Employment Law Ch.

14 - Dismissal With Cause Introduction

Under common law in Canada, an employee may be dismissed summarily - without advance notice or pay in lieu - only for just cause All other terminations require reasonable notice or pay in lieu, unless there is a clearly expressed and enforceable term in an employment contract that establishes an alternative notice requirement Just Cause requires that the employee breached the employment contract in such a fundamental way that the employer is no longer bound by the obligation to provide notice or pay Existence of just cause is decided on a case by case basis ultimately decided by court and precedence Determined only after the employee brings about a wrongful dismissal action

Employer can take measures such as progressive discipline and ensuring procedural fairness to improve chances of a successful defence Overview of Just Cause Requirements

Onus of Proof Is on an employer to show, on a balance of probabilities, that an employee breached an employment agreement in a fundamental way An employer that alleges dishonest or illegal acts to justify a dismissal may be required to meet an even higher standard of proof than balance of probabilities Just cause is all or nothing

If an employees misconduct or incompetence fails to establish just cause, an employer is obliged to

provide reasonable notice or pay under common law - no reduction period owed to that employee Proportionality and the Contextual Approach Unequal bargaining relationship exists between employer and employee, especially at time of dismissal

Proportionality - The idea that any sanction must be proportional to the conduct to which it relates Most types of misconduct or other incidents must occur more than once for dismissal to be ok

Summary Dismissal - Few acts of misconduct can constitute just cause as they greatly affect the employment relationship (theft, assault, significant sexual harassment) Progressive discipline includes verbal warnings, written warnings and final written warnings

In some situations, court recognizes an employers right to implement unpaid suspensions

Contextual Approach - Courts now consider the nature and seriousness of an alleged offence in the context of the overall employment relationship When an employee has a good record and extensive length of service, a single act rarely constitutes dismissal Procedural Fairness

Helps employer successfully demonstrate just cause An employee should be given ample opportunity to respond to allegations before he is fired Allegations should be conducted in good faith, thoroughly and promptly Investigation should remain confidential A decision must be made in good faith - not arbitrarily or for ulterior motive Sanction should be proportionate to misconduct within overall context of employment relationship An employees response [remorse, denial, attempts to conceal information] to allegations of wrongdoing is important

Obeng vs. Canada Safeway Ltd., 2009 Employees failure to be truthful during investigation justifies dismissal Safeway manager was thought to be stealing groceries - he denied allegations and became very upset

He denied stealing, or even holding a grocery bag, even though several employees witnessed it In court he admitted to holding a grocery bag for the purpose of putting back misplaced items Obengs failure to provide a complete and truthful explanation for his behaviour during the investigation was a breach of his duty of honesty, which constituted just cause for dismissal

Stating Grounds of Dismissal An employer is not prevented from changing its position: it may dismiss an employee without alleging just cause and later, if employee sues, assert that it actually had just cause Especially when original decision was motivated by desire to spare employees feelings In most cases it is sensible for an employer to allege just cause in termination letter

After-acquired Cause - Justification for dismissal based on facts discovered after dismissal, or on grounds that differ from those alleged at the time of dismissal. Goodwill Payment - Employer has just cause, but still wants to provide her with money. Employer should clarify the payment is made on a without prejudice basis - the payment does not imply that the employer owes the employee reasonable notice of termination May help to avoid litigation Condonation Employer must be careful not to condone misconduct that it intends to rely on as just cause for termination Occurs when an employer who discovers an employees misconduct or poor performance fails to respond within a reasonable time A reasonable amount of time is allowed so the employer can consider their response to the incident Establishing Just Cause Under Common Law Two types of employee conduct that can justify dismissal without notice: Misconduct - such as acts of theft or insubordination

 Problems related to job performance

Dishonesty One of the most serious acts of misconduct as it undermines trust With contextual approach, it does no longer always constitutes just cause for dismissal

Dishonesty that does not go to the root of an employment relationship is not just cause Could be seen as just an error in judgment rather than a reflection of an untrustworthy character

McKinley vs BC Tel, 2001 Employee occupied senior financial position when he began suffering from high blood pressure He took a leave of absence and requested he be placed in a position of less responsibility

Shortly after he was fired, and sued for wrongful dismissal Employer applied to the Court that the dismissal was based on dishonesty - the employees doctor had advised him a certain medication would control his blood pressure and ee did not reveal this info Court found nature and extent of McKinleys dishonesty did not fundamentally undermine the employee-employer relationship Employer was required to provide McKinley iwth pay in lieu (approximately $110k)

If dishonesty violated essential contract element, breached the bond of trust between parties, or was directly inconsistent with an employees obligations to an employer, it would likely justify summary dismissal. Just cause may exist even when an employee does not benefit personally from the misconduct and it was authorized by the supervisor Weisenberger vs. Marsh Canada Ltd, 2003 Employee regularly added a fee to the premium quoted without clients knowledge, and the extra income went to the local branch Practice involved elaborate false invoice scheme and was endorsed by supervisor

Ee claimed he did not know what he was doing was wrong since he was acting on instruction Court found it was not credible that he did not know the practice wrong and he knew it would not have been condoned by the head office Conduct was fundamentally incompatible with his duties to his employer When dealing with dishonesty, employer can put itself in the best situation by: 1. Providing clear written policies that outline required behaviour

2. 3.

Getting all the facts When allegations cannot be proven, provide a reasonable separation package

Insolence and Insubordination Rare but not impossible that a single act of insubordination provides just cause for termination

 Ie. Assault on a supervisor, or a deliberate contravention of a policy that results in a significant loss
Must apply principle of proportionality - a single incident may be sufficient when: The employee and supervisor could no longer maintain working relationship,

The incident undermined the supervisors credibility in the workplace, and As a result of the incident, employer suffered financial loss, loss of reputation, or its business interests were seriously prejudiced Usually an employer must show a pattern of insubordinate or insolent behaviour that continues despite clear warnings Incompatibility Difficult for an employer to dismiss because employee does not fit in, or has unpleasant personal habits in the workplace - General incompatibility is usually too vague to constitute just cause Could be upheld if incompatibility is with dominant workplace culture

Example, a hairdresser who has greasy hair, smoked heavily and neglected his appearance could be fired for incompatibility since his personal habits directly harm the business

Off-Duty Conduct Generally, conduct that takes place outside the work place cannot provide just cause Exception: If employer can demonstrate the off-duty conduct harmed its business or reputation

Depends on employees position, nature of conduct, and how it reflects on the business
Employer needs to show a substantial and real connection between the conduct and its wellbeing An employee placing himself in a position that conflicts with the interests of the employer (ie. With a competitor) would constitute just cause Common-law duty of loyalty would have been breached

Potential harm to the employer must be significant enough to justify dismissal

Disobedience Usually best dealt with through progressive discipline

For a single act to constitute just cause, it must be deliberate, entails no element of misunderstanding, and causes substantial harm It is relevant whether the act relates directly or indirectly to the job

Must determine whether act is an error in judgment or a wilful act of defiance

Absenteeism and Lateness Two types of absenteeism under common law: culpable (blameworthy), innocent (blameless)

Culpable - Occurs when an employee is absent from work without a good reason Employer is entitled to impose disciplinary action

A single incident still rarely justifies dismissal Best addressed through clear, communicated and consistently enforced policy

 When deciding if ongoing lateness constitutes just cause, employer must consider context of employment relationship - frequency, reasoning, harm it imposes to employer, policies Innocent Absenteeism - Occurs when employee cannot come to work for reasons beyond their control If absenteeism stems from a disability, employer has duty to accommodate to undue hardship

Minor illnesses do not qualify as disabilities under the Code If any part of an employees absences results from a disability, an employer cannot rely on these
absences in determining whether it has just cause for dismissal Sexual Harassment Many types - offensive humour or comments - warrant progressive discipline Just cause is often found in more serious cases, especially those involving supervisors

Employer having a proactive approach to sexual harassment in the workplace, and using procedural fairness will help justify dismissal Employer has the duty to protect their workforce, and protect the firm against civil suits

Situations involving supervisors are serious as there is a power balance in the relationship Consent could be a result of the subordinate feeling their job may be in jeopardy if they do not agree Business functions that involve a social component still remain within the employment relationship

Intoxication Human rights issues arise in the case of addiction as a disability

Violation of policy that prohibits use of alcohol or drugs or intoxication on the job or at lunch may constitute grounds for dismissing an employee A single violation by an employee who is not in a safety-sensitive position is not enough

Misconduct needs to be viewed in the context of the entire employment relationship

Ditchburn vs. Landis Sales exec of 27 years had not been able to keep up with his work and was demoted

He arranged a goodbye lunch with a long time client to say goodbye, and they drank several beers After the lunch the employee and client were involved in a fight, and DItchburn reported it

Ditchburn was fired for violation of company intoxication policy and driving a company car while impaired during work hours while engaged in company business Judge found although he engaged in a flagrant breach of policy, the incident was isolated and reflected uncharacteristically bad judgment Following factors should be considered: Was business harmed

How have these situations been handled in the past Does employee work in a safety-sensitive area? Endangering other employees? Was performance affected?

 Is there a company policy in place that addresses this issue?

Substance Abuse Considered to be a disability and thus a prohibited ground of discrimination Employer must accommodate to the point of undue hardship (providing rehab, time off)

Every case depends on different facts If rehab is unsuccessful and dependency continues to affect the workplace, employer can dismiss on the basis of just cause or frustration of contract

Incompetence General incompetence is one of the most common grounds for dismissing an employee and one of the most difficult grounds to prove Employer must show that an employee has fallen below an objectively determined level of performance and that the problem lies with the employee and not with other factors, such as lack of training Must ensure: Requirements of job are clear, reasonable and applied fairly

Adequate training is provided Performance is demonstrably below average and employee receives warning that jobs in jeopardy Employee understands what is reasonable performance and is given time to achieve it Employer documents every aspect of its corrective plan

It is difficult for an employer to demonstrate just cause for dismissing a long-term employee whose performance has been accepted for years Employer would usually provide pay in this circumstance A single incident may be just cause only in the most extreme situations - such as recklessly incompetent behaviour that leads to serious financial loss for the employer Grounds That Cannot Constitute Just Cause Human Rights Code - Employer cannot dismiss or penalize employee for asserting rights under the Code Employment Standards Act, 2000 - Cannot dismiss or penalize for asserting rights under the Act, including the right to pregnancy or parental leave Occupational Health and Safety Act - .... including the right to refuse unsafe work Workplace Safety and Insurance Act - Cannot dismiss or penalize employee who is absent from work for a work-related cause and has a right to be reinstated under the Act

1. 2. 3. 4. 5. 6. 7.

8. 9. Pay Equity Act 10.

11. Labour Relations Act, 1995 - Cannot dismiss or penalize for a union-related activity