An executive dismissal refers to the termination or dismissal of an executive employee or member of the high-level management by a company.
In this article, I will break down the Executive Dismissal so you know all there is to know about it!
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Table of Contents
What Is An Executive Dismissal
An executive dismissal is when an executive member of a company or someone holding a high-level position is terminated or dismissed.
In other words, the company executive’s employment contract is terminated by his or her employer.
For example, Mary is the Vice-President of Marketing or Sales reporting directly to the company CEO and she is terminated.
Since Mary is an executive member of the company, her dismissal will be considered an executive dismissal.
A company executive is a high-level member of the management team that typically reports to the company owner, president, CEO, or even board member.
An executive is a type of person who participates in strategic decisions and the future of the company affecting the company’s profitability, policies, and direction.
Another characteristic of an executive is that he or she has important authority within the company and can make important decisions without having to obtain any prior authorizations other than the company president or board for instance.
Why Executive Dismissals Are Important
When company executives are terminated or fired, there can be a lot of implications for both the executive and the company.
Executive dismissals by their very nature are more complex than the dismissal of a regular employee.
Typically, executives have a high level of responsibility within an organization, have access to trade secrets, are aware of the company’s strategic initiatives and plans, have important relationships with internal and external stakeholders, and more.
When an executive is terminated, there are many concerns about his or her reputation, what is the right compensation, how the executive member is treated, and so on.
If employers and executives cannot amicably find a solution, a legal dispute can get costly quite rapidly.
Executive Dismissal Considerations
Employers looking to terminate company executives should carefully assess the overall circumstances to ensure they take the proper steps.
Not only will it be beneficial for the employer but it will also reduce the likelihood that the executive files a claim or lawsuit.
One key consideration in terminating an executive is the severance payment.
Is the company offering the executive severance pay that is consistent with what executives in similar positions and similar tenure generally receive?
Does the executive employment contract provide for a certain severance payment that the employer must respect?
Another aspect to consider is the grounds for the dismissal.
Is the executive being terminated for cause or not?
Furthermore, what type of contractual undertakings will be required following the termination if the executive has key relationships and access to sensitive information about the company?
Things like non-compete, non-solicitation, non-disparagement, or other similar restrictive covenants should be considered.
The executive should also consider his or her rights by consulting a qualified employment attorney to adequately navigate the complexities of a termination.
What Law Applies To Executives In Quebec
The Quebec employment laws can be a little tricky to navigate for company executives and senior managerial personnel.
Here is a quick run down of the different laws that may apply to a company executive:
- The Act respecting labour standards of Quebec strictly for psychological harassment or time off for family obligations
- The Act respecting industrial accidents and occupational diseases (with some exceptions)
A company executive is not covered by the Pay Equity Act or the Act respecting occupational health and safety in Quebec.
Executive vs Employee In Quebec
Under the Quebec Labour Standards Act, company executives are not considered as “employees” as it is defined under the Act.
An employee is considered to be a person who works for an employer and who is entitled to a wage.
However, employees who are part of senior management, executives, or board of directors are not covered by all the protections offered to “employees” under the Quebec Labour Standards Act.
Article 2085 of the Civil Code of Quebec defines the employee as a person who undertakes, for a limited time and for remuneration, to do work under the direction or control of another person.
As a result, the Civil Code, as a statute, does not distinguish between senior managerial personnel versus an employee.
As a result, executives can exercise different types of recourse available to them under the Civil Code of Quebec in the event of litigation.
So there you have it folks!
What is an executive dismissal in Quebec?
In a nutshell, an executive dismissal refers to instances when an employer terminates an executive member’s employment contract.
Executive members are employees of the company just like any other employee.
However, under Quebec labour laws, the recourses available to company executives are not as broad as those offered to regular employees.
Employers looking to terminate an executive should carefully review the legal requirements with a qualified employment lawyer to ensure they handle the matter properly and minimize risk.
Company executives that are terminated or believe they are going to be terminated should consult a legal adviser as well to ensure they take the right steps forward.
Now that you know what an executive dismissal is all about, good luck with your research!
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