CHAUDHRI: Your employment questions answered
Spring is marked by elements of unpredictability that have created many new, pressing employment issues
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Spring is here, cities are shrugging away winter sleep, and more and more people are returning to work.
The new season, though, is marked by elements of unpredictability. The rising cost of living and a roller-coaster labour market have created many new, pressing employment issues.
Below are some of the most popular questions I have received this season:
Q. Our company is in the middle of a restructure and we are right-sizing some departments. We are letting some redundant employees go and are applying a formula to make each separation offer fair across the board. Could an employee still legally challenge the offer on termination?
A. Yes. A company’s individual financial circumstances are not a factor in considering an appropriate notice period for terminated employees. Using a formula approach on terminations may help organizations to limit internal bias, however, entitlements on termination are virtually always specific to each employee’s individual situation.
Q. Our company wants to update our employment agreements. Several employees are receiving promotions this summer. Could we roll our new employment agreements together with the promotions?
A. Yes, promotion offers can be a good time to update employment agreements. To enforce any contract, a benefit needs to flow both ways, to both parties. To make the agreements stick, ensure the new contracts offer some new benefit to each employee (i.e. a raise). Require employees to accept the terms of the contract as a condition to accept the promotion. Many employers do not make promotions conditional on accepting new terms, which can impact the enforceability of a new contract.
Q. We are hiring a new sales director and have made an offer to our top candidate. He has come back with many proposed revisions to the contract. A key ‘strike out’ was our termination clause. We are struggling with a strategy to respond. What happens if we agree to striking out some of terms like the termination clause?
A. If you agree to strike out portions of your contract, that means the contract is silent to those issues and the common law would apply instead. On a termination, the common law test to be applied would be how long it would take an employee to find a similar job at a similar level of pay. This, of course, can be considerably longer than what was offered in your contract. Some employers work to find a middle ground with key employees they are keen to hire.
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Q. On a termination, we have an employee that is trying to negotiate a higher severance package. While negotiating some of the requests, we have kept the employee on salary continuance. Are there any issues with this approach?
A. There could be. Provincially regulated employees in Ontario are entitled to the full payout of their Employment Standards Act minimums by the next payroll or within two weeks of the termination, which ever is later. A salary continuance could delay these minimum payments, which is a violation of employment legislation.
Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.
The content of this article is general information only and is not legal advice.
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