Terminations happen. Employees change occupations and leave and if you hire, chances are you fire – with or without cause.
Documentation all along the process is essential and never more than when an employee exits employment. When it comes to terminations employers must fully understand their rights and responsibilities.
Don’t leave your former employee in any doubt about their benefit coverage. As part of the documentation include a benefit status letter which outlines when benefits expire, what, if any benefits are part of a continuation severance and for how long. Ensure the employee is aware of their right to convert their benefits to individual coverage within a set time frame to avoid medical underwriting.
In addition, all employers in Canada must adhere to the employment standards and human rights legislation. Missteps in the process can lead not only to uncertainty for either party, but to litigation.
Having employees sign a waiver as part of the departure process is one of the best ways to avoid any future liabilities for employers, regardless of whether an employee is terminated or has quit.
In Card Estate v. John A. Robertson Mechanical Contractors (1985) Ltd. (1989), 26 CCEL 294, (Ont. H.C.), an employee was terminated without being told that his life insurance was being terminated or that he had 31 days to convert the life, health and dental coverage to an individual policy. The court found the employer was liable to the employee’s estate when he died during the conversion period.
Always, when in doubt, seek legal advice
Unfortunately, there are myriad of circumstances that can result in the company paying out substantially more than ever bargained.
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