How ethical is it for a nonprofit health care agency to force employees to sign job offer letters saying they agree to let the organization terminate them for any reason and without cause, both during probation and after probation? A termination gives no way to close off with clients, with whom a strong therapeutic alliance may have been formed. Is this ethical? Is it common?

Disclaimer: I am not a lawyer and nothing in this column may be taken as legal advice. I do not claim to be current on employment standards law in Canada, particularly since it differs from province to province, or know whether or not this has become common. Also, I do not have access to a sample of the job offer letter in question, only what is in the question.

However, I did work four years in employment standards law, albeit long ago, and managed staff for many years in both unionized and non-unionized workplaces. Employers almost always have the right to terminate for any reason and without giving a reason. The laws set out a few exceptions; terminating because an employee is exercising their rights under an Employment Standards Act is not acceptable. However, the legal right to terminate does not take away the right of an employee to take civil action if they deem the conditions of termination unfair. Employers often offer more than the legal minimum in termination pay to reduce the chances of a lawsuit.

Ethically, the job offer letter should not take away that right either, in my opinion. I suspect such a letter would be perceived by a judge as having been signed under duress — that is, as the only way to get a needed job. The circumstances of some future termination could not be foreseen, and the letter might be set aside, but I can see why the letter is making employees nervous.

Nonprofit termination laws

Your question seems to assume termination without notice. During probation, employers usually do not have to give notice or pay in lieu of notice. After a probationary period, most employees are entitled to notice, of various amounts, depending on length of service. Employees on a contract with a fixed end date are likely not entitled to notice if the contract terminates on schedule. It is my understanding that if notice (or pay in lieu) applies, it is a statutory right which cannot be waived. I doubt the employer is trying to terminate without pay in lieu of notice when the termination is “without cause.” The letter is probably unclear on this issue.

Once the decision to terminate is made, employees might be given the notice period to bring closure to current therapeutic relationships. However, the employer is entitled to give pay in lieu of notice and many do because of the risks of having a disgruntled employee around. They see a need to quickly end access to the premises, to the computer network, and to clients and co-workers. An unfortunate reality is that risk management advice is more often based on risk to the organization than risk to the emotional health of its clients.

Terminating for cause usually does mean immediate dismissal. In those cases the employer believes it would be quite harmful to keep the person around. No advance agreement would matter in such circumstances, though the termination settlement might be affected.

But is this ethical nonprofit practice?

You ask if the letter is ethical. Overall, as I’ve said, the organization might see the action as ethical since it has a responsibility to protect its assets, and think the clause would discourage (even if not prevent) lawsuits. The cost of a single lawsuit can easily move a small nonprofit from a surplus to a deficit situation, and even wipe out its operating reserve. They may consider the letter part of their risk management.

I think it would be more ethical of them to specify that notice requirements and other labour law standards would still be adhered to, and that signing the letter does not remove legal rights to contest an unjust dismissal.

Looking at the ethics from a mission perspective, it is obviously not wise to blithely lay off health care workers who have gotten to know their clients and communities. They will have formed a trust relationship that aids in providing high quality health care. However, the organization may be dependent on government contracts, and have no option but to lay off staff if they are unsuccessful in bidding for future contracts. It is not ethical to keep people on staff without the funds to meet payroll!

It is never ethical to terminate without trying to be humane. An employer can control what day and time of day the employee is told, the level of privacy, and the access to time to think and get a legal opinion before signing anything. The employer can also control the availability of references, and assistance to the employee in moving on.

In summary, I cannot tell whether the letter is ethical without seeing the actual wording, but it sounds as if the letter is quite one-sided, and might give employees the impression that they are giving up legal rights. Employees should all make an effort to know the employment laws that apply to them. If I was given such a letter to sign, I would definitely consider taking it to a lawyer for review before signing. If the employee cannot afford to do that, perhaps a community agency involved in helping people find employment or job skills can help.

Since 1992, Jane Garthson has dedicated her consulting and training business to creating better futures for our communities and organizations through values-based leadership. She is a respected international voice on governance, strategic thinking and ethics. Jane can be reached at jane@garthsonleadership.ca.

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