Sunday 7 February 2016

Want to Wrongfully Dismiss an Employee? There’s an App for That!

Can I interest you in an app that will almost invariably get you sued? I doubt it.

It has been my experience as a litigator that few people want to be involved in a lawsuit. It has also been my experience that most people do not want to break the law. Most employers are not interested in either wrongfully dismissing one of their employees or dealing with the fallout once they do. So why would anyone be interested in an app that almost invariably ensures both a wrongful dismissal and a letter from someone like me?

The unfortunate and frustratingly ironic reason that so many employers use an app almost guaranteed to get them sued is that the app is ostensibly designed to do the opposite.

So what app am I talking about? The “Severance Pay Calculator” put out by, of all people, the Ontario Ministry of Labour.


For those who have not been through this process before, a brief word of context. As I explain more fully on my page What is Wrongful Dismissal?, at Ontario law “wrongful dismissal” has nothing to do with the reason for termination and has everything to do with the amount of notice of termination provided to the employee.

Moreover, as I explain on my page Not All Employees are Entitled to Severance, contrary to common belief, not all employees who lose their jobs are entitled to severance pay.

If all of this is confusing already, let me say that the resources put out by the Ministry of Labour will not make matters any better. In fact, I would argue that they make matters worse for both employers and employees.

As we move forward simply remember this: an employee whose employment is ended by the employer is typically owed “notice” of termination. The failure to provide enough “notice” is “wrongful dismissal.”

Calculating Reasonable Notice

So how does one calculate “reasonable notice”? Well, see, we’ve already confused things because I told you that I did not like the “severance” calculator. At Ontario law “severance” has two meanings: (1) it is a defined term in the Ontario Employment Standards Act, 2000; and (2) it is commonly used by just about everyone, including the media, to mean “pay in lieu of notice.” For a discussion of the difference between those terms, have a look at the page Not All Employees are Entitled to Severance, it will explain what I mean.

Alright, so we need to calculate “notice” of termination. A logical starting point would be to see what the Ministry of Labour has to say about things, right? Wrong.

If one were to google “Ontario Ministry of Labour Severance Calculator” this is what would happen: Google Search: Ontario Ministry of Labour Severance Calculator. Google will provide you with a link to a page on the Ontario Ministry of Labour website.

At this point most employers are thinking, “Great, this will be easy.” Stay with me.

The Disclaimer

Before moving on to the tool visitors have to click through a disclaimer. My sense is that most people treat this disclaimer like they do all others: they ignore it. To the Ministry’s credit, they do provide some warning that the information that they are about to provide is not only useless, it is dangerous, but they don’t come right out and say that. What they do say is the following:

This calculator/tool is being provided for general illustrative and informational purposes only. It does not generate an Employment Standards Claim nor will it prompt an investigation by the Ministry of Labour. If inaccurate information is entered, this calculator/tool will produce a different result than an investigation by the Ministry.

This calculator/tool is not intended to provide specific advice or recommendations in any circumstances. It may not cover aspects of your particular situation and an investigation by the Ministry could produce a different result. The Ministry does not retain any of the data entered into the calculator/tool, all data remains on the user's computer.

The Employment Standards Act, 2000 (ESA) provides minimum standards only. Some employees may have rights under the common law that gives them greater rights than under the ESA. Employers and employees may wish to obtain legal advice.

The Ministry assumes no responsibility for any errors or omissions within the calculator/tool. The Ministry makes no representation or warranty of any kind whatsoever with respect to this calculator/tool. Under no circumstances shall the Ministry be held liable for any loss or damage (including any type of damage), which may be attributable to the reliance on and use of the calculator/tool.

Did you catch all of that? How about the most important part of the entire disclaimer? “Some employees may have rights under the common law that gives them greater rights than under the ESA.

To say that “some” employees have rights under the common law is a little misleading. All employees have rights under the common law; not a few, not some obscure group, every, single, last employee has rights under the common law. Which means that what this disclaimer should really say is something to the effect of the following:

The Employment Standards Act, 2000 (ESA) provides minimum standards only. As all employees have rights under the common law, which typically gives them greater rights than under the ESA, employers and employees should obtain legal advice.

Nowhere does the disclaimer say this: “The information that you are about to receive is in respect of minimum entitlements only. Unless you have a legally binding, written employment contract, your employees will be entitled to more than the minimum amounts set out in this calculator. Ignore this information, it will get you sued if you rely on it.”

Don’t Believe Me? Try it for Yourself

By this point, if you are not an employment lawyer, you are probably thinking something to the effect of, ‘This cannot be correct. The government knows the law and would not put out information that would get me sued. This guy is just trying to sell me his services.’ True, I am trying to sell you my services, but right now you’re on a website. I don’t know who you are and you are free to leave without doing anything more.

But before you give up on this information let’s try an experiment. I’ll give you some basic information, you put it into the calculator and let's see what happens.

John worked for his employer for 51 weeks as an engineer making $95,000 a year base salary. His employer decides to let him go for business reasons. How much notice of termination and/or severance is he entitled to?

If you use the Ontario Ministry of Labour Severance Calculator the answer will be one week of notice, plus nothing for severance.

So what happened when the employer tried to give John that much? It got sued.

How much notice was John entitled to? According to an Ottawa judge, four months! (Roughly 16 times what the Ministry would have told the employer!)

How do I know this? Because I represented John and I am tooting my own horn. (See more here: ONSC Awards Four Months Notice to Employee With Less Than One Year of Service.)

So What Should Employers Do?

Remember when I said that I was trying to sell you something? I am. The fact is that if you are an employer thinking about letting an employee go, and you have not done it before, you should speak with an experienced employment lawyer. Will it cost you money? Most likely. Will it cost you less money to speak with a lawyer before you try and do this on your own? Almost certainly.

As an experienced employment lawyer should tell you, there are a lot of ways to end an employee’s employment. There are ways to mitigate the damage and there are ways to limit employees to no more than the minimum amounts prescribed by the ESA. All of that work must be done proactively. There is an upfront cost, but it is almost always worth it. Consider the case of John: had his employer used an employment lawyer and bought a written employment agreement it could have saved itself a ton of money.

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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.

1 comment:

  1. Very interesting to read and funny that a term can have such a different meaning in another state.