Canadian Employment Law Today

The 'capital punishment' of employment law Just-cause dismissal can help employers get rid of problem employees, but they need to do their homework to make it stick BY ALEKSANDRA PRESSEY T he rapid developments of the #MeToo era have seen orga- nizations struggle to manage waves of sexual harassment complaints lodged by employees em- powered by the movement's push for widespread workplace reforms. Some of these allegations have resulted in swift dismissals after brief investiga- tions, with employers happy to be rid of alleged wrongdoers and eager to turn the page as they work to restore their workplace cultures. Indeed, as soon as employers think there is workplace misconduct — or become dissatisfied with employee per- formance — they're quick to move to terminate by asserting just cause. e trouble is that most do so without first taking adequate steps to minimize cost obligations through the implementa- tion of effective employment agree- ment clauses. A quick termination solves the prob- lem, or so they believe — at least until the bill arrives. Not their employment lawyer's fees, of course, but the cost to settle the matter when those terminated employees seek compensation for what they allege to be a wrongful dismissal. Many organizations are then forced to open their chequebooks and pay up to avoid protracted, often cripplingly ex- pensive, litigation. Eliminating or creating more problems? Paying out an individual who has acted inappropriately or made co-workers' lives miserable feels like an unjust re- sult to many, but on this issue the law is clear: while an employer does not require a good reason — or any reason — to terminate an employee's employ- ment, termination for cause requires a high threshold of proof. In fact, the Supreme Court of Canada has called dismissal the "capital punishment" of employment law, meaning that ter- minating for cause should be viewed as an option of last resort, to be used only after progressive discipline (such as suspensions or coaching) has been exhausted and other mitigating factors have been taken into consideration. In addition, courts have stood behind the principle that employees cannot be terminated for cause based on a mere allegation. at's why organizations should be deliberate in conducting comprehensive workplace investiga- tions into alleged wrongdoing, while bearing in mind that invoking just cause to terminate after a single workplace in- cident can be highly problematic. Only the most severe incidents of workplace misconduct can typically justify for- cause dismissal. Of course, many risk- averse employers will simply terminate an employee without cause and pay out applicable termination entitlements to limit the potential workplace fallout. Even when they have cause, employ- ers often undermine their ability to as- sert it because they misconduct them- selves during the termination process, or lack the technical legal grounds to justify dismissal in the first place. Con- ducting improper investigations is a common pitfall. If it's determined that an organization has prejudged the out- come of an investigation, hasn't taken steps to address and remove bias from the process or hasn't given the employ- ee a full and fair opportunity to respond to allegations he faces and provide an alternative explanation — in the event the inappropriate behaviour was ex- plicable and justifiable under human rights legislation, such as in the case of an addiction or a serious mental health issue that impaired his judgment — the investigation could be compromised. It's crucial that organizations take ag- gravating and mitigating circumstanc- es such as these into consideration throughout the process. In fact, mismanaging the termination process often winds up costing organi- zations more — sometimes much more — than had they taken a proactive ap- proach and invested in effective and en- forceable employment agreements and workplace policies. Now, it's important to note that the common law standard for cause can differ from the statutory standard to avoid termination or severance pay- ment. In Ontario, for example, just- cause dismissal is not enough to de- prive the employee of statutory entitle- ments on termination of employment. Not paying statutory minimums re- quires "wilful misconduct, disobedi- ence or wilful neglect of duty" which is an even higher standard than just cause at common law. Determining whether just cause for dismissal exists based on misconduct requires an objective, contextual analy- sis that depends on factors including: • e nature of the business (such as a safety sensitive environment) • e position held by the employee • e actual or possible consequences of the misconduct • Length of service • What the employee was doing at the time (if an employee was performing a function outside the duties for which he was hired, courts are less likely to find that just cause exists) • e individual's employment record (was it a one-off or a series of inci- dents?) • Whether the employee is entirely or partially to blame • e employee's mental state. It's even common for employers to assert just cause based on performance factors that may or may not be nega- tively impacting the business. A short- age of suitable work, the poor financial 4 Canadian HR Reporter, a Thomson Reuters business 2018 CASE IN POINT: JUST CAUSE WHEN AN EMPLOYEE is guilty of misconduct or poor performance, it may seem to be fairly straightforward that there's a good reason to cut the employee loose without having to worry about notice — especially if there is misconduct relating to harassment or workplace safety that can cause liability for the employer. However, such assumptions can be costly. There's a high bar for just-cause dismissal and if an employer is going to go that route to try to save on paying termination pay or pay in lieu of notice, it had better be ready to prove that the employment relationship can't be salvaged. BACKGROUND

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