The legal aspect: before termination
Before proceeding, it is essential to ensure the legitimacy of the termination. To do so, you must first distinguish between layoff (licenciement) and dismissal (congédiement). While these terms are often used interchangeably, they have distinct meanings.
A layoff occurs when an employer permanently ends an employee’s position due to reasons such as:
- Economic reasons – Financial difficulties leading to staff reductions, position eliminations, or company restructuring.
- Organizational reasons – Corporate restructuring resulting in job cuts or departmental closures, such as automation rendering certain roles redundant.
A dismissal, on the other hand, is linked to the employee’s inability to meet job expectations (e.g., poor performance, lack of skills) or disciplinary reasons (e.g., misconduct, policy violations, repeated infractions, serious offenses). In both cases, proper documentation is key. It is crucial to record performance issues, disciplinary actions, prior warnings, and corrective measures taken. This ensures the legitimacy of the decision in case of legal disputes. When misconduct is involved, implementing progressive discipline is essential to demonstrate a fair and proportional approach while giving the employee an opportunity to improve.
The human aspect: during termination
Even if the termination is justified, it is rarely an easy process and often carries risks. No matter how uncomfortable it may be for you, it is even more distressing for the person receiving the news. To handle the situation with empathy and professionalism, deliver the news in person whenever possible. Clearly explain the reasons for the termination and allow the employee to ask questions. However, avoid unnecessary details—too much information can be as unhelpful as too little.
The administrative aspect: after termination
During the termination meeting, ensure that all company property is collected (e.g., keys, credit cards, laptops, phones) and that the employee’s access rights are revoked (e.g., email accounts, building access cards). Escort the employee to their workspace to monitor the retrieval of personal belongings and ensure only authorized items are taken. Finally, accompany them to the exit to maintain security and prevent any disruptions.
Employment termination notice
When terminating an employee, you must comply with minimum notice periods as outlined in labor laws. The required notice period depends on the employee’s length of service:
- Less than 3 months: No notice required
- 3 to 12 months: 1 week’s notice
- 1 to 5 years: 2 weeks’ notice
- 5 to 10 years: 4 weeks’ notice
- 10+ years: 8 weeks’ notice
Employers can choose whether the notice period is worked or paid. If the employee is not required to work the notice period, they must receive financial compensation equivalent to the notice period.
It is important to note that notice is not always required, particularly in cases of dismissal for just cause. Labor laws specify that an employer is not obligated to provide notice when an employee is dismissed for serious misconduct, which may include:
- Gross misconduct (e.g., theft, fraud, violence, harassment, severe insubordination)
- Repeated violations of company policies despite prior warnings
- Significant professional negligence
- Serious misconduct causing harm to the employer or colleagues
To minimize risks, ensure compliance with legal obligations and anticipate potential challenges, it is always advisable to consult a professional before terminating an employee.
Record of Employment (ROE)
Once an employee's salary payments stop, the employer has 5 to 15 calendar days to issue a Record of Employment (ROE). The deadline depends on the method of submission to Service Canada (paper or electronic) and the pay frequency (weekly, biweekly, or monthly). For further details, refer to the Government of Canada’s official website.
Outstanding payments
Upon termination, or on the next payroll cycle, employers must settle all outstanding amounts owed to the employee. This includes:
- Regular salary
- Overtime pay
- Accrued vacation pay (4% or 6%)
- Notice period compensation (if applicable)
Work certificate
If requested, the employer must provide a work certificate to the terminated employee. This document includes the employer’s name and address, as well as the employee’s job title and length of service. However, it is not a recommendation letter and does not include performance assessments.
Final thoughts
Terminating an employee is a sensitive process that requires fairness, professionalism, and careful planning. Beyond the legal and administrative obligations, a respectful and well-communicated approach helps preserve professional relationships and maintain the company’s reputation. Proper documentation and professional consultation minimize legal risks and ensure compliance with labor laws. Additionally, adhering to post-termination requirements—such as issuing the Record of Employment, settling outstanding payments, and managing access rights—helps prevent disputes. By following these best practices, you can ensure a smooth transition while safeguarding your organization’s interests.
Would you like to discuss or seek assistance from an expert regarding an employee layoff or dismissal to ensure a compliant, structured, and respectful process while assessing the impact of these decisions on your organization? Contact us today to learn more about our HR consulting services and discover how we can support you.
