Dismissal and Fixed-Term Contracts
Fixed-term contracts allow businesses to hire staff on a short-term basis without the commitment of a permanent contract. However, these employment arrangements come with serious risks if not managed properly. In fact, they can lead to problems such as staff shortages, incohesive workforces, and non-compliance with labour laws. Moreover, they can be a source of frustration for employees who want to work permanently with a company they have worked hard for.
It is important to note that although an employer may terminate a person’s job at any time, this does not give them total freedom to do so for an illegal reason or in an unlawful manner. They must still fulfill basic labor rights regardless of the type of employment contract an employee has with them, including notice periods and termination payments. Failure to do so can constitute wrongful dismissal toronto.
If an employee is working on a fixed-term contract and is terminated prior to the end of their term, they are entitled to severance pay for the remaining balance of their contract. In addition, employers must provide the minimum amount of notice required under applicable labour law. For fixed-term employees, this means a week’s worth of notice unless the contract states a different notice period.
Wrongful Dismissal and Fixed-Term Contracts
Some employers have been tempted to treat their fixed-term employees less favourably than their permanent staff. It is important to remember that this practice is a breach of the Ontario Human Rights Code and could lead to a human rights complaint. Moreover, an employer cannot treat a fixed-term employee differently than a similar permanent employee unless there is a valid business reason to do so. This is known as objective justification and must be demonstrated in writing.
Many fixed-term employees are hesitant to take a job because of fear that they will be dismissed before their contract ends. This is an understandable concern, especially in a difficult economy. However, it is also important to note that an employer must ensure that it has a legitimate business need for an early termination before terminating a fixed-term employee. Generally, this will be reflected in the terms of their employment contract.
A common mistake that employers make is to terminate an employee on a fixed-term contract without a just cause, or with undue hardship. This is a wrongful dismissal under the Canada Labour Code and is punishable by damages.
In order to avoid this pitfall, an employer should draft a clause in the employment contract that allows them to terminate an employee on a fixed-term agreement before their term ends. This should be clearly outlined and state that the employer will provide a reasonable amount of severance pay for any outstanding balance of their contract plus any other compensation as required under applicable labour laws. In addition, an employer should include a statement that they will not compare severance packages of fixed-term employees with those of indefinite or permanent workers. This will help to protect their reputation and minimize legal liability.