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Termination & Wrongful Dismissal

Employers: Approaches to termination packages

When I am asked to provide advice on a termination package for businesses concerning an employee that they wish to terminate, my first question is obviously what that person’s position is. There will be varying degrees of approach depending on the seniority and position of the person to be terminated. Executive terminations will not be approached the same way as entry level positions.

There are certain approaches you can take when terminating an employee, depending on how things are viewed.  You can approach the termination with an attempt to treat the departing employee fairly and with respect, while at the same time reconciling your own competing differences. This is a tactful approach that requires compromise on your behalf. The objective of this approach is to provide the departing employee with fair payment in lieu of notice and to avoid litigation, which can easily wipe out your bottom line if you are a small to medium sized company. Another approach is to be more adversarial and minimize the payment in lieu of notice to be paid to the employee.  Normally you would take this approach if there are lingering issues of “cause” that the employer will “hang” in the termination letter in order to dissuade the employee from challenging the termination. The problem is that if the employee gets legal advice this approach nearly always backfires.   Another approach to termination is to develop a termination package ahead of time with the employee within the employment contract.. This way both parties know what to expect upon the termination of the employment relationship.   This approach should obviously be done prior to the commencement of the employment relationship. The last approach that I sometimes recommend is to put your best offer out. Make it a fair offer in light of the circumstances. Make it a full offer that encompasses everything to the maximums so that if the employee takes this termination letter to an employment lawyer, that lawyer would not dare challenge it. Make it unchallengeable in that it becomes too much of a cost-risk analysis for the lawyer they consult.

Matt Lalande is a personal injury and employment law lawyer at Haber & Associates in Burlington

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Matt Lalande
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