Termination of Employment in Canada

The termination of employment is one of the most important issues covered in employment law. It is also one of the most challenging and confusing issues to handle as there are certain legal rights and duties, of both employer and employee, that have to be followed regarding the termination of an employment contract.

Any failure to adhere to the proper legal requirements, on the part of both the employer and/or the employee, when terminating an employee, could prove costly to both parties. For the employer there could high penalties to be paid, and for the employee there is the loss of the money that rightfully should have been be paid to the employee.

Originally termination of employment was governed under the common law of contract, which outlined the:

• the circumstances under which there was just cause to terminate the contract,
• notice period to be given if the contract was to be terminated without just cause, and
• damages which could be awarded from improper termination of the employment contract by either party.

The common law principles governing employment termination has also been incorporated into the employment standards legislation passed by the federal government, as well as all of the provinces and territories.

Employment standards legislation sets out the minimum standards of notice which must be given in terminating the employment of an individual employee, or groups of employees.

Note: These are the minimum requirements for the legislated employment standards only, but there may be additional notice required under the common law.

Individual Employee Termination Letter

In all jurisdictions the statutes requires written notice when terminating an individual's employment. Also, the notice periods can vary in the different provinces ranging from one week to a maximum of eight weeks depending on the period of service. In several of the provinces there is a reciprocation of notice where the employee is also required to give notice to the employer.

Federal Termination

In the federal jurisdiction, the Canada Labour Code requires the an employer to give the employee either two weeks written notice of termination, or two weeks' regular wages in lieu of notice, provided the employee has worked continuously for three or more months, and the termination was not a dismissal for just cause.

In situations where there is a collective agreement which allows the terminated worker to bump on the basis of seniority, then the employer is require to give the trade union and the employee whose job has become redundant, at least two weeks notice, or pay the worker who has been bumped, two weeks' wages in lieu of the notice.

In a layoff of between three to not more than twelve months, the layoff is not considered to be a termination. In this case, should the employer give the employee the two weeks statutory notice, while the employee is on a layoff of less than twelve months, the employer does not need to pay the two weeks wages in lieu of notice.

Provincial Termination

For employee termination of employment for each province go to Employment Standards, or see below for Employment Termination in the various provincial, territorial, and federal jurisdictions:

Termination of Employment in the Various Jurisdictions

Employment termination in (alphabetical order):

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Nova Scotia
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan

Federal and Territories

• Federal
• Northwest Territories
• Nunavut
• Yukon Territory