If an employer fires or lays off an employee, that termination of employment will either be for “just cause” (a legally valid reason for terminating the employment contract), or without just cause.
You may be surprised to learn that, provided that there is no Human Rights Code violation, an employer is entitled to terminate an employee without any just cause to do so. However, whether or not there is just cause to fire an employee can have significant financial repercussions for both the employer and employee. What constitutes just cause is unique to every employment relationship; depending on the facts, one serious infraction, a series of infractions, or unsatisfactory performance may amount to “just cause”. However, unless the employee has done something intentionally wrong, it is often quite difficult for an employer to prove that “just cause” exists.
If an employee is fired for just cause, then the employer has no obligation to provide advance notice of termination, termination pay or severance pay. The employer’s only obligation will be to pay the employee whatever the employee has already earned, as of the date of termination.
However, if a worker is terminated from employment without just cause, then that employee is entitled to advance working notice of the termination. How much notice (how long a period of time) is required will be determined by the employment contract. If there is no written contract, or if the contract says nothing about the amount of notice that is required, the law provides that an employee is entitled to “reasonable notice” in advance of the termination. What is “reasonable” depends on the specific employment situation. If an employee is dismissed without just cause and without the required advance notice, this is a breach of the employment contract. This situation is commonly referred to as “wrongful dismissal”.
In reality, most employers will not give notice of dismissal. Instead they will usually offer the employee “severance pay”, instead of employing (and paying) the employee during the notice period.
If an employee is dismissed without just cause and without reasonable notice (or reasonable severance pay), the employee will be entitled to damages. These damages will include the value of whatever salary and benefits the employee would have earned over the appropriate notice period, if it had been provided. This entitlement to damages for wrongful dismissal will often be greater than what the employer offers as severance pay.
There are many factors at play, and if you think you have been fired or laid off without reasonable notice or severance pay, you should consult an experienced employment lawyer.