While the current pandemic forced many employers to dismiss some employees without cause, there remains a number of employers who would like to rely on terminating an employment relationship for cause without providing notice or pay in lieu.
Just cause terminations are known to be the capital punishment, if it were to ever exist in Canada, for employment relationships. This means that an act must be particularly egregious as to remove the employees’ entitlements. This could range from willful misconduct, bad performance, all the way to off-duty conduct, in some instances.
Some employers attempt to rely on just cause terminations to limit their payments. That said, considering the seriousness of just cause terminations, employers must proceed with caution. Alleging cause, when none existed, may attract significant costs if alleged improperly and for malicious reasons.
While dismissals are perfectly within the purview of employers, and even for no reason, alleging cause to disentitle employees of their minimum entitlements under the Employment Standards Act, 2000, is considered a serious conduct of bad-faith on the employer.
Courts have decided that employers must engage in a form of progressive discipline, or a form of Performance Improvement Plan, before they can terminate for cause.
In fact, alleging cause doesn’t only affect entitlements with the employer. Issuing a Record of Employment (ROE) with cause on the form are likely to disentitle employees to even their Employment Insurance entitlements.
As such, employers and HR professionals should only allege cause upon termination after doing proper due diligence with a workplace lawyer. It is a praxis in employment law to have the punishment fit the crime. However, correct and consistent documentation of improper conduct by an employer can assist in demonstrating cause.
For frequent misconduct or performance issues, following progressive discipline can support termination for cause where the employee fails to improve, despite the employer providing several opportunities and support in the process.
Documentation is the most important form of evidence. As such, having an employee file with updated disciplinary issues would be invaluable when and if litigation arises. Proper documentation helps employers feel more confident about their process and gives them details if they need to review at a later date.
A maintained record of the communicated progressive discipline policy allows the employees to understand how they may be reprimanded for misconduct, and ensures that elements of fairness, transparency, and honesty, are alive and well in the organization.
Progressive discipline uses a progression of consequences that gradually increase in severity to deal with the employee’s continued failure to meet expectations. While progressive discipline signifies that the employer takes these issues seriously, it also demonstrates a fairness with the use of proportionality, where the conduct is weighed against severity. It also allows the employee the opportunity to understand their shortcomings along with repeated multiple opportunities to correct their behaviour.
While progressive discipline is typically meant to correct misconduct, to inform the employee of the performance issue, and to provide them with an opportunity to improve, it could also be improperly used by employers as building blocks to justify a just cause termination.
Employers should refrain from using progressive discipline measures or performance improvement plans for the purpose of just cause terminations. They are there to correct but can be relied on at a later date to justify a for cause termination.
Best practice for progressive discipline
The typical progressive discipline plan should begin with less serious consequences and more informal discussions, and gradually progress towards more severe disciplinary actions. Below is an example of a progressive disciplinary plan:
- Informal discussion
- Verbal warnings
- Written warnings
The use of warnings is vital to demonstrate an employer’s effort to rectify performance or misconduct issues. Those same warnings must outline future corrective measures and dates to allow the employee the opportunity to be informed.
Issuing more than one warning results in multiple opportunities for the employee to improve their conduct, and can make a strong case for just cause in addition to other progressive disciplinary steps where the employer is able to prove that they have exhausted all of their other options.
Conversely, some just cause terminations are justified and permitted without the issuance of any prior warnings. This could include violence, theft, among others.
The Ontario Court of Appeal affirmed in Dziecielski v. Lighting Dimensions Inc., 2013 CarswellOnt 12765 that a single act of misconduct may amount to a finding of just cause dismissal. In these cases, the degree and character of the misconduct must cause an irreparable break down of the employment relationship. While this can occur, it is quite rare for the courts to find that a just cause dismissal existed where the employee was dismissed after one act of misconduct.
Employers should ensure they keep a written record of all disciplinary action, beyond just written warnings, that can be used in the event of a wrongful dismissal lawsuit to demonstrate the implementation and use of progressive discipline.
Proving just-cause through progressive discipline
Progressive discipline may feel tedious, daunting, and unnecessary. However, the invested time and effort will likely assist when attempting to prove a just cause dismissal.
In Nossal v. Better Business Bureau reflex, (1985), 12 C.C.E.L. 85 (Ont.C.A.), the courts established that past incidents of misconduct can be combined with subsequent misconduct to determine whether multiple misconduct amounts to just cause. As a result, gradual progression in disciplining an employee can be useful to employers in upholding a just cause dismissal at court.
In addition to its use in justifying a just cause dismissal, progressive discipline can be used to improve the employment relationship between an employer and an employee. Afterall, the main goal of progressive discipline and Performance Improvement Plans are the amelioration of employees’ performance as well as provide the opportunity for good-faith explanation and growth.
Not only does this foster a more positive working environment despite a conflict or misconduct, it demonstrates the employer’s willingness to work with their employees in arriving at a favourable solution for both.
By Christopher Achkar