Recently, I was interviewed for a national TV network’s local evening news on a case of two women who had been fired by their companies while on a maternity leave. This is permitted by law in the province of Alberta, but the reporter asked me if it is right. In other words, is it ethical to fire employees who are on a leave? This is the 15 second sound bite that was aired (as I recall it): … “It is in employers’ self-interest to treat their employees justly, so if they have to fire someone, they should wait until that person is back from a leave.” So let me elaborate to answer the question fully, considering the context of terminating employees.

Companies exist to produce and trade material values—goods and services—for a profit. To pursue this purpose and to carry out the work, they need competent, productive employees. Companies do not “create” jobs as a service to those who need them. A job is a privilege; there is no such thing as a right to a job. An employment contract is based on trade: an exchange of value for value, for mutual benefit, by mutual consent. An employer hires an employee for his contribution (labor) for the company’s profitability and pays him for his services. This is an important part of the context that must be considered when assessing whether firing an employee who is on a leave (whether maternity or any other kind). If a company has such a severe cash flow problem that its survival is imminently threatened, it must cut costs drastically, including terminating employees—even those who are on a leave. (In Alberta, parents of newborn children are entitled by law, absent the employer’s financial exigency, to one year of unpaid parental leave that can be divided between the parents. The government provides unemployment benefits for a part of it to those who have paid employment insurance premiums. Some employers pay a reduced salary for portion of the maternity leave.)

However, outside of a company’s dire financial situation, terminating an employee who is away on a leave is not consistent with the principle of justice—assuming that the employee has been a productive contributor (i.e., there is no performance- or conduct-related just cause). Morally, justice guides us to assess people objectively and to grant them what they deserve. An employee is not entitled to a given job, but she deserves to be treated decently, based on her contribution to her employer. At the minimum, if the company has deemed a termination urgently necessary due to its financial situation, decent treatment means a notification and a face-to-face discussion before the termination, where the company’s situation is explained, the employee is thanked for her services, and reference for a future job is offered. If the company can afford it, severance pay and out-placement counseling should be provided.

In most cases, particularly when an employee is on an unpaid leave, a termination for other than a just cause should wait until the employee is back at work and the supervisor can deliver and explain the bad news in person. I suspect that the reason behind written termination notices to employees on a leave is the supervisor’s cowardice (or the HR department’s incompetence). Having to fire an employee, especially a productive one, is always difficult and unpleasant. Sending a letter (or worse, an email) allows the supervisor to avoid facing the employee, explaining the reasons for the termination, and possibly dealing with an upset employee and a stressful situation.

However, handling terminations in an honest, straightforward, and just manner in all situations (whether maternity or other leaves are involved or not) is in the employer’s self-interest. It affects the morale of the remaining staff and the reputation of the company as a fair, desirable employer, which boost productivity, loyalty and ability to attract good job applicants in the future.

Violating the principle of justice has negative consequences (poor employee morale, low productivity, or high turnover, etc.)–adhering to it helps companies create material values and achieve long-term profitability.

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Jaana Woiceshyn teaches business ethics and competitive strategy at the Haskayne School of Business, University of Calgary, Canada.She has lectured and conducted seminars on business ethics to undergraduate, MBA and Executive MBA students, and to various corporate audiences for over 20 years both in Canada and abroad.Before earning her Ph.D. from the Wharton School of Business, University of Pennsylvania, she helped turn around a small business in Finland and worked for a consulting firm in Canada.Jaana’s research on technological change and innovation, value creation by business, executive decision-making, and business ethics has been published in various academic and professional journals and books. “How to Be Profitable and Moral” is her first solo-authored book.

1 COMMENT

  1. Good question.

    The method of some of the “firings” performed in recent years are just examples of scummy gutless business people, who the employee would have been wise to leave earlier (having lined up someone better to work for).

    Business owners often lack judgement in promoting managers, hence the idiot jerk who fired someone who was on vacation by sending an email to his work email address (thus he wouldn’t get it until he returned to work).

    Of course in a free market supported by a justice system owners who do such things won’t have their investment for long, as great employees will shift to better employers, and new companies will provide better service more efficiently. The employer now in the news in Calgary has a black mark against it in the eyes of customers who are deciding which consultants to keep using in these tough times.

    (PS: I rankle at the word“firing” as to me it infers for-cause, but I recognize you don’t mean that this case. In the old days “lay off” was common here, “make redundant” perhaps. Of course some companies go out of their way to avoid laying people off when times are tough, but that requires the solid financial situation of a viable company.)

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