Howard Levitt
National Post
Wednesday, August 22, 2007
Most of us are either an employer or employee. And in my experience, both often tenaciously grasp to false convictions about their rights or obligations. Here are some questions I am frequently asked that display the broad verisimilitude of the workplace trenches:
Notice of resignation Even without a contract saying so, employees are required to provide notice of their departure date, otherwise the employer can sue for any economic loss it suffers from lost productivity, reduced sales, missed opportunities, during that time. There is no formula for the amount of notice an employee must provide. Rather, it is a function of how long it realistically would take to find a suitable, trained replacement. A few years ago, two or four weeks would generally suffice. But today, with unemployment near record lows and employees in many parts of Canada able to secure multiple job offers in record time, it is measured in months. If notice is provided and the employer asks the employee to leave immediately what are the employee's rights? Assuming the employee did not provide notice to avoid imminent dismissal for cause, generally the answer is yes, unless the employee has access to confidential information and is joining a competitor. In that case, the employer can bid them adieu forthwith, without providing severance.
Bonuses Is a bonus discretionary? That depends on the language of the bonus plan or, if there is none, the practice of the employer. Sometimes bonuses termed "discretionary" in a plan are found by the courts to be anything but. If a company provides a bonus based on certain criteria, the courts have said it must apply that criteria "reasonably" and fairly between employees. Sometimes, even if the criteria is not set out, the courts will impute what the bonus should be from previous practice. For bonuses to be genuinely discretionary, employers should not provide them annually and/or should regularly change the criteria for how they are awarded. The same principles apply as to whether an employee can sue for a bonus as part of wrongful dismissal damages.
Seniority In a non-union environment, employees have no complaint of being "laid off" despite having the longest service. Even in a unionized workforce, seniority has no inherent relevance unless it is negotiated into the collective agreement. However, since it is invariably unions' primary demand, few employers negotiate it out of the agreement.
Layoffs While employment standards legislation recognizes employers' right to layoff staff temporarily without triggering a dismissal, the courts take a different view. Unless the employer has an announced policy of temporary layoffs or it is in an industry characterized by temporary layoffs, a layoff is a constructive dismissal. Employees can either take the position it is a dismissal and sue accordingly or remain employed but sue for wages for the entire period of the layoff.
References Employees have no inherent right to a reference. However, if the court decides they deserved one, or at least a more fulsome one than "name, rank and serial number," it will increase the severance award accordingly. Employees generally cannot sue for false and misleading references unless they can show negligence or malice.