February 2016
Employee Termination Costs
At times it becomes necessary to employ a new management or security company. At other times a condo corporation may choose to manage these services in-house.
When this time comes, the condo corporation is subject to Ontario’s Employment Standards Act (ESA). Of note is section 75 which exists to encourage ongoing employment. In the event of employee termination, this section attempts to minimize disruption.
When employees of an outgoing management or security company are no longer required by the condo corporation, the new company or condo corporation can be obligated to provide termination pay if they choose not to employ the same individuals.
One way to minimize employee termination costs is to require new employees to sign an employment contract with a termination clause. Such a contract may reduce the maximum termination period from 104 weeks or more to eight weeks.
Understanding this section of the Employment Standards Act can allow condo corporations to be better prepared for when it comes time to replace their property management or security company.
