Best Practices for Employers Managing Dismissals in Canada: Five Key Takeaways

Managing employee dismissals in Canada requires employers to navigate a complex web of statutory requirements, common law (or civil law) principles, and human rights obligations. Whether an employer is preparing for a without-cause dismissal, considering a just-cause dismissal or planning a large-scale workforce reduction, understanding the legal framework and following best practices is essential to minimizing risk and ensuring compliance with applicable law.

Below are five key takeaways to help employers navigate employee dismissals in Canada:

1. Without-Cause Dismissals. Employers in Canada are generally permitted to dismiss employees without cause, provided the employee receives reasonable notice or pay in lieu of notice. Notice requirements are established by applicable statute, common law (or civil law in Quebec), and, potentially, a valid written employment contract. 
2. Just-Cause Dismissals. Employers are permitted to summarily dismiss an employee without any notice where the employee’s conduct amounts to just cause. The threshold for “just cause” varies by jurisdiction, and the standard is different under statutes and the common law. Generally speaking, to strengthen a just-cause position, employers should investigate thoroughly, apply proportional discipline, provide clear warnings and opportunities to correct the conduct where appropriate, and document every step of the progressive discipline process.
3. Performance Management and Recordkeeping. Whether proceeding on a without-cause or just-cause basis, it is important to have clear records related to the decision. Employers should maintain written records of any performance reviews, performance improvement plans (PIPs), warnings, coaching notes and the reasons for any dismissal, as these documents could be critical if the matter ends up in litigation or the subject of a human rights complaint.
4. Leaves of Absence and Accommodations. Employers cannot dismiss an employee because they took a protected leave of absence, though a termination may be lawful if entirely unrelated to the leave (e.g., a bona fide restructuring). An accommodation request does not make an employee immune from dismissal, but the employer must ensure compliance with applicable human rights legislation.
5. Resignations. A valid resignation must be voluntary, clear and unequivocal. If a resignation follows an ultimatum from the employer, it is generally not voluntary and may be viewed as constructive dismissal. If an employer unilaterally waives a resignation notice period or sets an alternate resignation date, it may trigger termination entitlements.

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