An important decision was made recently regarding terminating an employee in Ontario.
The issue revolved around whether or not an employer can provide “working notice” of termination to an inactive employee, i.e., an employee who is no longer able to perform their workplace duties.
The case was fairly straightforward. Two unionized employees became permanently disabled while still working for an organization. Their employer then took steps to terminate them because they could no longer perform their job tasks. Both employees were paid out their severance pay entitlements and given their notice of termination.
However, instead of paying the employees wages in lieu of notice, the employer provided them with “working notice,” i.e., the option to continue working and being paid until their termination took effect. And since obviously the disabled employees were unable to continue working, the union challenged this decision. The union asserted that although they were unable to work, the employees were entitled to be paid during the statutory notice period.
But the grievance was dismissed. The Arbitrator held that an entitlement to statutory termination pay during the notice period requires the employee to actually perform the work (unless their contract of employment says otherwise). Since neither employee worked during the notice period, the employer was not obligated to pay their wages.
Ultimately, the law on this issue is still somewhat unclear. This is the first decision since the Employment Standards Act, 2000 was enacted that explicitly addresses whether an employer has the right to provide working notice to an inactive employee. Though the decision is undeniably a positive development for employers looking to terminate employees that are unable to work over their notice period.
That being said, as an employer, it’s still highly important to comply with any severance pay obligations when you dismiss an employee.
Want to learn more? Contact Employment Professionals Canada today!