What is At-Will Employment
At-will employment is the most common form of employment in the United States. It means that, unless there is a contract that states otherwise, an employer can terminate an employee at any time for any reason or no reason. Likewise, an employee can quit the job at any time and for any reason or no reason. Because most states are at-will, as opposed to contract employees, most people you know are employed at-will.
At-will employment means that, short of illegal or discriminatory reasons, an employee can be terminated for anything from talking too much to stealing from the company. So let’s say you have an employee who is 5 minutes late every morning without any kind of notice . That employee can be terminated on the spot, even if the employee has been an otherwise great employee. That is because the at-will employment doctrine gives you the ability to make these kinds of decisions.
If a company’s policy or culture is to never fire an employee over the phone, that policy should be followed. However, if you received an unexpected resignation during a meeting or over email, there is nothing illegal about terminating by phone. The law doesn’t require a termination to be face to face or to come in writing. Sometimes, you need to terminate an employee immediately.
Federal Laws Governing Termination
There are six major federal laws with regulations that a termination may be subject to: None of those laws say anything specifically about how an employee must be notified of the termination. The information required by each of these laws has nothing to do with the method of communication. The FMLA, ADA, and Title VII are even more clear about method of communication because they require that employers notify employees of their rights in writing, though that does not necessarily mean that the employer must directly notify the employee.
State-Specific Termination Laws
Some states are decidedly less rigid on this issue. California is one such example. There, it is legal to terminate an employee by telephone, so long as the employer complies with California Labor Code section 2017. Under that section, "if a person is discharged from employment without cause, the wages earned and unpaid at the time of discharge are due and payable immediately." In California, setting termination wages is not negotiable in the employment contract, so the employer must pay the employee the wages due, even if that date must fall on a weekend or holiday. Therefore, if the employer does not have a method of getting those wages to the employee quickly enough, a phone termination may be his or her only option.
Other examples of states that permit the phone termination of employees are South Carolina and Idaho. South Carolina is a "duty to pay wages" state that, similar to California, requires an employer to immediately pay all wages due an employee at a time and location established by the employer. Thus, this state has decided that the employer has a duty to pay an employee’s wages on the day of his or her termination from employment; it does not matter what the termination method was. Idaho is similar, but offers a little more leeway. There, wages must be paid "on or before the next payday."
Termination Exceptions
There a few exceptions in which firing someone over the phone may present some legal challenges. As is typical, there are additional laws and regulations, with many exemptions that may apply. Specific exclusions include under federal Americans with Disabilities Act (ADA), where firing an employee because of an ADA disability may lead to liability. An employer could be charged with violating this anti-discrimination law if an employee is terminated during a medical leave or while receiving medical treatment. A part-time employee is not fired over the phone and their position is offered back when the employee is ready to return to work after a legitimate medical leave of absence. Companies are required to hold open a job for an employee undergoing medical treatment but need not provide the same position for an unlimited time. If the employee is fired for any other reason during their absence, it could result in a fair argument that there is an ADA issue. Another exclusion is if a contract requires firing in person. There are many companies, mostly in the entertainment sector, that have contracts with collective bargaining agreements requiring companies to fire an employee in person in the presence of a union representative. Employers must know about any contract that requires an in-person termination. A third exception would be if the termination could be questioned. For example, if a supervisor calls an employee into their office as part of an early morning meeting with the employee, this could raise questions about the in-person meeting.
Employer Best Practices
To avoid the legal pitfalls and emotional backlash (both for the employee, the employer, and the HR professional handling the termination) of firing someone over the phone, an employer should think long and hard about whether doing so is necessary and appropriate. If an employer must fire someone over the phone, which likely will only be the case in a layoff or reduction in force scenario, it is critical to do so properly. Some tips for best practices are as follows:
- Hire experienced and knowledgeable executives, managers and human resource professionals who understand the best way to handle dismissals .
- If appropriate, give the employee a short period of time to prepare for the phone meeting and advise them to have a support person, such as a family member or friend, on the line, as long as the support person is not an attorney (you may need to ask questions regarding confidential or sensitive information so as not to reveal too much). Explain the purpose behind having a support person on the line and ensure that the support person understands that he or she cannot speak during the call, but can listen to the conversation to hear what is being said and act as a witness if needed.
- If the employee insists that there must be in-person meeting, an employer should accommodate them by sending a manager to their home or to a neutral location to explain the reasons for the dismissal to the employee and to obtain a letter of resignation or to deliver a termination notice.
Employee Rights and Remedies
If you have been told over the phone that you are fired, despite a "no firing policy" or an implied promise of continued work, it is in your best interest to seek legal guidance as soon as possible. Without consulting an experience employment lawyer, you risk the chance of waiving important legal rights. Valuable contractual and statutory rights can be lost where the normal two year limitation period is triggered immediately following the termination of employment. If monetary compensation is paid to you at the time of termination, the limitation period and claim period is calculated from the date of payment, rather than the moment of termination.
Your contract of employment may also impact whether or not you have a reasonable notice claim, as well as the amount of the claim. Indeed, the common law and your employment contract may not give you the full 24 months of notice you are entitled to at common law, especially if you are a senior employee. If your contract states you are only entitled to statutory minimums, your contractual rights could waive your common law rights.
Regardless of the circumstances surrounding your termination, you should consult with an experienced Ontario employment lawyer before signing any documents or accepting a settlement.
Legal Precedents
A review of notable legal precedents related to phone dismissals shows a range of outcomes. In Jessop and Sons Ltd v Nunes in the UK, the Employment Appeal Tribunal upheld a dismissal by phone call as "reasonable in the circumstances" given that the employer was based overseas and the employee was on a trip. The tribunal noted that the phone call was made out of working hours, but given that the employee had been told that he was going to lose his job, there was no need for him to return to the office to have the information personally delivered.
In contrast, in the case of Kerslake Psychiatrists’ v Victoria this year , the Supreme Court of Victoria in Melbourne upheld a claim for unfair dismissal against a psychiatrist who had simply left a message on the UK employee’s mobile phone stating that his services were no longer required.
While not a dismissal per se, the US case of Campbell v Hewitt Associates, LLC underscores the importance of accurate documentation by employers in the event that an employee claims he or she was dismissed via phone. In this case, the employee’s supervisors claimed to have conveyed, either by email or in person, that the employee was going to be laid off. Only one of the employees at the helm was able to find a copy of the relevant email however, and so the jury found in favour of the employee.