A termination is the end of an employment relationship and is more commonly referred to as a firing or layoff. While much of the attention surrounding terminations focuses on severance obligations, how a termination is handled can be just as important.

This article focuses on practical and legal considerations when terminating an employee. For more information about severance, wrongful dismissal, and reasonable notice, please see our related articles on those topics and linked to at the end of this article.

Before the Termination Meeting

Many of the most costly termination mistakes occur before the termination meeting ever takes place.

Before making the decision to terminate an employee, employers should review any employment agreement, workplace policies, performance documentation, and relevant employment standards obligations. In particular, employers should carefully assess whether there is a legitimate basis to allege just cause. Cause is a high legal standard and should not be asserted without proper investigation and supporting evidence.

Employers should also determine what compensation, notice, or severance obligations may apply and prepare the necessary documentation in advance. This may include a termination letter, severance offer, release, benefit information, and arrangements for issuing final pay and vacation pay.

Practical considerations should also be addressed before the meeting. Employers should consider how company property will be returned, whether access to computer systems or confidential information should be restricted, and how responsibilities will be transitioned to other team members.

Taking the time to prepare in advance can help ensure the termination is carried out professionally, respectfully, and in compliance with legal obligations.

Conducting the Termination Meeting

Few managers enjoy terminating an employee. In many cases, particularly where there have been no performance concerns or allegations of misconduct, the employee may have little or no warning that their employment is ending.

Whenever possible, the termination meeting should take place in person and in a private setting. Depending on the workplace, this may mean using a boardroom, separate office, or off-site location. For employees who work remotely, a virtual meeting may be appropriate. In those circumstances, employers should make reasonable efforts to conduct the meeting as respectfully as possible, which will often mean using video rather than delivering the news by telephone, email, or text message. It is generally advisable to have two management representatives present.

There is no universally correct time to conduct a termination. However, many employers prefer to do so near the end of the workday to allow the employee to leave with greater privacy and avoid unnecessary attention from coworkers. Employers may also wish to offer the employee the opportunity to collect personal belongings after hours or, where appropriate, arrange for those items to be gathered on the employee’s behalf.

If company property must be returned, consider providing flexible arrangements that respect the employee’s dignity while ensuring company assets are recovered.

Treat Employees with Dignity and Respect

The manner in which a termination is carried out matters.

Canadian courts have repeatedly emphasized that employers must act in good faith during the dismissal process. Employees should be treated honestly, respectfully, and with sensitivity. A poorly handled termination can expose an employer to additional liability beyond severance obligations.

For example, courts may award aggravated damages where an employer’s conduct during the dismissal process causes mental distress or humiliation. In more serious cases, punitive damages may also be awarded. Additional information regarding aggravated and punitive damages can be found in the resources section below.

Employers should avoid unnecessarily confrontational meetings, public dismissals, accusations that have not been substantiated, or conduct that may embarrass the employee.

Privacy and Post-Termination Communications

Information regarding an employee’s departure should be shared only on a need-to-know basis. This applies not only within the workplace but also when communicating with customers, suppliers, government agencies, and prospective employers seeking references.

Employers should exercise caution when discussing the reasons for a termination. While truth is generally a defence to a defamation claim, disputes often arise when allegations of misconduct or incompetence are communicated before they have been established or where a just cause allegation ultimately cannot be proven.

An employer who improperly characterizes the circumstances of a termination may face claims relating to reputational harm, lost employment opportunities, or other damages.

As a result, many employers choose to provide a confirmation of employment letter or reference letter outlining the employee’s dates of employment and general duties. Doing so can help demonstrate good faith and assist the employee in securing future employment.

Preparing the Severance Package

Employees should receive written confirmation of their termination, including their final date of employment and any information regarding compensation or benefits continuation or conversion options.

Where severance is being offered, it is often in an employer’s best interest to offer compensation in exchange for a release. A properly drafted release can help protect an employer from future claims arising from the employment relationship and provide both parties with certainty regarding their rights and obligations following the termination.

That said, the need for a release and the amount of any additional compensation offered will depend on the circumstances. For example, where there is a properly drafted and enforceable employment agreement that clearly limits an employee’s entitlements upon termination, an employer may have less incentive to offer compensation beyond those contractual obligations in exchange for a release.

Moreover, employers should not pressure employees to sign a release during the termination meeting.

Courts recognize that employees are often in a vulnerable position immediately following dismissal. If an employee is not provided with a reasonable opportunity to review the offer and obtain independent legal advice, a release may later be challenged as having been signed under duress or undue pressure.

Providing several days, or even longer depending on the circumstances, is often the most prudent approach.

Employment Standards Act Obligations

Employers must also ensure compliance with the Employment Standards Act.

The Act establishes mandatory minimum standards that cannot be contracted out of or reduced by agreement. Depending on the circumstances, an employer may be required to provide termination pay, vacation pay, records of employment, and other statutory entitlements within prescribed timelines.

Unless there is just cause for termination, compliance with these minimum standards is essential regardless of any additional severance or settlement package being offered.

Final Thoughts and Resources

Terminations are never easy, but they can be handled professionally and respectfully.

A useful rule of thumb is to treat the employee in the same manner you would want a family member to be treated if they were losing their job. Clear communication, respect for privacy, compliance with legal obligations, and a fair process can significantly reduce legal risk while helping preserve dignity during a difficult transition.

Looking for more information about employee terminations and severance obligations? You may find these resources on our website helpful:

• Wrongful Dismissal and Reasonable Notice – Learn about an employee’s potential entitlement to severance and how courts assess reasonable notice (click here).
• Avoid Costly Mistakes in Employee Terminations – Common termination errors that can expose employers to additional liability, including aggravated and punitive damages (click here).
• Employment Contracts in British Columbia – The importance of properly drafted employment agreements and how they can affect termination obligations.
• Just Cause for Dismissal – An overview of when an employer may terminate an employee without notice or severance and the risks associated with alleging cause.
• Understanding Severance Packages – Key considerations for employees reviewing a severance offer and employers preparing one.

Need Help?

Whether you are an employer planning a termination or an employee seeking advice about a severance package, our Employment Law Team can help.

Contact our intake team at 778.666.3723 or email litigationcoldcalls@rdmlawyers.com to schedule a consultation with an experienced employment lawyer.