Attention Small & Medium-sized Businesses...

The Importance of Terminations and the Legal Landscape that Small / Medium-Sized Businesses Must Navigate

Terminations are one of the most high-stakes responsibilities in HR. I know because for the past (almost) 2 decades, I’ve been exposed to some different terminations. For small and medium-sized businesses (SMBs), where every role carries weight and legal budgets are limited, the importance of getting terminations right cannot be overstated. Whether the reason is restructuring, performance, or misconduct, how a business handles an exit reflects on its leadership, culture, and legal compliance.

But why does a SMB need to understand their People risk?

1. Financial Risk: One unenforceable clause or misstep in the process can expose the small/medium business to costly common law claims. (What’s common law, you ask? It’s law that comes from a Judges’ decisions in court, not from laws passed by governments.)

2. Reputational Risk: Word travels fast in close-knit industries or small towns. How you treat departing employees says a lot about your values and your leadership.

3. Operational Risk: In smaller teams, departures can disrupt business continuity and morale if not handled with empathy and structure.

4. Compliance Risk: Terminations that ignore Employment Standards Act (ESA) (or even common law requirements with no employment contract in place) requirements or human rights laws can invite legal claims.

This is where Unlimited HRM Solutions Inc. becomes your trusted partner — offering proactive, legally aligned, and people-first HR guidance tailored to your Small / Medium-sized Business.

No one enjoys being on the receiving end of a termination conversation. We recently supported an organization through a difficult dismissal, and I emphasized to the owner the importance of handling the process with the utmost respect and professionalism. Our goal was clear: to mitigate any potential backlash or claims against the company stemming from a poorly managed or emotionally charged meeting.

Enforceable vs. Unenforceable Termination Clauses

✅ Enforceable Clauses

• Respect ESA minimums

• Use clear and specific language

• Have been updated post-Waksdale to separate for-cause and without-cause terms

❌ Unenforceable Clauses

• Attempt to limit ESA entitlements

• Are vague, overly broad, or outdated

• Contain ambiguous or illegal language

➡️ Why this matters for SMBs: If a termination clause is deemed unenforceable, you could be liable for months of additional severance under common law. SMBs simply CANNOT afford to take that chance.

Unlimited HRM Solutions Inc. is inclined to review employment contracts and if there is an absence of an employment contract, consideration to the employee is needed to ensure your employees are agreeable to signing an employment contract.

How Unlimited HRM Solutions Inc. Supports SMBs with Terminations

Whether you're preparing to end employment or reviewing your contracts and processes, we provide:

🛡️ Compliance Assurance

• ESA-aligned policies

• Human rights and AODA considerations

• Up-to-date documentation

• Review existing

👥 On-Demand HR Support

• Coaching for difficult conversations

• On-site or virtual presence for sensitive exits

• Risk assessments before termination decisions

📄 Separation Documentation

• Drafting of termination letters, ROEs, and settlement offers

• Guidance on final pay, benefits, and vacation payouts

💡 Proactive Strategy

• Creating structured offboarding processes

• Training managers on termination best practices

• Avoiding constructive dismissal through role-change consulting

A single termination decision can have long-lasting effects on your culture, compliance, and costs.

For Small / Medium-sized Businesses, the risk of getting it wrong is amplified by limited internal HR resources and higher exposure to legal pitfalls.

The FINANCIAL RISK is not worth it...

Hire a Fractional HR Partner.

Know that Unlimited HRM Solutions Inc. is your partner in getting it right. We combine legal compliance with human compassion — helping SMBs lead legally, ethically, and effectively through every stage of the employee lifecycle.

Sincerely, Carmelinda Galota, CHRL