Question

Matthew was hired to work at a factory here in Windsor. The factory currently employs 250 people. He was very excited to start this new position because he just finished his program in an automotive technician, and he was going to be working on equipment to make parts for cars. He was hired at $20/hour and told there would be a 90-day probationary period. At the end of his probationary period, he would receive a raise of $5/hour. The company also promised that there would be annual performance review and based on the results of his annual performance review, he could potentially receive raises of up to $1/hour each year with a maximum of $35/hour possible. The factory also advised Matthew that they would provide a prescription, dental, and eye care insurance.

1. Matthew has enjoyed the position and feels like has really been doing a good job. His employer has never had anything negative to say about him and for the most part, he shows up, does his work, then leaves. There is rarely any interaction between him and his supervisor. One day, he shows up to work and the supervisor calls him into the office and informs him that he does not think he is a good employee and is, therefore, terminating his employment effective immediately. Is it legal for the employer to do this if Matthew is still within his probationary period? What if he has been there after the probationary period has ended? Please explain your answers.
2. Now assume Matthew has been at the company for 12 years. It has been such a great place to work that he still works with almost all the same people that were there when he was hired. In fact, only 28 of his co-workers have been there less time than him. The company is notified that the automaker they make parts for is discontinuing that vehicle. As such, the factory no longer needs as many employees as it currently has and decides to downsize. They are laying off 30 employees. Please describe the process that would have to be involved in ending the employment relationship with those 30 employees and do you think Matthew would be one of them? Explain your answer in both terms of steps to take, categories of termination, and any compensation or notice requirements

Answer 1

1. It is completely legal for an employer to terminate an employee during probationary period due to at-will doctrine that permits both employer and employees to terminate and leave work. Thus termination of Matthew is completely legal. But there are chances that employer misuses at-will doctrine to terminate Matthew. Matthew is a new worker and needs more time but supervisor has thought otherwise.

If the probationary period ends, employer still can terminate Matthew based on at-will doctrine, but Matthew is entitled to receive various benefits such as severance pay, coverage for health insurance, final paycheck, and compensation for unemployment. Matthew can use a defense of implied covenant that At-will doctrine provides. As Matthew did not cause any issue to workers and his performance was satisfactory, he could extend the argument that termination was not just as he completed his work successfully but he did not interact much with supervisor and due to that, supervisor had a malicious intention to terminate him. Thus, he can use implied covenant of at-will doctrine to challenge this termination. He can also ask a notice of one week from employer before termination if he completes his probation period. As he does not receive notice, he may report authorities about unfair termination.

2. The case of terminating 30 employees requires employer to take certain steps. Employer needs to provide cause of termination in a kind and respectful way to them. Situational facts should be provided to them. Information regarding their compensation, assistance to find a job and insurance and other benefits should be communicated by the employer. Employer needs to provide them a notice and review the employment contract. Employer needs to calculate severance pay of employees. Employer also has to provide eight week notice for employees as all have worked more than eight years. If the employee work less than eight years the notice period will be shortened depending on how many years they work for the organization. For example, if they work less than 8 years but more than 7 years, they will receive seven week notice. It is not a case of termination with a cause as the employees are not terminated for criminal acts, or misconduct therefore, they are entitles to obtain a notice of termination.

The category of termination is involuntary termination that takes place when the employer ends the employment relationship. Compensation benefits include entitlement payment, tax payment and termination payment. The entitlement pay needs to be provided to the employees including terms of contract, accrued leave and outstanding wages. The employment termination payment can include severance pay, gratuity pay, and payment against notice, unused annual leave and compensation for job loss. The tax payment may include superannuation and fringe tax benefits. These benefits may or may not be provided by the employer to these 30 employees depending on terms of employment contract.

As far as Matthew termination is concerned, he may or may not be terminated by the employer. It depends on employer decision and his contribution to the organization. If the employer feels that Matthew can contribute to the organization, he may not receive a termination letter.