Employee Resignations: The Basics

In the world of employment law, terminations tend to steal the spotlight. But what about when the employee is the one ending the employment relationship?

Employee Resignations: The Basics

Here is an overview of the law of resignation, and what employers need to know when they receive an employee’s “two weeks’ notice”. 

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It’s All in the Timing: The Best and Worst Times to Terminate Employees

The English magician Tony Corinda once said: “Good timing is invisible. Bad timing sticks out a mile”. As employment lawyers, we talk a lot about the “why”, “what” and definitely the “how much” of terminating an employee, but the “when” is a sometimes overlooked aspect. Some termination timing issues are a question of best practice or common courtesy, while others can attract significant legal liability and can be costly for employers. An employee who is being terminated may not recognize an employer’s considerate timing, but they will certainly recognize inconsiderate timing, and this will make everything go a lot less smoothly. 

It’s All in the Timing: The Best and Worst Times to Terminate Employees

When should you not terminate an employee? 

Discrimination 

It is contrary to the Ontario Human Rights Code (the “Code”) to terminate or otherwise discriminate against an employee because of a protected ground. The protected grounds under the Code are citizenship, race, place of origin, ethnic origin, colour, ancestry, disability, age, creed, sex/pregnancy, family status, marital status, sexual orientation, gender identity, gender expression, and record of offences. 

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Learning Lessons from OpenAI’s Pitfalls: Preparing for the Potential Ripple Effect of Terminations

Earlier today we learned that Sam Altman, CEO of OpenAI the company behind ChatGPT, was returning to his post as CEO, bringing a captivating story to a close (well at least for now).

In case you missed it, the company dismissed Altman on Friday. The company provided few details on its decision to terminate Altman beyond citing a lack of candour on his part when communicating with its Board.

Learning from OpenAI’s Pitfalls

Over the weekend we learned that following a failed attempt at reinstatement, the former CEO had agreed to join the company’s financial backer, Microsoft. Altman was joined at Microsoft by other executives and management who quickly exited the company following his termination. While Microsoft welcomed the employees, it also publicly left the door open for Altman to return to his former company. 

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Practical Tips and Tricks for Navigating the Arbitration Process 

This is the third entry in our blog that focuses on the topic of labour law. In case you missed it, you can find the first entry here and the second entry here. In this blog, our focus is to share Practical Tips for Arbitration Navigation.

I’ve Just received a Notice of Arbitration: Is it time to Panic?

The short answer to whether you should panic is: no. It’s important to understand, especially if you’re just beginning your labour journey, that arbitration shouldn’t be feared. However, it is important to carefully consider and understand the process and potential outcomes of proceeding to arbitration.

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Employers Can Create Win-Win Scenarios by Facilitating Re-employment for Ex-Employees

Common Law Notice 

Upon termination of employment, if an employee’s contractual entitlements are not nailed down in an up-to-date and enforceable employment contract, the employee is likely entitled to common law reasonable notice (or pay in lieu of notice) of termination. Even if an employee’s entitlements are set out in an employment contract, it is common these days for employees, on the advice of employment law counsel, to claim that some of the contract’s termination-related provisions are not Waksdale-proof, and are therefore unenforceable. (We discuss how employers can make their contracts Waksdale-proof in this blog, and best practices for rolling out updated contracts in this blog). Under both scenarios, any path to resolution will start with an assessment of the common law notice period.  

Employers Facilitating an Ex-Employee’s Re-Employment Create a Win-Win Scenario

Courts consider several factors in determining an employee’s common law notice period (i.e. the number of weeks or months of pay to bridge the employee until their next role). The primary factors are known as the Bardal factors: 

  1. the employee’s age; 
  2. their length of service; 
  3. the character of their employment (i.e. the seniority/level of responsibility of their role); and 
  4. the likelihood of finding comparable employment (i.e. an assessment of the job market). 

A simple way to understand the common law notice period is to conduct a thoughtful and informed analysis of how long it will take the employee to re-employ in a comparable role. 

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The Power of An “If You Get Another Job Clause”

termination clawback clauseIn recent months, we have seen a spike in group terminations. For HR professionals this often means a packed schedule of the worst-of-the-worst meetings. In our recent blog post, we discussed terminations with softer landings (and less chance of disputes and litigation), and bigger-picture best practices for those difficult exits. In this blog, we zero in on an aspect of severance package drafting.

In the process of structuring severance packages for (too many) employees, we’ve noted that some employers have forgotten about a handy clause that can lead to a win-win post-termination scenario for both employers and employees. However, the clause gets a bad rap because it is colloquially known as a “clawback clause” and can be misinterpreted as a sinister employer strategy.

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