HR Professional - February/March 2009 - (Page 21) L E GA L BY MALCOLM MACKILLOP MANAGE YOUR WORKPLACE IN TIMES OF ECONOMIC CRISIS M 1. any companies are facing serious economic crises and HR professionals are dealing with plant closures, downsizing, increased stress claims and a surge in employment litigation as a result. Here a are strategies for managing turbulent times. absence of a signed release, you should make the payment. If the employee commences litigation seeking a greater amount of compensation, the employer will get credit for what has been already paid and the court is likely to view the employer more sympathetically than if payment has been withheld pending the execution of a release. Structure severance packages Dismissed employees are suffering even more anxiety caused by the uncertainty of finding another job. Using a u m modified bridge formula (salary continuation w with a 50 per cent lump sum payment on ree employment) rather than the lump sum payment m method or salary continuation method allows the employer to provide a lengthier notice period w while at the same time providing the employee w with the incentive to become re-employed as soon a as possible. A longer notice period also means that the e employee will be entitled to continuing health c care benefits for a longer time period, which has b become a growing concern for many dismissed e employees. 2. 3. Forget about the noncompete clause For the most part, a non-competition clause is not enforceable; and a non-solicitation c c clause might be enforceable, but only under select circumstances. Introducing either clause a at the end of the employment relationship generally leads to a breakdown in negotiating an a amicable severance package. A better approach i is to reinforce the employee’s obligations of c confidentiality and the obligation to return all c company documents at the time of dismissal. Payment without a release Avoid constructive dismissal claims Challenging economic times often lead to an increase in constructive dismissal claims because employers are forced to change organizational structures, which often require changes to an employee’s employment terms. A unilateral change to a fundamental term of a contract requires you to provide the employee with reasonable notice. Courts have recently reinforced the view that a dismissed employee may have an obligation to mitigate their damages by accepting alternative employment with the employer while they seek employment elsewhere. This is an effective strategy for employers, but remember that the employeremployee relationship cannot be acrimonious and the new working terms and conditions cannot be humiliating or demeaning to the employee. Deal with disability cases Do not assume that employees who are on disability cannot be terminated even in the context of a corporate downsizing. A bona fide corporate re-organization or downsizing does exclude employees on disability leave. If an employee’s job is declared redundant, then the employee on disability leave has no greater rights than the employee who is not disabled. The obligation to accommodate an employee with a disability does not guarantee the employee lifetime immunity from job loss caused by a corporate re-organizing or downsizing. 4. 5. Some employers refuse to make any payments to the dismissed employee unless the employee has signed a release. At u the very least, employers should make the statutory payment owing under the Employment Standards Act, 2000. If you have made a severance offer to an employee, even in the w w w.H RThoughtLeader. c om Malcolm MacKillop practices employment law in Toronto at the law firm of Shields O’Donnell MacKillop LLP. F e b r u a r y / M a r c h 2 0 0 9 21 http://www.HRThoughtLeader.com
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