When and How to Provide Reasons for a Termination
By J. Geoffrey Howard
A recent B.C. Supreme Court decision, Ho v Monk Office Supply Ltd. 2026 BCSC 1324 reminds employers and employees that when terminating without cause, the employer is not legally required to provide reasons. However, we would caution employers that giving no explanation frequently leaves the employee feeling disrespected and wanting an explanation like the plaintiff in Ho. This blog post recaps tips for when and what to say about the reasons for a termination when terminating non-union employees in Canada.
Just Cause Terminations
With a just cause dismissal, it is important that the termination letter clearly assert that the termination is for just cause. If the employer nonetheless wants to pay or offer to pay some severance, the letter should clearly state the payment or offer is “without prejudice” to the employer’s legal position that it has cause. Failure to do so has led some judges to find the payment of severance is condonation of the employee’s actions and undermines the employer’s cause case.
In a just cause termination letter, we recommend summarizing in some detail the grounds and any prior warnings. This forces any lawyer the employee consults to more carefully consider whether there may, in fact, be just cause and so advise the client. If the employer is still investigating or believes there may be additional, as yet undiscovered, wrongdoing, the employer should reference that possibility. If there are several different reasons for the termination, mention all of them. Although there is no legal rule excluding grounds not mentioned on termination from consideration at trial, judges are understandably more suspicious of reasons not mentioned in the termination letter or meeting.
A final caution: even when terminating for cause, the courts will expect employers to carry out the termination in a human and private manner. Employers owe employees a duty to carry out the termination in good faith. Even in situations with serious just cause allegations, employers should be professional and discrete in handling the termination, including before, during, and after the dismissal.
Without Cause Terminations
The vast majority of terminations are “without cause”. This broad category covers all reasons that do not amount to “just cause”. The two most common without cause termination scenarios are:
- The employee’s performance has been poor or the employee has engaged in some misconduct but this does not meet the high threshold for cause, the evidence is weak or adequate warnings have not been given; and
- The termination is primarily or solely due to organizational changes or economic factors.
One golden rule when terminating in the first category is not to include critical comments about the employee even if they are the real reason for the dismissal. Not only is this unnecessary and legally irrelevant, but it is likely to upset the employee and increase the likelihood they make a claim. While an employer can omit any explanation, we do not recommend that approach. Instead, we recommend that employers provide a more neutral explanation such as “We are terminating due to a lack of fit of your skills with our business/changing needs of the business” or similar.
In the second category, be very clear that the termination is due to external factors and not the employee’s performance or actions. Many terminated employees automatically assume that their termination is due to their performance or other fault on their part even when just cause is not alleged. A clear statement to the contrary helps dispel that assumption. If appropriate, offer a reference letter. If the organization is downsizing to survive, explain this. It will help mitigate the sting of being selected for termination and may have the collateral effect of moderating the employee’s severance expectations.
In either case, we want to emphasize that an employer should not explicitly misrepresent the reason for termination either. Some judges have considered dishonesty in the reasons for termination to be “bad faith” conduct. For example, do not tell an employee you are “eliminating their position” and then hire or promote someone into the same position.
In cases in the second category where the employee may suspect that the termination is for discriminatory reasons (e.g. the employee recently missed work due to a disability) or because they took/are on a job-protected leave (such as maternity/parental leave), we recommend providing a slightly more detailed explanation of the legitimate reasons for the termination. This can help allay the common employee suspicion that the legally protected characteristic was the reason for termination.
Conclusion
This short post is not intended to cover all termination scenarios but offers suggestions on what to say about the reasons for termination in the most common scenarios. We recommend getting legal advice and drafting assistance with the termination letter and, if applicable, severance offer, whether terminating with or without just cause. We also recommend prior legal advice in higher risk without cause termination scenarios (e.g. employees with disabilities or on or returning from protected leaves) or when there is no termination clause defining contractual severance liabilities.
If you want more information on this topic, you can contact us at:
Geoffrey Howard: ghoward@howardchernlaw.ca
604 424-9686
Sebastian Chern: schern@howardchernlaw.ca
604 424-9688
