If you are a business owner contemplating terminating an employee’s contract but don’t know how to proceed, this article is just for you. In this blog post, we will draw out a comprehensive guide that will help you sail through the termination of an individual’s employment with ease!

So, without further delay, let’s embark on this journey together and bid farewell to termination troubles!

Understanding Employee Contract Termination: Likely Causes

Before we dive into the employee termination checklist, it is only fair to look at what employee contract termination is and the likely causes.

Terminating an employee’s employment contract can be seen as the cessation or conclusion of the employer-employee relationship, resulting in the employee no longer being bound by the terms and conditions of their original employment agreement.

However, it should be noted that terminating an employee’s employment is a very significant decision with legal and ethical implications. This is because, just like employers, employees also have rights and legal backing that safeguard them from illegal firing and all other work-related issues. So now, as an employer, you can’t just wake up one day and decide to go on a sacking spree; you need to have genuine reasons for doing that.

And so, in the remainder of this section, we will look at some factors that could cause an employee’s employment contract to be terminated.

1. Poor Performance: One of the most common causes of employment termination is when an employee performs poorly at his or her place of work. If an employee consistently fails to meet the expected job performance standards despite receiving adequate training and support, the employer may decide to terminate their employment.
2. Misconduct: Terminating an employee’s employment contract can also occur due to serious misconduct, such as theft, fraud, harassment, violence, or other unethical behaviour.
3. Violation of Company Policies: If an employee violates a company’s laid down rules and regulations, they could get sacked. While this is even the least severe punishment, in some severe cases, an employee who breaches a company’s policies, rules, or codes of conduct may even get arrested if the violations significantly impact the organisation or its employees.
4. Insubordination: If an employee consistently refuses to follow instructions or demonstrates a lack of respect towards their superiors, they could be subject to termination.
5. Corporate Restructuring or Merger: Even though this is not the employees' fault, during a corporate merger, acquisition, or restructuring, an employee’s employment contract may be terminated.

The Employee Termination Checklist

As we said earlier, terminating an employee’s employment contract is a delicate situation that, if not handled properly, can have legal and ethical implications. Therefore, as an employer, before you sack any of your employees, there are various things that you have to do first and foremost.

1.     Have Genuine Reasons for the Termination:

Much has already been said about this in the earlier sections. As a business owner or decision-maker, you can’t just decide to sack your employees randomly. It is neither ethical nor legal. So, if you are contemplating terminating an employee’s contract, ensure the reason is valid and not discriminatory. For instance, you have the legal right to dismiss an employee if they are not performing well or if he or she does something that goes against the company’s laid-down rules and regulations.

2.     Review the Employment Contract and Policies:

If you have found a just cause to dismiss the employee, the next step would be for you to examine the employment contract and company policies to ensure compliance with termination provisions and procedures. This step helps prevent potential breaches and ensures adherence to agreed-upon notice periods.

3.     Provide Written Notice or Pay in Lieu:

If you are a business owner in Canada, before you terminate the contract of an employee, you have to provide written notice or pay in lieu of notice to the employee being terminated. It should, however, be noted that the notice period varies based on the employee’s length of service and the province. Failure to do this can lead to claims for wrongful dismissal.

4.     Calculate Severance Pay (if applicable):

If the employee is entitled to severance pay, ensure that it is calculated correctly. Severance pay in British Columbia is based on the employee’s years of service and the number of employees being terminated.

5.     Prepare a Termination Letter:

Draft a concise termination letter outlining the reason for termination, the effective date, any entitlements, and contact information for further inquiries. After you have prepared the letter, the next step would be to deliver the news to the affected employee(s). The most respectful and compassionate way to deliver such news is to privately meet with the employee.

6.     Recover all Company Property:

After you have delivered the news to the affected employee, the next step would be to retrieve all company property, including documents, access cards, electronic devices, etc. You should also revoke the employee’s access to the company’s database, computer network, etc.

7.     Inform Payroll and Benefits Departments:

Normally, you don’t want to pay someone not working for you. So after you are done terminating an employee’s contract, the next thing to do is notify your company's payroll and benefits departments to stop salary payments, deductions, and benefits for the terminated employee.

8.     Final Pay Cheque:

While it doesn’t make sense to keep paying someone who is not working for you, neither does owning a sacked employee make sense. Our point here is that after you have dismissed an employee, ensure that you calculate and give them the final paycheck, including any unused vacation pay or other outstanding entitlements.

Conclusion

Employee termination is a complex and sensitive process that requires employers to stay well-informed about federal and provincial laws governing employment termination in Canada and in specific provinces like British Columbia.

Having a lawyer review or create your employee termination checklist is key when dealing with delicate matters such as terminations to ensure all relevant federal and provincial laws are properly followed. The lawyers at Stevens and Company Law Corporation can assist you in ensuring that your employee termination checklist is implemented most efficiently while remaining compliant with applicable labor laws. Contact our experienced employment lawyers at 1-250-248-8220 today for a free consultation!