Continuation from 1st half of article
"Reasons to Call Your Employment Lawyer Before You Think You Need Them"
Employee Discharge and Documentation in British Columbia
Article by Rose Keith, BA JD, Vancouver BC Employment Law Lawyer RoseKeith.bc.ca
4. Firing for Cause
When an employee is terminated for cause, no severance or notice of the termination is required. This includes under Employment Standards legislation. The burden is on the employer to establish that there was just cause. The employer must prove misconduct that goes to the root or essence of the employment relationship. There is no line in the sand of conduct that will be found to constitute just cause and the employer is left in the unenviable and difficult position of hoping what they have alleged to be just cause will in fact be found to be so. As is illustrated below, even in situations where just cause seems obvious, unless particular steps are taken courts will not uphold just cause. If just cause is found to not exist then the employer will be liable to the employee for damages for failure to provide reasonable notice of termination. In any with cause termination an employer is advised to carefully document all incidents of misconduct and all discussions with the employee regarding the misconduct. Specific communication, preferably in writing, to the employee regarding the misconduct and the consequences is advised.
The difficulty and uncertainty with alleging just cause is illustrated in the following quotation from a decision of the Ontario Court of Appeal in 1967 in R. v. Arthurs; ex parte Port Arthur Shipbuilding Co.,  2 O.R. 49. This quotation remains a quote which is frequently referred to in cases in which just cause is alleged. Just cause in this case was described as follows:
If an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employers business, or if he has been guilty of willful disobedience to the
employers orders in a matter of substance, the law recognizes the employers right summarily to dismiss the delinquent employee.
Just case was defined in Leung v. Doppler Industries Inc. (1995) 10 C.C.E.L. (24) 147 in the following terms:
Just cause is conduct on the part of the employee incompatible with his or her duties, conduct which goes to the root of the contract with the result that the employment relationship is too fractured to expect the employer to provide a second chance.
A test to determine whether just cause existed or not was described in the decision of ODwyer v. Dominion Soil Investigation Inc. (1999), 90 O.T.C. 1 as follows:
The test appears to be the following, absent a flagrant dereliction of duty, it must be shown that something was done clearly inconsistent with the proper discharge of the employees duties that reasonably indicates a risk of injury to the employers interest through continued employment.
Just cause is an all or nothing proposition. There is no such thing as near cause. Either the employer has just cause for the dismissal and therefore no requirement to provide notice, or they dont and therefore the requirement to provide notice. Just cause is essentially fact driven. There is no set list of the ways in which just cause may be found, rather it is a review of the evidence with an eye to determining whether the conduct is inconsistent with the ongoing employment relationship.
Some of the more common categories of conduct which justifies dismissal include:
a. Poor Performance - Poor performance may constitute just cause but only when a system of progressive discipline has been utilized in which the employees poor performance is brought to their attention, they are given an opportunity to improve their performance, are warned that a failure to improve performance will result in termination and fail to make adjustments to their performance.
b. Absenteeism and lateness - may on occasion provide just cause for dismissal. The degree, timing and prejudice to the employer are the key considerations along with condonation on the part of the employer. In general the test applied by the courts is what would the reasonable employer do - or, alternatively overlook - in the circumstances?##148; The central issue is whether it is reasonable for the employer to terminate and one of the factors that will be considered is whether or not clear warnings were given to the employee that a consequence of their absenteeism or lateness, if it continued, would be termination.
Absence from work due to a temporary illness will not justify termination, however absence due to a permanent illness may justify termination. The primary issue is when is an illness considered permanent?
c. Disobedience - an employees willful disobedience of a reasonable order, direction, policy or procedure, that is necessary to the fulfillment of the employers business objectives, may be just cause for dismissal. However, in my view the way that the cases have considered such an allegation makes it practically impossible for an employer to succeed in an allegation of just cause on the basis of disobedience.
The British Columbia Supreme Court described what an employer must establish to successfully argue disobedience as the basis for a with cause termination in the case of Heyes v. First City Trust Co. (December 4, 1981), (1982), 12 A.C.W.S. (2d) 104. In that decision Mr. Justice MacKinnon described the onus on an employer alleging disobedience as a grounds for just cause as follows:
Generally one isolated act of disobedience will not be sufficient to constitute cause for dismissal. The employees act must also be intentional and deliberate. Even if the action is willful, if there is a reasonable excuse for the conduct it may not constitute just cause. When the disobedience concerns a failure to carry out a policy or procedure of the employer, the onus is on the employer to establish two things:
(1) That the policy is incorporated into the employment contract; and
(2) That the employee was clearly informed of the policy and the consequences of disobedience.
However, even if an employer is able to establish both of the above, if the policy or procedure is not strictly enforced as a general rule then the employees failure to comply with the policy or procedure may not constitute just cause.
d. Dishonesty - may constitute just cause. Dishonesty means conduct with the employee knows would be considered dishonest by reasonable and honest people. Employees in a position of trust or authority are held to a higher standard of honesty than other employees. A single isolated act of dishonesty will generally not be sufficient ground for termination.
The test to be applied was described in Clauus v. Wentworth Mould & Die Co. (June 22, 1981), (Ont. Co. Ct.), 9 A.C.W.S. (2d) 300 as follows:
Intentionally providing inaccurate information to the employer concerning matters about which the employer would have a legitimate interest.
The Supreme Court of Canada described the test to be applied in assessing whether dishonesty provides grounds for a just cause dismissal in McKinley v. BC Tel (2001), 2001 SCC 38 as follows:
I am of the view that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct. More specifically, the test is whether the employees dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is
fundamentally or directly inconsistent with the employees obligations to his or her employer.
In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employees deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal.
e. Intoxication - an employees intoxication that prejudices an employers interest or creates a risk to life or property may give rise to just cause. Intoxication on its own is not sufficient grounds for just cause. If intoxication has been condoned by the employer it likely will not constitute just cause. Termination on the basis of intoxication carries with it as well potential human rights concerns
f. Sexual harassment - The onus is on the employer to adopt, educate employees about and enforce an anti-harassment policy. A claim of just cause likely will not succeed unless the employer conducts a fair and proper examination into allegations of sexual harassment prior to termination. Sexual harassment was defined by the Supreme Court of Canada in the case of Janzen v. Platy Enterprises Ltd. (1989), 25 C.C.E.L. 1 as follows:
Without seeking to provide an exhaustive definition of the term, I am of the view that sexual harassment in the workplace may be broadly defined as unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment.
The decisions regarding termination for sexual harassment indicate that the following will be relevant to an analysis of whether just cause exists or not:
Did the employee have knowledge of the policy and the consequences of breaching it?
- What is the culture of the work place and in particular is sexual joking and prank playing prevalent in the work environment?
- Has the employee been specifically warned of the consequences of sexual harassment?
At the very least, the case law indicates that for a dismissal on the basis of sexual harassment to be found to be just cause an explicit anti- harassment policy is necessary as well as the warning that breach of the policy will result in termination.
g. Probationary employees - many employers think that they have an unequivocal right to terminate a probationary employee. That is not the case. A number of decisions in Canada have confirmed that probationary employees must be treated fairly, including with respect to decisions to terminate within the probationary period. For an employer to terminate during the probationary period without triggering the requirement to provide notice or pay in lieu of notice the employer must be able to establish that on proper and reasonable grounds they have concluded that the employee is unable to perform the position in question. Where notice is required decisions have indicated that the required period of notice may be shorter than what would be required for a non-probationary employee.
5. Duty to Mitigate
A terminated employee has a duty to mitigate their damages, or in other words to take steps to lessen the damages that they suffer as a result of termination. Sometimes, this may mean a requirement to accept an alternative role with the employer. This is particularly relevant in cases involving constructive dismissal where there is often found to be a duty on the part of the employee to mitigate their damages through acceptance of the alternative role with the employer.
6. The Termination Meeting
As indicated previously when terminated employees consult me they generally have complaints relating to the perceived way that they have been treated. Being fired is one of the most stressful, difficult things that any individual will experience. Make sure that your entire team is trained to ensure that any termination meeting is handled with the utmost respect and compassion. Doing so will go a long ways towards easing the transition of your past employee.
Prior to the termination meeting make sure that all of your documentation is prepared. Have a letter for the employee confirming the termination and the terms of any offer of notice or severance. Include a copy of the release with the package of information that you provide to the employee. If your company has the means to do so, offer employment counseling for a set period of time. Keep the termination meeting short and simple. If you have already made a decision to terminate there is absolutely no purpose to be achieved by detailing performance concerns or asking the employee to explain their actions. Assure the employee that everything will be done to ease their transition to new employment. It is preferable to have the employees direct supervisor handle the initial discussions in the termination meeting and then have a representative from HR handle any of the more detailed questions regarding transition or the terms of an offered package. If possible allow the employee time to clean out their desk and remove personal effects.
One of the most important pieces of documentation in any termination is the release. Ensure that your release is enforceable and that it provides you with the protection you are seeking to obtain through payment of any severance or provision of any notice. Dont rely on a document not prepared for you by your employment lawyer and dont rely on a cookie cutter approach. Each situation is unique and each situation does require the review by a qualified legal professional.
8. Post-Employment Competition
This is a potentially very expensive and reputation damaging consequence of a termination if it has not been handled correctly. Anticipating this difficulty starts long before the employment has been terminated, in fact should occur at the time of hiring. Non-competition agreements should be drafted by an employment lawyer and again should be unique to each employee. If they are written too broadly they will not be enforceable. Judges will not amend non-competition agreements to make them enforceable, they will simply find the employee or ex-employee to not be bound by them. To be enforceable they have to limit the employees ability to compete only to the extent necessary to protect the interests of the employer.
Another aspect of post-employment competition relates to the confidential and proprietary information of the employer. Make sure that you have a strong and valid agreement in place to protect your information. This again requires consultation with your employment lawyer and is another area where the cookie cutter approach should
only be taken with the understanding that it very possibly could result in you having a non-enforceable agreement.
When Should you Call Your Employment Lawyer
The best time to call your employment lawyer is not when you are facing a law suit or demand for damages from your prior employee. As indicated above, you should view your relationship with your employment lawyer as a partnership. The better your lawyer knows your business, the culture of your business and the values of your business, the better able they will be to assist you in crafting your employment policies and procedures and the better positioned they will be to ensure that the risks associated with terminated or departing employees is mitigated.
Your company may on an annual basis deal with anywhere between zero and maybe twenty if you are a very large company, departing or terminated employees. An employment lawyer will deal with well over 100 in any given year. An employment lawyer has the opportunity to see the variety of ways companies structure their employment policies and practices and has seen how those policies or practices mitigated or increased the exposure to the company in the event of a terminated or departing employee. Your partnership with your employment lawyer gives you access to that wealth of knowledge, in addition to the expertise in legal matters and the analysis and judgment that lawyers are trained to bring to any situation. Early and ongoing consultation with your employment lawyer decreases legal costs, decreases the chance of litigation arising from terminations and decreases the exposure of the business to damages.
Issues to Consider when Assessing and Reviewing Your Employment Policies and Practices:
1. Are our recruitment efforts in accordance with the requirements of relevant Human Rights legislation?
2. Do our offer letters adequately protect the company in the event of termination or voluntary cessation of employment?
our offer letters adequately protect the company in the event of termination or voluntary cessation of employment?
3. Have our staff been adequately educated and informed of the manner in which terminations should occur?
4. Do you have a progressive discipline policy? Is the policy fairly and consistently applied?
5. Do you have a social media policy and is it consistently brought to the attention of your employees and consistently applied?
6. Do your employment practices comply with Employment Standards Legislation?
7. Is your bonus structure set up in a way that liability for terminated or departing employees is limited?
8. Is your share option structure set up in a way that liability for terminated or departing employees is limited?
9. Do you have just cause for the termination?
10. Is the dismissal being communicated to the employee in a clear and respectful manner?
11. If changes are being made to an employees role are those changes so fundamental as to result in a constructive dismissal?
12. If the changes do amount to constructive dismissal is the employment relationship one that would require the employee to take the alternate position to mitigate his or her damages?
13. Do you have an anti-harassment policy and has it been fully communicated to employees?
14. If you are terminating without cause have you provided sufficient notice and have you ensured that all potential damages are taken into consideration?
15. In your without cause termination have you considered the appropriate way to structure the notice for your business and have you considered all ways to lessen the damages payable by your business?
16. Does your business have adequate safety procedures in place and has the policy been communicated to the employees in a manner that breach of the safety procedure will justify termination?
- 17. Does your business have an adequate policy around alcohol and drug usage and has that policy been communicated to the employees in such a way that a termination on this basis will be found to be just cause?
Regardless of the size of your organization, your business will benefit from a partnership with your employment lawyer. Employees are your biggest asset and your biggest potential liability. Ensuring that your employment practices and policies are in line with the law, clearly communicated to your employees and in line with your companys values will assist with employee retention, mitigation of risk associated with terminations and protection of the company subsequent to termination or the departure of an employee.
Employment Policy Checklist
Social media policy
- Anti-harassment policy
- Progressive discipline policy
- Complaint policy
- Communicated to employees
- Incorporated into contract of employment
- Consistently applied
- Consistently updated and reviewed
Recruitment efforts - compliant with human rights legislation
- Preparation of job description/requirements
- Interview process
- Reference checks
- Consideration of inclusion of termination provisions
- Incorporation of company policies
Progressive Discipline Checklist
- Compliance with policy
- Fairness and reasonableness
- Communication to employee
- Opportunity to address concerns
- Termination meeting
- Structure of package
- Termination letter
- Personal belongings
- Employee assistance
- Conversion of company to personal benefits
The above article was
Prepared and Presented by:
Rose Keith, Trial Lawyer
Rose Keith Law Corporation
1486 West Hastings Street
Vancouver, BC V6G 3J6
Web site: rosekeith.bc.ca
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