A dismissal letter isn’t all bad news; it can put the employee in the driver’s seat

While no one likes getting fired, a knowledgeable employee can make the best of a bad situation by recognizing the kind of dismissal he or she has been dealt.

For an employer to end employment effectively or lawfully, two basic things must happen. First, the employer must clearly communicate the fact of the ending of the employment to the employee. Second, the employer must give adequate notice of the ending of the employment or acceptable payment in place of such notice.

Because the communication of dismissal requires clarity, most employers choose to deliver dismissal letters to the employee. There are three basic types of dismissal letter.

The first type of dismissal letter is working notice. Working notice requires the employee to continue working and fulfilling the employment to the end of the notice period. To be effective, working notice must be clear, and it must by its nature be reasonable notice, unless the employment contract said otherwise. Working notice must also be adequate notice according to law, it must be feasible in that the employee can perform the duties during the period in question, and it must allow the employee reasonable opportunity to actively seek re-employment during the period.

The second type of dismissal letter is salary continuance notice. In this case, the employee ceases work on the date the dismissal letter is given, and then is offered salary for a pre-determined period of time into the future.

The third type of letter is an immediate, outright dismissal without notice, but with a lump sum payment offered in place of notice.

If an employer chooses to give an employee working notice, the employee’s agreement is not often sought. The employment continues and the employer retains control over the arrangement. As long as the working notice given is the correct duration of notice, it is an unassailable form of notice.

With salary continuance or lump sum dismissals, the employment services cease at the point the dismissal letter is given, and the payment of money in place of notice is left for the parties to agree to. Without agreement, the employer may threaten to cut off payment; however, it is unlawful for the employer to cut off payment without agreement.

There are two basic reasons why the employer seeks agreement of the employee for salary continuance or lump sum arrangements. The first reason is that these arrangements are in substitution for the correct form of notice, which is working notice. The employer has a core obligation to give notice. The employer is offering to buy its way out of the contract of employment and the requirement to give notice in exchange for bringing the employment services to an immediate end via a payment.

The second reason the employer seeks agreement is a bit more sinister. Agreement allows the employer to provide less notice, or in this case payment for notice, than the employee is entitled to at law. Operating on the presumption that a bird in hand is worth two in the bush, the employer gambles that the employee will choose payment of a lesser amount now over a greater amount later. The risk of the gamble is lessened by the reality that most employees do not know their rights, and are facing financial uncertainty at dismissal that drives them to want to secure themselves by the offer they are being presented with.

The good news for the employee is that dismissal letters typically provide the clarity necessary to determine whether and when there has been a dismissal. But while they may contain an offer, the letters themselves don’t necessarily constitute adequate money in place of adequate notice. This may not sound like good news for the employee, but giving clear dismissal drives the employer into the position of having to perform the second step: provide adequate notice or pay in place of it. With an outright dismissal and therefore no way to go back, the employer can only go forward to step two. If they don’t, they face a lawsuit they will most probably lose.

This leaves the employer exposed to the employee, who still has to bring out the heavy equipment to force fair compensation from the employer.

Any offer of a payment is only an offer, and as such can readily be quantified at law by a competent employment lawyer as to whether the offer is something the employee should accept or reject. Thus, negotiation of these arrangements can be very rewarding for the employee.

The payments or notice periods offered in dismissal letters are negotiable. Before an employee agree to the terms of any dismissal letter, he or she should obtain legal advice.

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