If an employer made a reasonable offer to begin with, the employee would likely take it, saving much money all around

Those of you old enough to recall those song lyrics, “Oh the games people play… Never meaning what they say, never saying what they mean,” might appreciate our suspicion that the composer, Joe South, was an employment lawyer bemoaning the positions of some employers.

In our practice, we consistently run across employers who simply are not getting the message. When you terminate an employee, you have to pay them reasonable notice.

We have written about this frequently, and yet, in the last two months alone, we have settled many cases where the employer simply terminated an employee with completely inadequate notice and severance.

Employers have to realize that the law specifically recognizes that employment contracts, written or unwritten, are treated differently under the law in Ontario — and the rest of the country for that matter. The courts recognize that in an employment situation, the employer typically has all the power, not the employee. As a result, to correct this perceived imbalance, the law is biased in favour of the employee.

If an employer provides inadequate notice, or attempts to allege cause — particularly after acquired cause (i.e., cause learned after the fact, without merit) — they are going to get a rude awakening if their case goes to court.

Likewise, if the employer treats the employment contract like any other contract with a vendor or a supplier, they are going to have a shock. The courts treat employment contracts very differently than they treat commercial contracts. Any ambiguity in an employment contract will be construed against the employer, and if a term that is otherwise not favourable to an employee could potentially run afoul of the Employment Standards Act it will be discarded altogether.

When an employer pays notice they must pay all — salary, benefits, bonus, etc. — that would otherwise be paid during the notice period. This includes shares, options, restricted share units and any other benefit that vests during the period.

Notice periods are becoming longer. Only three years ago, the maximum notice that an employee could expect to receive was twenty-four months, in the absence of special circumstances. However, several recent cases have awarded more than twenty-four months and been approved by the Court of Appeal. We predict the law will continue to evolve to favour employees.

None of this is new or particularly controversial. All the above developments are now well grounded in the law.

So why then do we still see employers offering inadequate notice, not paying all of the employees’ remuneration during the notice period or alleging baseless claims of “just cause” for dismissal and the like?

The main reason is money. In some cases, the employer is counting on the employee not knowing their rights. In other cases, the employer may be trying to “grind down” the employee, counting on the excessive costs of litigation to prevent the employee from pursuing their rights.

These days such tactics are usually a false economy. Employees are more aware of their rights than ever before. If they aren’t, there are a plethora of lawyers who will cheerfully inform them. Most employees these days are at least sophisticated enough to contact a lawyer.

Poor behaviour by employers usually backfires. The employer ends up paying the employee what they should have in the first place, along with their own legal fees and a portion of the employees’ costs, not to mention the potential for additional damages.

In a lot of cases, if the employer had made a reasonable offer to begin with, the employee would have taken it and much money would have been saved all around.

In the examples mentioned above, the employers were all large, sophisticated organizations, and yet they still did not pay the appropriate notice to the departing employee. We effected settlements that resulted in substantially more money being paid to the employee than was originally offered.

One of the reasons for that was, once confronted, the organizations hired good outside lawyers who, with a little prodding, agreed that what had originally been offered was insufficient — otherwise the employee might not have retained us to look at their severance package.

Take it from us, if you are an employer, you do not want us hired for such a reason. It is usually going to cost you money. You are better served by offering a reasonable settlement package, and if you are uncertain what that should look like, then do what your employee is going to do — call a good lawyer and get some advice.