all Canadianjurisdictions, there are statutory restrictions on an employer’s right todismiss an employee. For example, under human rights legislation, an employer’sdismissal decision must not be connected to a protected ground such asdisability, sex, or age. Nor can a decision to terminate employment be a formof retaliation or reprisal for an employee’s exercise of certain statutoryrights, such as filing a human rights complaint, raising an occupational healthand safety issue, filing a workers’ compensation claim, engaging in lawfultrade union activity, or taking a leave protected by employment standardslegislation.

If theemployer believes there is a risk of such a complaint, it will usually beadvisable to outline the reasons for termination, to show the dismissaldecision was not influenced by a prohibited consideration. For example, thetermination letter might explain that the employee is being terminated as partof a downsizing due to adverse economic circumstances, especially if theemployee is the most junior worker in the affected area. Another appropriateexplanation might be a restructuring of the organization that has resulted inthe elimination of the employee’s position. Where accurate and defensiblereasons for dismissal are provided, the risk of an employee sensing an ulteriormotive and filing a complaint may be reduced.

Employersshould also be mindful of the manner in which a dismissal without cause andwithout any explanation can affect the climate in the workplace. If employeesfeel that a colleague has been dismissed for arbitrary reasons, it may create afeeling of unease or fear that can have an adverse impact on morale andproduction.

It is goodpractice to provide an employee with a letter confirming the termination of heremployment, even if written notice of termination is not legally required. Ifit is not possible to provide a letter at the time of dismissal, a letterconfirming the termination should be sent as soon as possible afterwards. Theletter should confirm that the employment relationship has been terminated, andindicate whether the dismissal is with or without cause. If cause is alleged,reasons should be provided. The letter should indicate that the employee willbe paid all wages that are owed up to and including the last day of employment,and set out any severance package that is being offered. The letter should alsoexplain how the employee’s benefit coverage will be affected, and makearrangements for return of the employer’s property and the employee’s belongings.If there are restrictive covenants the employer expects the employee to complywith after termination, it is often useful to summarize them in the terminationletter.

If theemployer is providing the employee with working notice of dismissal, the employmentstandards statutes in most jurisdictions require that the notice be provided inwriting. Working notice must be clear and unequivocal, and must specify thedate when employment will end. For this message to be communicatedunambiguously, the notice should always be in writing.

For more information see:

Beatty v. CanadianMill Services Assn., 2003 CarswellBC 1720 (B.C. S.C.).

Colin Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or [email protected].

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