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Employment Task-Line Creating a Termination Package

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Employment Task-Line Creating a Termination Package Employment Task-Line Creating a Termination Package Topic Covered: Employment: Termination Scenario: Creating a Termination Package A client has decided to terminate a non-unionized employee. The employee’s position has become redundant and the client has decided to terminate the employment relationship. The client has asked you to create a termination package to offer to the employee. The client needs help understanding employee entitlements that must be addressed in the package. The client has also asked for a letter to provide to the employee explaining the termination, and providing details regarding the package being offered in exchange for a release of employment claims. Employment Task-Line: Creating a Termination Package START Assess the reason for termination. Confirm that the termination is without cause. 1 Resource: Assess possible liability risks related to the • Structuring the Termination Package: termination, including discrimination, reprisal, Reason for Termination (Practice Note) protected leaves, unfair employer conduct or unjust dismissal. 2 Resources: • Structuring the Termination Package: High Risk Terminations (Practice Note) Review the employee’s employment contract to • Unjust Dismissal: Overview (Federal) determine whether the employee was employed (Practice Note) under an enforceable fixed term, or for an 3 indefinite term. Resource: • Fixed-Term Contracts (Practice Note) Review the employee’s employment contract for a termination clause setting out termination entitlements. 4 Resources: If the employee’s termination entitlements are • Termination Clauses (Practice Note) not limited to contractual amounts, determine • Reviewing a Without Cause Termination the common law reasonable notice period or Clause Checklist remaining fixed term. 5 Resource: • Reasonable Notice of Termination: Overview (Practice Note) Calculate the employee’s damages (wages, bonus, stock options, benefits, etc.) during the common law or contractual notice period, or remaining fixed term (unless the employment 6 Determine the employee’s statutory minimum contract provides for a single lump sum). standards entitlements. Assess whether mass Resource: termination obligations are triggered. • Calculating Wrongful Dismissal Notice Resources: Damages (Practice Note) • Reasonable Notice of Termination: 7 Overview (Practice Note) • Severance Pay (Minimum Standards) (Practice Note) Determine employee’s total common law, • Group/Mass Termination (Minimum Standards) contractual and statutory entitlements. (Practice Note) 8 Resource: • Structuring the Termination Package: Determining Liability (Practice Note) CONT. CONT. Review notice and payment options with the Draft the termination letter, including an client including working notice, lump sum, explanation of the termination package to salary continuance or a combination of these. be offered in exchange for a release of Ensure minimum statutory entitlements are 9 employment claims. to be paid separately from amounts offered in exchange for release. Resources: • Drafting the Termination Letter (Practice Note) Resource: 10 • Structuring the Termination Package: Method of • Various standard termination letters (see Structuring the Notice Period (Practice Note) Termination Letter Toolkit) Review the termination letter and release with Draft the release of employment claims. the client. Review the client’s preparation for Resources: the termination meeting and post-termination 11 • Release of Employment Claims (Practice Note) follow-up. • Release (Lump Sum) (Standard Document) Resources: • Release (Salary Continuance) • Employee Termination Best Practices Checklist (Standard Document) • Dealing with the Violent Departing 12 Employee Checklist • Confidential Information Best Practices at End of Employment Checklist If the employee accepts the termination package, • Information Technology Best Practices at take required steps to ensure execution of release End of Employment Checklist and payment of termination funds. 13 Resources: • Releasing Termination Funds Checklist If the employee does not accept the • Structuring the Termination Package: termination package, assist the client in Termination Package Settlement ongoing negotiations for a final package, or in (Practice Note) 14 preparation for wrongful dismissal litigation. Resource: • Structuring the Termination Package: Termination Package Settlement CLOSE (Practice Note) Challenges Managing Client Expectations Client’s Budget Expertise The client expects a high quality work Despite the large number of issues to be Counsel’s role in creating a termination product to be produced quickly. A surveyed, a termination package may package involves more than surveying termination may be time-sensitive not have a high monetary value. The and drafting relevant documents. due to the client’s desire to onboard client will expect the cost of the work Counsel may need to survey the client’s a replacement, an approaching sale to be proportionate to the value of the reasons and plans for carrying out the of business, employee compensation termination. Counsel should use junior termination to ensure hidden liabilities timing, or for any number of other associate and student time to lower are not triggered. To prepare for reasons. Counsel must work efficiently to the cost to the client, so long as client communications with the client, counsel reduce a complex history of employment does not pay for on-the-job training. may need to quickly refresh him/herself into a termination package in a short Associates and students should be given in best practices related to terminations. period of time. the tools they need to produce high quality work at a low cost. Resources Practice Notes • Termination Letter (Minimum Standards Only) • Extraordinary Damages: Overview • Termination Letter (Multiple Options) • Just Cause Dismissal: Overview • Termination Letter (Salary Continuance) • Reasonable Notice of Termination: Overview • Termination Letter (Working Notice and Lump Sum Payment) • Unjust Dismissal: Overview (Federal) • Termination Letter (Working Notice and Salary Continuance) • Calculating Wrongful Dismissal Notice Damages • Termination Letter (Working Notice) • Deducting Collateral Benefits from Checklists Wrongful Dismissal Damages • Conducting a Group/Mass Termination Checklist • Drafting the Termination Letter • Confidential Information Best Practices at • Group/Mass Termination (Minimum Standards) End of Employment Checklist • Mitigation of Wrongful Dismissal Damages • Dealing with the Violent Departing Employee Checklist • Notice of Termination (Minimum Standards) • Employee Termination Best Practices Checklist • Release of Employment Claims • Information Technology Best Practices at • Severance Pay (Minimum Standards) End of Employment Checklist • Structuring the Termination Package • Reference Chart: Calculating Termination Pay • Terminating an Executive: Key Compensation and (Minimum Standards) Benefits Issues • Reference Chart: Group/Mass Termination Notice Period • Termination Clauses (Minimum Standards) Standard Documents • Reference Chart: Notice of Termination (Minimum Standards) • Continuing Obligations Letter (Departing Employee) • Releasing Termination Funds Checklist • Continuing Obligations Letter (New Employer) • Reviewing a Without Cause Termination Clause Checklist • Letter Offering Work in Mitigation of Damages Toolkits During Notice Period • Termination Letter Toolkit • Letter Requesting Employment Insurance • Wrongful Dismissal Toolkit Overpayment Information Articles and Legal Updates • Letter Serving Notice and Offering Employment on New Terms • Ontario Court of Appeal Brings Clarity to Termination Clauses • Release (Lump Sum) • Webinar: Managing Wrongful Dismissal Risk • Release (Salary Continuance) • Another Reminder That Fixed-Term Contracts Can Prove Costly • Termination Letter (Contract with Termination Clause) • Employer Financial Troubles Do Not Reduce Notice Period • Termination Letter (Just Cause) in Ontario • Termination Letter (Lump-Sum Payment) ABOUT PRACTICAL LAW CANADA Practical Law Canada helps lawyers increase efficiency, serve clients and business partners more effectively, tackle unfamiliar topics, and keep up with legal developments. Our expert team of lawyer- editors creates and maintains up-to-date, practical resources that reflect the latest law and practice. To get full access to the resources listed above, request a free trial at www.practicallaw.ca. 00245XM-E125226-88123-NK MM1B 07/17 Printed in Canada.
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