Canadian HR Reporter

CANADIAN HR REPORTER March 7, 2016 INSIGHT 19 After-acquired cause for dismissal Validity of termination settlement when just cause discovered later Question: When can or can't after-acquired cause be used to reduce notice obligations? Answer: An employer may dis- miss an employee without just cause for any non-discriminatory reason, as long as it provides rea- sonable notice of the dismissal or pay in lieu of notice. Sometimes a situation arises where an employer has dismissed an employee without cause, but then discovers after the dismiss- al there was actually just cause to terminate the employment relationship. e doctrine of "near cause" — which years ago was relied upon by employers to reduce notice obligations upon dismissal — is no longer accepted by Canadian courts. It's now "all or nothing:" e employer either has just cause and no obligation to give notice of dismissal or it does not have cause and must honour its notice obligations. As such, if "after-acquired cause" is discovered by an em- ployer after dismissal, it may be relied upon to entirely extinguish the requirement to provide no- tice or pay in lieu of notice, but it cannot be used to reduce notice obligations. e British Columbia Court of Appeal's decision in 1989's Carr v. Fama Holdings is regarded as a leading authority on the concept of after-acquired cause. In Carr, the court confi rmed an employer can wrongfully dismiss an em- ployee and yet have its actions saved if it later discovers conduct that took place during the term of employment that would have jus- tifi ed dismissal for cause. An employer may add new grounds to justify dismissal for cause (meaning there is no re- quirement to give notice of dis- missal) where those grounds existed at the time of dismissal but had not yet come to the em- ployer's attention. However, if the employer was aware of the new grounds at the time of dismissal but did not rely on them, the employer will likely be considered to have condoned the employee's misconduct: See Lake Ontario Portland Cement Co. Ltd. v. Groner. Finally, it is important to re- member that the obligation of good faith in the manner of dis- missal imposes a behavioural requirement on employers to investigate allegations of miscon- duct and give employees the op- portunity to respond. e obligation also requires em- ployers not to fabricate grounds for cause or maintain unfounded allegations of cause. As a result, where an employer legitimately discovers after an employee's termination that the employee engaged in misconduct suffi cient to justify cause for dis- missal, the employer can rely on that misconduct to extinguish its notice obligations. However, employers should be cautious not to manufacture il- legitimate grounds for dismissal after the fact just to avoid a sev- erance obligation as damages will likely fl ow from that type of "bad faith" conduct. For more information see: • Carr v. Fama Holdings Ltd., 1989 CarswellBC 187 (B.C.C.A.). • Lake Ontario Portland Cement Co. v. Groner, 1961 CarswellOnt 70 (S.C.C.). Meghan McCreary is a partner prac- tising labour and employment law at law fi rm MacPherson Leslie & Tyer- man in Regina. She can be reached at (306) 347-8463 or mmcreary@mlt. com. Question: When can or can't after-acquired cause be used to reduce notice obligations? Meghan McCreary TOUgHeST HR QUeSTiON Employers should not manufacture illegitimate grounds for dismissal just to avoid a severance obligation. Giving the gift of presence Cultural change isn't an instantaneous event – it happens one person at a time and is built one conversation at a time A very close friend of my wife lost her mother a few weeks ago. In fact, this friend was my wife's maid of honour at our wedding. e funeral was, as you would expect, very sad, but buoyed by the mother's rich legacy gifted to her children and grandchildren. e priest talked about the gift of "presence," of- fered in the context that everyone present was there in loving support of the family. It was appreciated and impor- tant to the grieving process. We were reminded that each of us provided a very unique and per- sonal connection to the bereaved family members. Our presence demonstrated a genuine care and concern for each family member in mourning and it was this out- pouring of emotion that would sustain the family during this time of tragic loss. Watching my wife console her deepest friend reminded me, once again, that special relationships occur one person at a time. And this notion of "presence" has stuck with me. In the organizations in which we serve, and in our daily con- versations, do we give the gift of our presence? Are we emotion- ally connected with those who work with us in organizations, to the extent we genuinely care about them? Or is so much of it superfi cial? Creating true connection Last week, an executive sent me an article about holacracy and openly wondered whether this system of organizational gover- nance might reduce bureaucratic thinking and behaviour. We know that distributing au- thority can be a challenge, and of- fi ce politics can spoil relationships and dampen innovation. Holacracy within a group is a self-organizing entity with a spe- cifi c function and defi ned rules of engagement. It is centred on the work to be accomplished, whereas hierarchies tend to circle around the people. Focusing on the work and the outcomes, with joint account- abilities, has produced astonish- ing results in some companies. Zappos is perhaps the most pub- licized one and Tony Hsieh, CEO, demands that employees commit to the culture. In fact, if employees cannot subscribe, he will pay them to leave. Hsieh is a student of the science of happiness and Zappos seeks to engender happiness by balanc- ing four basic human needs: per- ceived progress, perceived con- trol, relatedness and connection to a larger vision. This is a very individualized approach and, as many organiza- tions would acknowledge, culture change also occurs one person at a time, built upon one conversation at a time. Meeting the four basic needs, which I think are self-evident, drives powerful, intrinsic moti- vation, but it takes two parties to create the loyalty and allegiance that lead to success. I ask myself whether we are building organizations that really care, or whether so much of what we do is shallow. Even at the most basic level, are our managers equipped to have the types of conversations that Hsieh would demand of his man- agement team? Some organizations under- stand the power of conversation. It is therefore timely that a Febru- ary SCNetwork event would take very practical look at coaching and the dividend received from that commitment. Rogers Communications call centres are our case study and they deploy 24 internal coach practitioners to train 400 front- line call centre managers. These managers learn to distinguish between coaching, t e a c h i n g , d i r e c t i n g a n d p er for mance management conversations, and the measurable results speak for themselves. I am sure this approach meets most of what Hsieh believes are key for his organization too, but I'm left to wonder how often coaches are actually "present" in these conversations. In this digital age, with short attention spans, our minds drift and we seem to become anxious quickly. In Sherry Turkle's book Reclaiming Conversations, she claims most of us consult our phones every six-and-a-half min- utes and she fears we are losing the art of conversation. "Face-to-face conversation is the most human — and human- izing — thing we do," she says. "It's where we develop the capacity for empathy." It was empathy and compas- sion the priest was speaking of at the funeral. Writer and man- agement consultant Margaret Wheatley has said: "Listening is such a simple act. It requires us to be present, and that takes practice, but we don't have to do anything else. We don't have to advise or coach or sound wise. We just have to be willing to sit there and listen." But we don't have time to sit still and listen, right? As one manager said about one of his staff — "I have enough of my own problems; I don't have time to listen to hers." is will never remotely meet the need of relatedness. My lesson is I need to remind myself constantly that cultural change happens one conversation at a time, and I need to be better at being present at each one, wheth- er consoling a friend, counselling on performance or facilitating a dispute. Ian Hendry is president of the Stra- tegic Capability Network and is vice- president of HR and administration at Interac in Toronto. is blog also appeared on LinkedIn and Canadian HR Reporter's website www.hrreport- er.com. I ask myself whether we are building organizations that really care, or whether so much of what we do is shallow. "'People work' is not easy work. To be effective, you have to be com- fortable delivering constructive criticism and, at times, you have to be honest that some employees don't have the potential or the com- pany doesn't have the opportunities to advance their careers as they dream. Performance reviews should be one of the moments em- ployees and managers look forward to in order to ensure everyone is on the same page. Instead, discomfort with difficult conversations makes it a disaster for many. With the next generation routinely dealing with conflict by text message, I am worried it will be increas- ingly harder to find good people managers in the future." — Joe Nunes, commenting on Claudine Kapel's blog "What's really broken with performance management?" Join the conversation. Comment on any blog on www.hrreporter.com. READER COMMENTS A very close friend of my wife lost her mother a few weeks ago. In fact, this friend was my wife's maid of honour at our wedding. e funeral was, as you would expect, very sad, but buoyed by the mother's rich legacy gifted to her children and grandchildren. e priest talked about the gift of "presence," of- fered in the context that everyone Ian Hendry GUeST COMMeNTaRY

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