Terminations in New Brunswick: Here's What Employers Should Know 

As a small business owner in New Brunswick, juggling daily operations while staying compliant with employment laws can feel overwhelming, especially when it comes to handling terminations. A misstep could lead to costly disputes or legal headaches, pulling focus from growing your business. This blog breaks down the essentials based on New Brunswick's Employment Standards Act (ESA), helping you make informed decisions with confidence and minimize risks. 

What is termination of employment? 

Termination of employment occurs when an employer ends an employee's job, or when the employee voluntarily quits. It can happen through the employer providing written working notice, paying in lieu of notice (termination pay), or a combination of both. If a layoff results in the employee not returning to work, it also counts as a termination. 

This ensures both parties understand their rights and obligations, protecting against wrongful dismissal claims. 

What are the different types of terminations in New Brunswick? 

In New Brunswick, terminations fall into several categories: 

Without cause: The employer ends the job for reasons unrelated to employee misconduct, such as business restructuring or economic downturns. Notice or pay is required based on service length. 

With just cause: Immediate dismissal due to serious misconduct, like theft, fraud, assault, harassment, or dishonesty, with no notice or pay required if proven. 

Temporary layoff turning into termination: Occurs when a layoff exceeds limits or the employee won't return to regular work. 

Employee resignation (quitting): The employee voluntarily ends the job, typically without notice obligations on their side. 

Group terminations: When more than 10 employees representing at least 25% of the workforce at one location are terminated within a 4-week period, requiring special notice to employees, the Minister of Post-Secondary Education, Training and Labour, and any union. 

What is termination without cause? 

Termination without cause is when you let an employee go for reasons that aren't related to misconduct. Maybe you're downsizing, or the employee's role is no longer a good fit. 

You don't have to give a specific reason, but you must provide written notice or termination pay. This rule applies to employees who have worked for you for at least six months. This allows you to make necessary business changes while treating employees fairly. 

What is termination with just cause? 

Termination with just cause is for serious misconduct that breaks the trust in the employment relationship. Examples include theft, violence, serious insubordination, or fraud. 

In these cases, you can terminate the employee immediately without providing notice or termination pay. However, the burden of proof is on you, the employer. You must have strong evidence, such as incident reports, witness statements, or clear records of warnings. If you can't prove just cause, it could be considered a wrongful dismissal. 

When is an employee considered laid off? 

An employee is considered laid off when they are temporarily suspended from work due to lack of work or other reasons, with the expectation of returning. 

Under the ESA, a layoff is only "temporary" if it lasts for no more than six consecutive days. If the layoff lasts longer than that, it is considered a permanent termination. At that point, the employee is entitled to termination notice or termination pay. 

What are the requirements for providing written notice when terminating an employee? 

When terminating an employee without cause, you must provide them with a formal written notice that clearly states their last day of work. The amount of notice depends on how long they've worked for you: 

• 6 months to 5 years of service: 2 weeks' notice 
• 5 years of service or more: 4 weeks' notice 

You cannot give notice while an employee is on vacation or other protected leave. For group terminations, you must also provide written notice to the Minister of Post-Secondary Education, Training and Labour. 

What is termination pay? 

Termination pay (or pay in lieu of notice) is money you pay an employee instead of having them work through their notice period. This allows the termination to be effective immediately. 

The amount paid must equal the regular wages and vacation pay the employee would have earned if they had worked through the entire termination notice period. 

Do I always have to provide termination notice or pay when terminating an employee? 

No. You are not required to provide notice or termination pay in certain situations, including when: 

• The employee has worked for less than 6 months. 
• You have just cause to fire the employee. 
• The employee quits or retires. 
• The job was for a specific task that is now finished (and lasted no more than 12 months, e.g. fixed-term employment). 
• The employee was hired for construction work. 
• The employee refuses an offer of reasonable alternative work. 
• The termination is due to a situation that makes the job impossible to perform, like an unforeseeable event. 

What are the rules for paying out final wages when terminating an employee? 

An employee's final pay must include all outstanding wages, overtime, vacation pay, statutory holiday pay, and any termination pay they are owed. 

You must pay these final wages by the earlier of these two dates: 

1. The employee's next regular payday. 
2. Within 21 calendar days of their termination date. 

How to calculate termination notice and pay? 

Termination notice or pay in lieu of termination notice is based on service length (as above: 2 weeks after 6 months to less than 5 years, etc., max 4 weeks). For pay: Calculate based on the wages the employee would have earned during the notice period, including regular wages, vacation pay, and any other compensation. 

Example: If an employee earns $1,000/week on average and needs 2 weeks' notice, pay $2,000 plus benefits. Common law may entitle more (e.g., up to 24 months' equivalent). 

When an employee quits, do they have to give termination notice? 

No. In New Brunswick, the Employment Standards Act does not require employees to give notice when they resign. While it's professional for them to do so, it is not a legal requirement under the Act. 

If an employee does give you notice (e.g., two weeks), you can end their employment sooner. However, if you do, you must pay them their wages for the rest of their notice period or the amount of statutory termination pay they would have been owed, whichever is less 

Do you need help calculating termination pay correctly?  

Peninsula can help. Our certified experts can help you avoid mistakes when conducting terminations and reduce legal risks for your business. We can also assist you with termination documentation and processes, including termination letters, calculating final pay, and guide you on carrying out the termination meeting confidently. To learn more about how our HR services can benefit your business, call us today at (1) 833 247-3652.