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When The Waiting Game Turns Dangerous

Our employer clients often reach out to us with this kind of employee related scenario:  An employee has been underperforming. At first there were just small performance issues, but since the start of the pandemic they’ve noticed the quality of their employee’s work has seriously decline. The employee has been making mistakes, they’ve been rude to their colleagues, and they are missing deadlines. 

Finally, one day the employer decides that they’ve had enough.  The “last straw” incident isn’t anything monumental, but more of the same old conduct. The employer calls the employee into their office and advises that they are being terminated for just cause due to their pattern of bad behaviour. The employee is in shock, but the employer stands its ground.

Shortly after, the employer receives a lawyer’s letter from that employee’s counsel telling the employer that the employee was wrongfully terminated and demanding a large sum of money. The letter accuses the employer of terminating the employee in bad faith and alleges that the employer did not have cause to terminate the employment. 

What’s wrong with this picture?

Terminations Without Warning

There are two primary ways to end an employee’s employment in Ontario – with cause, or without cause. Without cause is far more common, where an employer can offer a departing employee either a reasonable period of working notice, or pay in lieu of said notice if their work is to end on that same day. This is the foundation of most termination or exit packages.

The other option is to let an employee go with cause, or with just cause, and the rules around this are far more stringent. Courts have established that just cause is a serious allegation – effectively the ‘capital punishment’ of employment law. There is no ‘near cause,’ and so deciding to let an employee go with cause is an all-or-nothing scenario. 

The intention of just cause is that an employee can be let go without any obligation to pay termination or severance pay. However, Ontario Courts have recently established that this is only applicable in the most extreme circumstances, such as wilful misconduct or wilful disobedience. Otherwise, in most cases an employer will owe the employee at the very least their minimum legal entitlements to termination (and possibly severance) pay under the Employment Standards Act

There is also a common misconception that a termination with cause needs to be a snap decision. This is true in some cases, but not always. Sometimes there is a single, culminating incident that is so severe an employer believes that immediate termination is their only option.

However, there are also instances where an employer has noticed a pattern of bad behaviour that is troubling. This can take place over days, months, or even years, but eventually an employer decides they simply cannot take it anymore. 

So, in those situations, must the employer provide advanced notice that the axe might potentially fall? 

What The Courts Say

In a recent court decision out of New Brunswick, Cumberland v. Maritime College of Forest Technology, 2023 NBKB 65, a forestry instructor had been employed by a college for 7 years prior to his termination. The employee was frustrated that he had been passed up for several promotions, given that he believed he was the most qualified candidate, and it strained his working relationship with his colleagues and superiors. 

Unfortunately, this strained relationship meant that his superior did not approach him about several complaints that had been made against his teaching. Even after the decision was made to terminate his employment, the College decided to wait until the following June as they did not want to disrupt the school year.

The Court heard significant evidence about the employee’s bad behaviour, however it was noted that “despite the obvious toxicity Mr. Cumberland’s behaviour was creating at the College, neither Mr. Marshall nor Mr. Davies did anything to address the significant concerns directly.” Instead, due to the strained relationship with his superiors, “Mr. Cumberland’s supervisors likely determined the employment relationship was not salvageable and thereafter chose to take the path of least resistance with Mr. Cumberland.”

The employee’s bad behaviour was not in dispute, but the employer’s decision to delay action and avoid confrontation proved problematic. The Court cited The Law of Dismissal in Canada, which states:

“If an employer learns of an act of misconduct on the part of an employee, the employee must be terminated immediately or after the employer takes a reasonable time to consider its position. If the employer does not do so, the employee’s misconduct will be held to have been condoned and the employer will then be precluded from dismissing the employee for an act at some later date.”

The Court did not question that the employee had behaved inappropriately towards his students, his colleagues, and his superiors. Moreover, he was such a rigid person that even if he had been given the opportunity to course correct, he was unlikely to change. “However,” said the Court, “he was never given the chance, and he is therefore entitled to the benefit of the doubt”.

The Court ruled that the employee was not dismissed with just cause and was therefore entitled to 7 months’ pay in lieu of notice. 

Final Thoughts

The above situation is frustrating because it was so easily avoidable with a different approach. Had the employee been warned about his conduct early, and these warnings and conversations documented thoroughly and presented to him, one of two things would have happened. Either the employee would have course corrected his behaviour given the opportunity, or his employment could have been terminated with just cause.

This is why it is crucial to reach out to an employment lawyer at the first signs of trouble, not the last! Making the right strategic decisions early can significantly impact a business’ bottom line, and failure to act can have an equally negative impact. We routinely support employers throughout the Cambridge, Kitchener, and Waterloo regions who find themselves in difficult situations. Contact us today to set up a consultation.