Setting the Record Straight: This Dismissal Advice Entirely Missed the Point
By Howard Levitt
There is no area of law in which myths and misinformation so dominate than employment law.
It is not merely the layperson, every one of whom has an opinion. Sometimes, you can’t even trust the writings of employment law specialists. They, too, can miss the point and/or get it wrong. This came to mind in reading two employment law question-and-answer columns in another newspaper, written by two different lawyers. Since the subjects are of interest, I am recounting and correcting the advice.
In one column, the reader asked whether there is any “legal way to strike (a previous termination) from his employment history.” The lawyer responded that, short of an employee suing for wrongful dismissal, which would be on the public record “there appears to be no viable way to strike this off your employment history, since there is no specific employment history to revise,” noting that Service Canada, i.e. EI’s records, are not accessible to prospective employers or to anyone else.
This advice entirely missed the point.
Contrary to what this legal writer opined, there is indeed an “employment history to revise.” The issue is not limited to merely what is listed with Service Canada for EI purposes, which is indeed confidential.
The harsh, but accurate, reality is that there is an “employment record” and it cannot be eradicated. Employers are permitted to be even brutally candid in providing employment references, however horrific the information. For that matter, even if the information is false, as long as it is provided in good faith with an honest belief in its accuracy, the reference provider cannot be successfully sued for defamation. So there indeed is an “employment record” that resides in the files and memories of the employer who fired him.
But there is another, even more fundamental, element that was not explained.
As most readers know from their own experience, employers during the hiring process routinely ask about the circumstances in which the employee left the previous job. If an employee, in response, lies about those circumstances, that can become cause for discharge at that new employer, whenever that employer learns about the lie, even potentially years later.
You might want to place your own spin on the information, but even that risks the former employer, if contacted, taking a different position.
This is the true answer to the question.
The best way to deal with the potential reputational impact of a dismissal is to make that part of the termination arrangements. Employees should attempt, generally through counsel, to arrive at an agreed position with the employer as to how the departure will be announced and characterized if the employer is contacted for a reference. Neither party can be untruthful (without facing potential liability), but you can agree on how to characterize that truth.
A response from a different lawyer to another posed question in the same paper was more palpably wrong.
In that case, the writer noted that, in the six-month severance package he was offered, no amount was offered for the profit-sharing payments that would have become due since the HR policy stated he must be “actively working at the time of distribution.” The writer asked whether he was entitled to “receive (this) payment.”
The employment lawyer responded that the contractual language stating that he must be “actively employed” usually makes an employee ineligible for payment during the severance period since that language means that “if you are receiving severance and not actually at work, there is no obligation to make a payment that would otherwise be required.”
That is incorrect.
The recent decision of Lin v Ontario Teachers Pension Plan decision of the Ontario Court of Appeal specifically dealt with the contractual requirement to be “actively employed” when profit-sharing payments come due during the severance period. The court found that that language explicitly does not prevent wrongfully dismissed employees from receiving such profit-sharing amounts.
Let us take the situation of a $1 million-a-year financial executive, who quite characteristically, receives $900,000 of the million dollars in the form of bonus, profit-sharing, and/or long-term incentive plan. If those plans, as they often do, contained the language that this column opined upon, the column would suggest that your severance would be based only upon the $100,000 base salary, not upon $1 million. If such an executive received a severance offer of, say, 12 months based only on salary and accepted the $100,000 based upon this advice, he or she would not be very happy to later learn that she was entitled to the full $1 million.
It is difficult for a layperson to ascertain the expertise of a lawyer. Even some specialists get it terribly wrong. Whether they have written books, edited law reports, chaired many specialist conferences or appeared in appellate courts where knowledge of the law is paramount might be a good starting point for your selection process.