Termination of employment in Newfoundland and Labrador
As an employer in Newfoundland and Labrador, it’s unfortunate when you are forced to terminate an employee. However, when doing so, it’s essential that you remain compliant with Newfoundland and Labrador’s Labour Standards Act (LSA) to stay compliant and protected from Wrongful Dismissal claims, as well as potential fines. In order to do so, it’s essential you provide the terminated employee with the entitlements they are owed in accordance with the LSA.
Terminations for cause & without cause
In Newfoundland and Labrador, there are two forms of terminations:
- Terminations for cause
- Terminations without cause
A termination for cause occurs when an employer provides specific reason(s) for the termination. While terminations without cause are the most common form of terminations and refer to when an employer does not provide a reason for the termination.
What is termination notice?
Termination notice is written, reasonable notice of termination which includes an official termination date. Throughout the first three months of employment, the employee is not owed a notice of termination. After this both the employer and employee are entitled to reasonable notice.
The chart below breaks down the notice entitlements based on length of employment.
Length of employment
3 months to 2 years
2 years but less than 5
5 years but less than 10
After 10 years
After 15 years
An employer can opt to provide Termination pay In lieu of notice. This option is ideal for those who do not want the employee working through the notice period and would prefer to sever ties. employer may choose this option if they do not want the employee to work through the notice period and would prefer to provide a lump sum payment.
If this is approved, the default payment option the employee will receive is a Salary Continuance Plan. The employee will be considered actively employed by the company until the official termination date. However, throughout this notice period, the employee will not report for work. The employee will also continue to receive their regular wages, will remain on the company insurance plan, receive pension credits, severance, etc. The employee may not be eligible for optional benefits.
An employer may not deduct wages, even if the employee terminates their employment without notice – unless the employee gives their consent. If the employer does not give their consent, the employer will need to deposit the wages into the provincial Unpaid Wages Account. then the employer is required to deposit the amount of the wages in question into the provincial Unpaid Wages Account.
Still need help?
If you need help understanding terminations in Newfoundland and Labrador, Employer Line is here to help. Call today at 1-709-383-1883 and an expert will be happy to walk you through it.