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How to Deal With Employee Misconduct
by Leanne
E. Standryk
The most basic obligations of
the employment relationship are the employee’s duty to work and the employer’s
duty to pay for the work. These principles are at the root of every employment
relationship. From these obligations arise certain other incidental
obligations, for example, employees are required to perform work while at work,
perform work in a competent manner and report for work on a regular basis,
unless they have a justifiable excuse. Employers on the other hand have an
obligation not only to pay the employee for work performed but to pay the agreed
upon rate, treat employees fairly with civility, decency, respect and dignity.
In a perfect world, everyone complies with their obligations. Employers manage
the workplace in a fair and efficient manner and employees conduct their work in
a satisfactory manner in compliance with all reasonable rules and policies
established by their employer. In a perfect world, it would never happen – but
the reality is, many employers will one day be faced with the dilemma of
deciding what to do and how to deal with employee misconduct.
When dealing with employee
misconduct, companies must keep careful mind of the legislative and common law
legal framework that governs the employment relationship. Regard must be made
to relevant legislation such as the Employment Standards Act 2000, Ontario
Human Rights Code, Workplace Safety and Insurance Act, Occupational Health and
Safety Act (reprisal provisions) and to principles such as
constructive and wrongful dismissal.
To effectively manage the
employment relationship and deal with potential misconduct, employers are well
advised to develop and maintain reasonable rules of conduct and performance
expectations. Communicate these to employees and ensure consistent application
and enforcement. Provide appropriate counseling and training to your
workforce. Carefully consider each incident of misconduct and the appropriate
reaction. Avoid knee jerk instantaneous reactions. These only serve to
increase potential employer liability.
The purpose of this paper is
to review strategic practical methods of dealing with employee misconduct, to
inform the reader of factors to consider when faced with the dilemma of deciding
what to do and how to deal with employee misconduct.
The Starting Point
The Employment Contract
There is no question that one
of the most valuable tools an employer can have is a well written employment
contract for non-unionized employees. A written contract provides a permanent
record of the terms and conditions of employment and will serve to reduce any
misunderstanding or ambiguity between the employer and the employee. The
contract no doubt should include not only the calculation of compensation but
also outline the terms of probation, an acknowledgement of compliance with
employer policies and workplace rules, restrictive covenants (where appropriate)
and termination provisions.
The contract is the embodiment
of rights and obligations for both the employer and employee. By way of
incorporating the terms and conditions surrounding the termination of
employment, the employer substantially decreases the risk of being sued for
wrongful/constructive dismissal.
Policy Manuals, Procedures and
Workplace Rules
Policy manuals, procedures and
workplace rules form an important part of an employment relationship. These
documents commonly contain the details of the relationship between the employer
and employee and often “fill the gaps” between the formal offer letter and the
actual working conditions. They help:
1) set the standard
for employee conduct and provide guidance to management, supervisors and staff;
2) tell employees what
you expect from them and what they can expect from you in return;
3) create a reference
guide for everyone on how you want certain issues handled and shape the culture
of your organization;
4) provide a mechanism
for dispute resolution; and
5) minimize the risk
of litigation.
The effect and enforcement of
your policies will depend on a number of factors including:
• When the policy was provided
to the employee;
• Whether the employee agreed
to be bound by the policy, is aware of the policy and its contents;
• Whether the policy is
reasonable;
• Whether the policy was
applied consistently in the past;
• Whether the employee
received counseling and training with respect to the policy.
Provide initial orientation of
employer policies at the time of hire. Provide a copy of the policy/manual to
the employee at the time of hire. Make the policies available to the employees
in a central location for their review. With the growing use of computers,
thought should be given to creating an Intranet page where such policies are
posted for employees to review as necessary.
The importance of informing
employees of policies and consistent enforcement cannot be understated. In
Lambe v. Irvin Oil Ltd. [2002] N.J. No. 316, the employee was terminated for
breach of company policy relating to the use of the company vehicle, telephones
and credit cards for personal benefit. Rather than having a written policy, the
company relied on “common sense” to argue that the use of company property for
personal use justified termination of the employment relationship. The employee
argued that he often used his personal vehicle on occasion for company use and
felt justified in filling his car with gas using the company credit card.
The court was critical of the
fact that the employer had no policies in place. The Court recognized that in
order to justify the penalty of termination for breach of company policy, the
policy would have to be:
1)
reasonable in its terms;
2)
received by the employees;
3) known
and understood by the employees;
4)
consistently enforced throughout the company; and
5) clear
as to the consequences of the breach.
Courts have consistently held
that in order to justify a termination of employment, the implications of the
policy breach would have to be sufficiently serious and there would have to be
an absence of reasonable excuse by the employee. This being said, even where
policies are clear and well-known, an employer still must examine the breach
considering all of the circumstances in order to determine whether termination
is an appropriate penalty. Where termination would be too harsh, the employer
must either terminate without cause or use corrective measures short of
dismissal.
The Problem
Employee - Distinguishing between Culpable and Non-Culpable Conduct
It is an implied term of the
contract of employment that an employer may terminate an employee for just
cause. In the employment context, just cause for dismissal means that the
employer has an appropriate reason or “justification” for firing an employee.
In the same situation, the employer is relieved of the obligation to provide
notice of termination or payment in lieu of such notice. Where just cause is
present, the employer is entitled to summarily dismiss an employee and
unilaterally end the employment relationship.
Traditionally employers were
only required to establish a single incident of serious misconduct in order to
justify terminating an employee for cause. But in a number of decisions, judges
have made it clear that the employment relationship should not be severed
lightly. The standard therefore to uphold a dismissal for just cause is
becoming more and more challenging.
Courts have long recognized
the central role that employment plays in the daily aspect of an individual’s
life. Chief Justice Dickson (as he then was) stated in the Supreme Court of
Canada’s decision in Reference re: Public Service
Employee Relations Act: "
Work is one of the most fundamental aspects in a
person’s life, providing the individual with a means of financial support and,
as importantly, a contributory role in society. A person’s employment is an
essential component of his or her sense of identity, self worth and emotional
well being."[1]
Given the importance of work
to an individual’s identity, the courts have gradually narrowed the scope of
just cause in order to recognize and address the power imbalance that often
exists between employer and employees. To uphold a termination for just cause,
the employer must be prepared to show that the misconduct was of such a nature
and character that the employment relationship was effectively at an end. This
requires that the grounds for the misconduct be examined objectively and
assessed on a case-by-case basis in light of the employee’s position, length of
service, past record and circumstances giving rise to or surrounding the
misconduct to determine whether termination for just cause is in fact a
proportional response. In analyzing an employee’s conduct a distinction must be
drawn between culpable and non-culpable conduct.
Culpable conduct is conduct
within the employee’s control which gives rise to an inference of
blameworthiness. Non-culpable conduct is conduct that is beyond the employee’s
control and usually not correctable through punishment. While non-culpable
conduct may give the employer grounds to terminate the employment contract, the
concept of cause generally refers to culpable conduct within the employee’s
control. There are certain actions which may more clearly indicate culpable
conduct, ie., the employee shows continued and “willful disobedience”, steals
from the workplace or engages in conduct which is discriminatory, harassing or
harmful to other employees.
Internet Abuse
Internet abuse by employees – in every profession,
in every rank, and of every nature – is a serious problem for employers seeking
at once to integrate the internet as a high efficiency business tool and at the
same time manage its alluring, non-work related temptations. While the internet
and e-mail access have increased the speed of doing business and lowered its
cost, they have also introduced a potential minefield that lurks behind every
computer screen. One author has described it “many times, internet access is an
open invitation to waste time.”[2]
The types of inappropriate
internet and e-mail usage span a wide spectrum. One can find online gaming and
gambling, pornography, chat rooms, hate sites and copyright violations. Without
adequate systems in place to monitor employee usage, most employers will be
completely unaware of the abuse taking place.
Some may argue that employers
who allow some form of personal use during work hours may be creating a more
productive workplace, as employees will have fewer reasons to take the time to
physically leave the office to tend to their personal errands such as banking.
However, whether and to what extent to allow personal access to the internet is
a business decision. A review of the case law makes it clear that personal use
does not have to include accessing or distributing inappropriate material in
order to warrant discipline. “Cyber-slacking” is a modern variation of the age
old problem: employees spend their time doing anything but working. The
question then is how much is too much to equal culpable conduct deserving of
discipline?
In Mount
Royal College and Mount Royal Support Staff Assn. (Horan Grievance),[3]
the grievor was dismissed due to excessive use of the employer’s resources,
equipment and the internet to further her part-time dog breeding business. The
grievor was employed for a period of 14 years as the library secretary at the
time of her dismissal. She admitted to using her work e-mail for personal
matters but said it was common for employees to do so. On one day she received
69 personal e-mails. The arbitrator concluded that the use of the employer
provided e-mail amongst other resources was not culpable in and of itself since
the employer’s policies were ambiguous and inconsistently applied. The problem,
however, was the “amount of time the grievor spent using the equipment during
her regular work hours”[4]
Despite the fact that the employer had not raised any concerns about the
grievor’s work performance and that her performance appraisals were positive,
the Arbitrator stated the following in upholding the dismissal:
It is true that there were no specific concerns
demonstrated about the quality of the work assigned to her. In fact, the
Grievor’s recent performance appraisals were positive. This is not the issue,
however. An employer has a right to expect employees to focus their attention
during working hours on activities that benefit the employer. It is reasonable
for an employer to instruct employees to refrain from devoting substantial work
time to personal matters. The College’s direction to the Grievor was explicit –
do not perform personal work on College time. Because the Grievor disobeyed
this order, I can only speculate on how much more productive and valuable her
services would have been to the College had she devoted the time spent on
personal matters to work on behalf of the College. Clearly she had an
obligation to the College in this regard and clearly this was an obligation that
she knowingly did not fulfill. Thus, the fact that the Grievor adequately
performed work assigned to her cannot shield her from the consequences of
deliberately engaging in personal work once assigned tasks were completed.[5]
In Dupont Canada Inc. and C.E.P. Local 28-o
(Maitland Site)[6]
the employer discovered that the grievor was using a female co-worker’s computer
to access the internet and download pornographic files. The grievor had
by-passed the log-in requirement and evaded immediate detection. The employer
later discovered it was in fact the grievor who had been engaging in the online
activity. The grievor had access to his own computer but deliberately chose to
mask his behaviour by using a co-worker’s computer. Computer disks were
obtained from the grievor’s locker containing images of nude women, group sexual
activity, etc. The majority of the Board concluded that the grievor’s
termination was justified, despite the fact that “there is some form of
inconsistent enforcement of the penalties“ regarding the use of computers, while
not models of clarity, clearly were known by the Grievor who admitted he
breached these.”[7]
In the case of Canadian
Union of Public Employees, Local
37 and Calgary (City) (Graham)[8]
the grievor was employed in the city’s waterworks unit where, among other
things, the city’s drinking water safety levels are tested. The employer’s
internet policy permitted personal use of the internet “for occasional personal
obligations without criticism.” The grievor was a senior operator with 23 years
service, was suspended and ultimately dismissed after he failed to respond to
alarms on more than one occasion. These alarms are set off to notify employees
in the unit that chlorine levels in the water have dropped below acceptable
levels, putting the city’s water supply at risk for higher levels of bacteria
and increasing the potential for health risks to the community. One alarm
lasted for 2 hours without the grievor making any attempt to respond or to
inform his immediate supervisor. It was discovered that the grievor had been in
an online chat room that day for 2 hours and 50 minutes. The personal nature of
the messages made it clear that the grievor was not attending to his
responsibilities at all. In upholding the termination, the Board states:
By his actions he has shown
himself to be untrustworthy, to lack the credibility and honesty of a person
entrusted with caring for the health and safety of the City’s drinking water.
As an employee of 23 years, the
grievor knew better. He knew the City internet policy and his foreman had
spoken to him on 3 separate occasions about the need to respect the City’s
policy. Knowing this the grievor made a decision and abused the policy.[9]
Although it is not clear
whether the grievor was accessing inappropriate chat rooms or making
inappropriate statements in these chat rooms, it is clear that his personal use
interfered with his job and compromised the reputation and integrity of the
employer’s business goals and expectations. This was sufficient reason for
dismissal.
In considering appropriate
discipline on cyber-slackers, employers must also be aware that arbitrators have
been willing to entertain the possibility that internet addiction, either
independently or as a part of a larger psychological problem, may qualify as a
disability in certain circumstances. If so, it would be deserving of reasonable
accommodation under the Ontario Human Rights Code.
In the case of
City of London and C.U.P.E. Local 101 (M.D.)
[10]
the grievor was a case worker in the
Ontario Works division of the City and was terminated because of his increasing
appetite for viewing pornography from his workspace computer. The grievor was
employed for a period of 10 years and had never been disciplined prior nor had
he been criticized in any fashion for his performance. The grievor admitted at
the outset he began to view pornography “mostly during lunch but occasionally
during work hours. At the end, I’d log on first thing in the morning and it’d
be minimized on my tool bar all day”.
The grievor was spending
approximately 2 hours every day while working, viewing pornography. The
arbitrator noted that this was a significant amount of time. The grievor had a
history of mental illness and the employer was aware that he had been diagnosed
as a paranoid schizophrenic. The grievor was successful in arguing that he had
an addiction to viewing certain sites and that his viewing of pornography was
causally related to his medical condition. In the end, the arbitrator found
that the employer had just cause to discipline but that discharge was not
appropriate in the circumstances.
In the end, employers should
be aware that decision makers have applied the traditional approach regarding
the discipline of cyber-slackers. Ultimately, the punishment must be
commensurate with the misconduct, taking into account all relevant mitigating
and contextual factors.
Harassment
Harassment is defined in the Ontario Human Rights
Code as “engaging in a course of vexatious comment or conduct that is known or
ought reasonably to be known to be unwelcome.[11]
Every person who is an employee has a right to
freedom from harassment in the workplace by the employer….or by another employee
because of race, ancestry, place of origin, colour, ethnic origin, citizenship,
creed, age, record of offences, marital status, same-sex partnership status,
family status or disability.[12]
The Human Rights Code
also guarantees that “every person who is an employee has a right to freedom
from harassment in the workplace because of sex by his or her employer…or by
another employee.”
In Geluch
v. Rosedale Golf Association, Limited[13]
an Ontario court action, the plaintiff
was hired to the position of General Manager. The Club had a volunteer Board of
Directors that relied on the General Manager to oversee the Club’s operations,
to run special events and to attend all committee and Board meetings. The Club
terminated Geluch’s employment in response to a complaint made by a former
employee of the Club, Anne Taylor. Taylor alleged that she had been harassed
and abused by Geluch during her time at the Club. The Board voted to dismiss
Geluch immediately.
Geluch brought an action for
wrongful dismissal and claimed he was terminated without cause and was therefore
entitled to reasonable notice of termination, unpaid vacation pay, aggravated
and punitive damages as well as compensation for his mitigation costs. The Club
argued just cause for termination and that Geluch had breached the terms of his
employment by engaging in abusive behaviour towards Club staff and sexually
harassing employees. The Club also claimed that Geluch had engaged in improper
use of the Club credit cards, paid out salary increases in a lump sum without
Board authorization, abused his food and wine privileges and withheld financial
information from the Board of Directors.
Madame Justice Himel, in her
decision, noted that because there was no fixed law defining the degree of
misconduct that justifies dismissal, a court must consider the nature of the
misconduct and it consequences within the totality of the employment context,
including the nature and history of the employment relationship. Courts must
also be mindful of the fact that work is an essential component of one’s
personal identity,
The Court reviewed the evidence relating to the
allegations and concluded that the Club had failed to establish cause for
dismissal. Although Geluch had behaved inappropriately toward employees on
occasion, the incidents were not serious and there was no pattern of behaviour
sufficient to justify summary dismissal.[14]
The decision is important given the Court’s
comments with respect to the Club’s response to the harassment complaint. The
Court held that the club’s Board had been misguided in its response to the
harassment allegations. When the Board heard the allegations against Geluch, it
should have directed that an independent person – not a Board member – be
retained to investigate the matter fully. The Plaintiff should have been
suspended with pay, pending the completion of a full investigation and then,
given a full opportunity to respond to the allegations. Information collected
during the course of the investigation should have been presented to the Board
for impartial determination. Madame Justice Himel further stated that, in a
workplace investigation, procedural safeguards must be put in place. After
reviewing the surrounding circumstances, the Court found that Geluch, as a long
standing employee was not treated fairly by the Club and was not afforded any
opportunity to tell his side of the story or respond in any way.[15]
The treatment of Geluch by his employer was found by the Court to be
particularly harsh given that Geluch had never been given any warnings about his
behaviour and had no record of discipline in his employee file. Having
concluded that the employer failed to establish just cause, the Court awarded
Geluch the equivalent to fifteen months’ reasonable notice. In making her
decision Madame Justice Himel considered the fact that Geluch’s prospects of
re-employment had been substantially hampered by the circumstances surrounding
his departure from the Club. The Court awarded a further two months’ notice in
Wallace damages.
Despite the decision in Geluch, the majority of
the case law reveals a commitment of the Ontario Court of Appeal to uphold
termination of employees in situations of investigated and substantiated sexual
harassment in the workplace. In Simpson
v. Consumers’ Association of Canada et al.
[16]
, the plaintiff was dismissed from his
position as executive director of the Consumers’ Association of Canada (the
“Association”) for sexually harassing female employees. The plaintiff sued the
Association for wrongful dismissal. The trial judge allowed the action. He
found that six different incidents of sexual harassment had taken place, but
that they had occurred outside of the workplace and as such, found that the
Association did not have just cause for dismissal.[17]
He based this decision also on his findings that the Association did not have a
sexual harassment policy; that it was a working environment in which certain
sexual conduct was tolerated; that some of the impugned conduct was consensual;
that one of the women had forgiven the plaintiff’s conduct; and that his conduct
was unrelated to other events, such as the women’s resignations.[18]
Feldman, J.A. reviewed each of these reasons and
allowed the appeal. She found that because the trial judge placed much emphasis
on his finding that Mr. Simpson was a credible witness, in contrast to his
finding that the complainant women were exaggerating or lying, he “failed to
consider objectively Mr. Simpson’s admitted conduct toward female employees.”[19]
She concluded that “viewed objectively and in its totality, the conduct of the
respondent as revealed in [the six incidents] constituted sexual harassment
warranting dismissal.[20]
In
Bannister v. General Motors of Canada Ltd.[21]
the Ontario Court of Appeal again overruled the trial judge’s finding that the
alleged conduct of the supervisor did not amount to sexual harassment justifying
dismissal. In that case, the supervisor engaged in several different acts of
sexual harassment with different young women (summer students) in his
department. Carthy J.A. defined sexual harassment as “unwelcome conduct of a
sexual nature that detrimentally affects the work environment or leads to
adverse job-related consequences for the victims of the harassment.”[22]
Cathy J.A. found that “wearing persistence” was not a necessary constituent of
sexual harassment in the context of termination.
[23]
In other words, the supervisor did not need to persist with any one of the
complainants specifically, or engage in the conduct repeatedly. Rather, it was
sufficient that he engaged in this conduct with several different women.
Carthy J.A. also found that
the Respondent had failed in his supervisory responsibilities. The Court of
Appeal reversed the trial judge’s finding and found that the supervisor’s
actions did justify dismissal.
Bannister
should be read in conjunction with
Gonsalves v. Catholic Church Extension Society of Canada[24]
which was released at the same time.
In Gonsalves a long term employee, who held a supervisory position, was
dismissed due to allegations that he had engaged in persistent sexual harassment
of a subordinate female employee. The conduct included at least one sexual
assault. Carthy J.A. once again writing for the Court held that the supervisor
was not entitled to a warning upon the employer becoming aware of the
misconduct. On this point the Court drew a parallel between sexual assault and
employee theft: “As a generality, it seems no more appropriate to address
sexual assault by a warning than to issue a warning to an employee caught
stealing money…”[25]
this parallel was “aptly drawn in the circumstances of [this] case,
which….involved protracted harassment that crossed the line on at least one
occasion into criminal assault.”[26]
Ultimately the Court of Appeal once again reversed the decision of the trial
judge and dismissed the wrongful dismissal action.
Read together, Simpson,
Bannister and Gonsalves clearly signify a toughening stance on sexual
harassment by the Court of Appeal. With respect to sexual harassment, the Court
in recent years has imposed a strict standard of workplace conduct. While all
allegations of sexual harassment must be taken seriously, there is a continuum
and not every case will justify summary dismissal. Harassment involving
aggressive, non-consensual physical contact clearly falls at the most serious
end of the continuum. Thus, in determining whether harassment justifies
dismissal for cause, the following are considered relevant:
- Degree and nature of the
harassment;
- Whether the employee was
told the behaviour was offensive and unwelcome
- Whether the employer had a
formal harassment policy in place;
- Whether it was one of the
employee’s responsibilities to enforce the policy;
- Whether the employee was in
a position of authority;
- The nature of the
relationship between the employees;
- Whether the employee was
harassed by more than one individual;
- Whether there was an
admission of guilt.
Bullying in the Workplace
Bullying is different from
harmless incivility, rudeness, boorishness, teasing and other well known forms
of interpersonal torment. Bullying is a form of violence, but only rarely
involves fighting. It is mostly non-physical violence and crosses boundaries
of gender, race and organizational rank. Regardless of how bullying is
manifested – either verbal assaults or strategic moves to render the victim
unproductive and unsuccessful – it is culpable conduct within the control of the
culprit employee and most often deserving of some form of disciplinary action.
Over the last several years
our courts have begun to develop a legal remedy for bullied/harassed workers
under the umbrella of constructive dismissal. While historically workers were
protected from harassment that could be linked to the prohibited grounds of
discrimination under the human rights legislation there was really no remedy for
employees who were subject to general harassment. This started to change as
early decisions began to carve out protection for employees based on
constructive dismissal principles and finding that it was a fundamental implied
term of any employment relationship that employers treat employees with
civility, decency, respect and dignity.
The door was blown open so to speak with the
decision of Shah v. Xerox Canada Limited[27]
. A new branch of constructive
dismissal was established eliminating the need to prove a breach of a
fundamental term of the employment agreement, if the conduct of the employer
demonstrated it no longer intended to be bound by the employment contract.
Shah was hired by Xerox in
1983. Up until 1995, when he accepted the position of technical support
analyst, he had received good reviews and pay increases. In his new position he
reported to a different manager, Mr. Harvey. Shortly after his appointment,
Shah’s group adopted a work philosophy known as “empowerment” with a view to
encouraging entrepreneurial and independent thinking with each employee being
the “owner” of his or her own work. Shah did not adapt well to this approach.
He found it confusing and unclear as to whom he should report to.
Shah began to receive serious
critical performance reviews and a warning in March 1996. The tone of the
warning – harsh and intimidating. He requested a transfer to another
department. It was denied. After returning to work from sick leave, Shah was
assigned a large number of tasks. He reluctantly agreed to the tasks but
refused to sign a form which set out time lines for completion that he believed
unreasonable. As a result, he received another warning. Shah requested a 6
week leave of absence to deal with some personal problems. The request was
denied and he was put on probation. Shah subsequently resigned and pursued a
claim for wrongful dismissal.
The Court found that the
relationship deteriorated because of inefficient management structures. The
Court found that the supervisor was authoritarian, impatient and intolerant.
Shah’s position as a member of the group had become intolerable. In the
circumstances, the Court concluded that it was not necessary to find a
fundamental term of the employment contract had been breached in order to find
that a constructive dismissal had occurred. Rather, Cullity J. found that the
circumstances established by Xerox had repudiated the entire relationship
without cause and stated:
Where the conduct of
management personnel is calculated to cause an employee to withdraw from the
employment, it may, in my judgment amount to constructive dismissal. The test,
I believe, is objective: it is whether the conduct of the manager is such that a
reasonable person in the circumstances should not be expected to persevere in
the employment.
The decision in Shah was applied in
Saunders v. Chateau des Charmes Wines Limited
[28]
also involving circumstances of mistreatment between a supervisor and
subordinate. However, employers in meeting their obligation to create a
harassment free environment must not overlook objectionable behaviour amongst
non-supervisory employees.
In Sheppard
v. Sobeys Inc.[29],
the Newfoundland Court of Appeal made
the following statement which is often referred to in bullying cases:
As the term constructive
dismissal suggests there is no actual dismissal by the employer, however, the
employee must establish that there has been a variation of a fundamental term of
the contractual relationship between the employer and the employee of such
severity and effect which, in the absence of the agreement of the employee,
would amount to a repudiation of the contract. The employee is thereupon
entitled to treat the contract at an end. Clearly abusive treatment, which
would include harassment of an employee by co-employees and, particularly, where
these co-employees occupy senior or supervisory positions, can be construed as a
variation of a fundamental term of a contract of employment such as to
constitute a repudiation of the contract by the employer.
See also Stamos v. Annuity
Research and Marketing
Service Ltd.[30]
and Morgan v. Chukal Enterprsies Ltd.
Bullying behaviour can be
blatant or quite subtle and may include the following:
- Physically abusive or
aggressive behaviour such as pushing, hitting, finger pointing or standing close
to an employee in an aggressive manner.
- Yelling, name calling.
- Persistent, excessive,
unjustified criticism.
- Setting impossible goals and
deadlines.
- Forgetting to share credit
for collaborative work.
- Demeaning, belittling
others.
Substance Abuse
In general,
while the use of alcohol or illicit drugs on the job may be grounds for summary
dismissal, much depends upon the circumstances of each case. Where it is a
condition of employment that the employee be alcohol and drug-free while on the
job, an employee may be dismissed without notice if under the influence of drugs
or alcohol while at work.[31]
In
circumstances where the prohibition against alcohol and drug use is not a
specific term of the employment contract and where the consequences of being
intoxicated will not jeopardize public safety, fellow employees or the
employer's property, the courts have generally held that in order to constitute
just cause for summary dismissal, the intoxication must:[32]
1)
affect the employee's ability to perform the job functions;
2) be
prejudicial to the employer; and
3)
must be accompanied by a sufficient warning that use of alcohol will result in
dismissal.
Severe
substance abuse is classified as a form of substance dependence or illness. The
common law courts have long since recognized alcoholism or substance abuse as an
illness. Generally speaking, since alcoholism is an illness, the Human
Rights Code will operate to protect the individual in the workplace and, it
therefore follows, that alcoholism is not cause for dismissal unless it affects
an employee's work performance."[33]
According to the Ontario Human Rights Commission's Policy on Drug and Alcohol
Testing, the following examples represent situations in which the use of
legal or illicit drugs or alcohol may fall within the Human Rights Code's
definition of handicap:
Where
an individual's use of drugs or alcohol has reached the stage that it
constitutes severe substance abuse, addiction or dependency, e.g. maladaptive
patterns of substance use leading to significant impairment or distress
including:
- recurrent substance abuse resulting in a failure to fulfill
major obligations at work;
- recurrent substance abuse in situations which are physically
hazardous;
- continued substance abuse despite persistent social, legal or
interpersonal problems caused or aggravated by the effects of the substance.
Courts have
indicated that substance abuse is a disease for which there is no medical cure.
Viewed in that way, it is a permanent illness/disability. Therefore, the
employer will be subject to the duty to accommodate the needs of the alcohol or
drug addicted/dependent employee to the point of undue hardship. However, the
courts have recognized that substance abuse is treatable and can be controlled
even though relapses may occur.[34]
In
short, while the substance abuse is an illness falling within the four corners
of the human rights legislation, the illness will not prevent summary dismissal
where the addiction/dependency prevents the employee from properly discharging
his/her duties. This is particularly so where the employee has been offered
assistance by the employer to combat the dependency and where the employee has
been warned that future inappropriate conduct may result in dismissal.
In
practice, when dealing with an individual who is under the influence of alcohol
or intoxicating drugs, an employer should determine whether the "use" is an
isolated incident or symptomatic of an addiction/dependency. If it is
determined that the employee suffers from a dependency, it is advisable for the
employer to require the employee to undergo counseling or rehabilitation either
through an employee assistance program or some other available program. The
employee should be required to complete the treatment and should be provided
with a written warning that further incidents involving alcohol or drug abuse
will be the subject of disciplinary action up to and including discharge of
employment.
It may
be that employers who provide for employee assistance and counseling will, in
certain circumstances, have satisfied any duty to accommodate under the human
rights legislation. Careful consideration should be given to the Human
Rights Code and it is well advised to seek the assistance of legal counsel
when dealing with such employees.
When
Must you Accommodate Employee Misconduct?
The duty to
accommodate flows out of the application of human rights legislation. The
Courts have characterized such legislation as “fundamental” and having
“quasi-constitutional” status, thus the provisions of the human rights
legislation are to be construed liberally and purposively. It is clear that an
employer may not discriminate directly or indirectly against a person respecting
their continued employment based on an actual or a perceived disability. In
cases where there is a causal connection between the workplace offence and a
“disability” as defined by the Human Rights Code, an employer has a
positive duty to accommodate the individual to the point of undue hardship.[35]
Where
an employee suffering from a disability recognized by the Code commits a
workplace offence, an employer must be cognizant of a possible connection
between the workplace offence and the employee’s disability. A review of the
case law indicates that arbitrators, tribunals and tiers of fact consistently
find that where an employee’s behaviour is a manifestation of a disability,
discipline may not be appropriate.
The
first step is to assess whether a causal connection exists between the
disability and the workplace offence. Once it is established that a
relationship exists, the analysis then shifts to whether there is a reasonable
prognosis for recovery that will enable the employee to return to work and
perform his or her duties at an acceptable level. This will then engage the
“accommodation process”.
The
Discipline Process – Post Investigation Procedures
After
the investigation has been concluded and all necessary parties have been
consulted, the employer should decide upon the appropriate course of action and
put any discipline into effect. If an employee is to be disciplined, the
employer should notify him or her as soon as possible. The reasons for the
discipline should be provided to the employee.
Workplace discipline requires clarity, consistency and appropriate levels of
reaction. Discipline may be issued in the form of a verbal or written warning,
a paid or unpaid suspension, demotion or termination. After deciding that an
employee’s conduct warrants discipline, an employer must ensure that the
discipline is in reasonable proportion to the offence.
It is
important for employers to give employees warning regarding unacceptable
behaviour (unless it is the result of a single incident deserving of
termination). Not only does this allow an employer to create a paper trail, it
also gives the employee the opportunity to correct any deficiency. Warnings are
generally the least severe step. Verbal warning is generally considered the
first step in any discipline process and is meant to advise an employee that his
or her conduct is unacceptable and must be changed. Verbal warnings are seen to
address minor misconduct and disputes can arise later as to precisely what was
said. Thus it is well advised that management document the contents of the
discussion in the personnel file, carefully noting that the employee misconduct
was subject only to a verbal warning. In the event that the employee engages in
further misconduct, the verbal warning can be referred to and relied upon in
instituting subsequent discipline. In situations of a more serious nature, a
verbal warning may be inappropriate even for a first time occurrence. Thus, a
progressive discipline policy should specifically state that steps in the policy
may be skipped in the event of serious misconduct.
The
language of written warnings should be tailored to the severity of the
misconduct, with notes such as “you are advised that this is unacceptable;
further incidents will lead to additional discipline up to and including
termination”. A copy of the written warning should always be placed in the
personnel file as such letters can be used later in the event that the employee
is terminated for cause. Written warning should always refer back to previous
warnings which the employee has received, particularly if the earlier warning
was for the same or similar misconduct.
Some types of
conduct are more conducive to warnings than others. A serious act of theft or
other illegal activity may not require a warning. In disruptive behaviour
cases, particularly where the incidents complained of are trivial but annoying,
it is accepted that a warning is required prior to dismissal.[36]
The more serious the wrongdoing, the less likely an employer will be required to
give the employee a warning.
The onus is
on the employer to ensure the employee understands the criticism and the
consequences of his or her conduct.[37]
When
faced with misconduct by an employee and attempting to determine the appropriate
measure of discipline, consider the following:
- the
bona fide confusion or mistake by the employee as to whether he or she was
entitled to do the act complained of;
- the
employee’s inability, due to drunkenness or emotional problems, to appreciate
the wrongdoing of his or her act;
- the
impulsive or non-premeditated nature of the act;
- the
relatively trivial nature of the harm done;
- the
frank acknowledgement of misconduct by the employee;
- the
existence of a sympathetic personal motive for dishonesty, such as family need,
rather than hardened criminal activity;
- the
past record of the employee;
- the
employee’s prospects for likely good behaviour;
- the
economic impact of the discharge in view of the employee’s age, personal
circumstances, etc.
- similar
misconduct by other employees and discipline imposed[38]
It is
critical that employers maintain proper documentation throughout the
disciplinary process and leading up to termination. If an employer is moving
towards a termination for cause, it is absolutely necessary to ensure that all
the facts are true and accurate and documented. Records should be maintained.
The doctrine of culminating incident allows an employer to review an employee’s
previous record any time the employee’s conduct justifies the imposition of
discipline. Where the final incident of misconduct itself does not warrant the
severity of the penalty imposed, the employer may rely on the employee’s prior
disciplinary record to justify that penalty. For this reason, disciplinary
records will be important in determining the appropriate penalty. It is
recommended that personnel records be retained until at least the expiration of
2 year limitation period related to wrongful dismissal claims.
Last
Chance Agreements
Last
chance agreements are written agreements most often negotiated by employers, the
unions and affected employees to create mutually acceptable standards and
binding requirements for the continued employment of employees who would
otherwise face termination.
In the
majority of cases, last chance agreements are used by employers following the
discharge of an employee for excessive absenteeism or other problems related to
alcohol or substance abuse, although they are also negotiated in other
situations, such as where an employee has had a severe attendance or punctuality
problem that is unrelated to alcohol or drugs or has been the subject of
repeated attitude and performance issues.
In
these situations, last chance agreements can be an effective means of preserving
the employment relationship while clearly communicating to an employee the
standards which he or she must meet to retain his or her employment. As a
result, employers and unions can settle disciplinary, discharge and employment
frustration matters without having to expend the time, cost and effort involved
with litigation and, at the same time, fashion an agreement that is tailored to
their own unique circumstances and expectations.
Historically, the arbitral community held that last chance agreements are valid
and enforceable against the parties. Arbitrators have held that it is important
to labour relations that a last chance agreement be honoured and respected in
order to encourage parties to continue to try to resolve problematic situations
humanely without litigation.
The
defining feature of most recent last chance agreements is that they specifically
limit an arbitrator’s scope of review to the question of whether the terms of
the agreement have been breached. While arbitrators are generally reluctant to
interfere with the terms of a last chance agreement, the jurisprudence has
clearly established that last chance agreements are not immune from human rights
obligations.
Again, the
Human Rights Code prohibits discrimination in employment based on certain
enumerated grounds.[39]
If, for example, an employee’s misconduct is causally connected to one of the
enumerated and protected grounds, the impact of the Code must be
considered.
Last
chance agreements and the terms and conditions they impose must be reviewed in
light of the employer’s duty to accommodate. Despite the sound labour relation
policy reasons for enforcing last chance agreements, there is little doubt that
where such agreements are found to fall short of an employer’s duty to
accommodate and are thus in contravention of the Code, they will not be
enforceable.
Last
chance agreements negotiated in response to an employee alcohol or substance
abuse, or innocent absenteeism resulting from a chronic medical condition are
often prima facie discriminatory. Accordingly, the question will arise
whether the last chance agreements can meet the 3 step justification test
established by the Supreme Court of Canada in
Meiorin.[40]
The
lesson to be learned from the various cases regarding the validity and
enforceability of last chance agreements are that despite the impact of the
Human Rights Code last chance agreements may still be appropriate and
successfully implemented in a variety of situations. For example, a last chance
agreement may be useful where an employee has a severe attendance problem,
attends work under the influence of drugs or alcohol, or engages other employees
and management in verbal or physical confrontations.
The
last chance agreement may provoke the employee into recognizing the severity of
the problem and cause him or her to seek treatment. If the employee does not
successfully rehabilitate him/herself, or the problem is not conducive to
rehabilitation, a last chance agreement that is properly drafted and implemented
may evidence the employer’s attempt at accommodation and result in a discharge
that will be upheld at arbitration.
The
critical lesson is that a last chance agreement is not a substitute for
accommodation and will only be upheld if it is part of a comprehensive
accommodation program designed to assist the employee in performing the
essential duties of the job. As a result of case law interpreting the impact of
the Human Rights Code there is now more uncertainty regarding the legal
enforceability of the agreements but, they are still considered by arbitrators
to be a “valuable and important document” in furtherance of good labour
relations.
Termination for Cause
Traditionally
factors such as the type of employee misconduct[41],
the length of the employee’s service[42]
and the character of employment[43]
have been considered by the courts in determining whether an employee was
properly dismissed for cause. In
McKinley v. B.C. Tel[44]the
Supreme Court of Canada clarified the law of summary dismissal and found that
issues of employee misconduct must be considered in the context of the employee
relationship. According to Justice Iacobucci, each case is to be examined on its
own particular facts and circumstances and should consider the nature and
seriousness of the misconduct in order to assess whether it is reconcilable with
sustaining the employment relationship.[45]
According to
the Supreme Court of Canada in McKinley, the relevant test to determine
just cause is whether the employee misconduct has given rise to a breakdown in
the employment relationship.[46]
In considering whether a breakdown has occurred, the courts are to consider
whether the employee’s conduct has been established on a balance of
probabilities and if so, whether the nature and degree of the misconduct
warrants dismissal.[47]
The Court therefore has adopted a “contextual approach to establishing cause
which requires an examination of all of the relevant factual circumstances.
The
onus is on the employer to establish a cause for dismissal on a balance of
probabilities. This means that it is more likely than not that the employee
misconduct did occur. Generally speaking, the more serious the allegations, the
more careful the court will be in looking at the employer’s evidence.
The
likelihood that a court will reject an employer’s cause argument is increased
where the employer:
-
fails to both warn the employee that his or her job is in jeopardy and does not
give him or her a reasonable opportunity to correct deficiencies before
dismissal;
-
condones part improper practices or fails to apply its policies and procedures;
-
fails to interview all relevant witnesses, regardless of whether they have
evidence which is favourable or unfavourable to the employer’s allegations of
cause;
-
fails to allow the employee to respond to all the allegations of misconduct;
-
delays in the internal investigation into the conduct;
-
fails to advise the employee of relevant policies and procedures, if the breach
of those policies and procedures relating to investigations and terminations;
and
-
relies upon inconclusive circumstantial evidence.
Manner
of Termination
Historically, an employer was liable for damages only where the termination was
itself unlawful, or where the manner of termination disclosed a separate cause
of action, such as defamation. However,
Wallace
v. United Grain Growers Ltd.[48]
,
a decision of the Supreme
Court of Canada held that an employee may recover damages even where the
dismissal was for cause and the manner of dismissal did not constitute a
separate cause of action. The Court imposed a duty of good faith and fair
dealing upon employers when terminating the employment relationship. Employers
have an obligation to be “candid, reasonable, honest and forthright with their
employees at dismissal”. Where an employer breaches this implied duty of
good faith in the manner of termination, the employee may be compensated by an
increased notice period.
The
decision is intended to compensate victims of bad faith conduct marked by
callous and insensitive treatment on the part of employers in the manner they
dismiss their employees. The Supreme Court of Canada attempted to draft the
decision clearly so as to prevent a flood of claims for bad faith damages. In
attempting to do so the Court provided a non-exhaustive list of the types of
conduct that may constitute bad faith, as follows:
-
permitting an employee to learn of the termination through an advertisement for
his/her replacement;
-
firing the worker on the day he or she returns from a disability leave;
-
wrongful accusations of theft and then publishing the allegation;
-
refusing to provide a letter of reference;
-
giving a false explanation for the termination;
-
making negative public statements;
-
harassing the employee while on sick leave.
Terminations – Practically Speaking
1.
Ensure that two representatives of the
employer are present during the termination meeting.
2.
The interview should be conducted by the
employee’s immediate manager who is likely to have a good rapport with the
employee. If there are likely to be communication issues between the direct
manager and the employee, the human resources representative should conduct the
interview.
3.
Conduct the interview in an honest,
reasonable forthright manner.
4.
The meeting should be conducted in a
private location where interruptions can be avoided. Every effort should be
made to shield the employee from the embarrassment of being terminated in the
presence of co-workers or in public areas.
5.
Terminations should be conducted at a time
that would enable the employee to avoid any possible embarrassment derived from
encountering his or her co-workers when leaving the premises. It should be
conducted early in the week in order to provide the employee with the
opportunity to seek independent legal advice.
6.
The law requires the notice to be specific,
unequivocal and clearly communicated to the employee.
7.
The purpose of the meeting should be
clearly established at its outset.
8.
Provide the employee with an opportunity to
respond but do not debate the issue.
9.
Individuals conducting the meeting should
not become defensive. Their role is to communicate the termination clearly not
defend it.
10.
In the context of a termination for cause,
a letter that sets out the reasons for the dismissal may influence the
impression of the employee’s lawyer and could ultimately avoid costly
litigation. Grounds for the dismissal should be set out clearly in the letter.
11.
Conclude the meeting by making arrangements
for the employee to remove their personal belongings from the premises and
return all company property. Offer to provide the employee with a method of
transportation home.
Final Note – The Honda Case: Consider it a Warning
On March 17, 2005, the Ontario Superior Court of Justice released
a decision that contains one of the highest awards for damages in an employment
law case that Canada has ever seen.
In the controversial decision of
Keays v.
Honda Canada Inc.[49],
Mr. Justice McIsaac granted a total of 24 months’ salary in lieu of notice and
an additional $500,000 in punitive damages to a 14-year employee of Honda Canada
Inc., who he found had been wrongfully terminated for insubordination. Given the
unprecedented nature of this award, most lawyers expect the decision to be
appealed. If upheld, this decision could break new legal ground for the quantum
of damages awarded in employment law cases. Because the punitive damages were
awarded for a breach of the duty to accommodate under the Ontario Human
Rights Code, future complainants may seek a civil remedy rather than file a
complaint under the Code.
The Facts
Kevin Keays worked as an associate in the Quality Engineering
Department at the Honda plant in Alliston, Ontario. Keays was responsible for
instructing his colleagues on the performance and operation of the new Honda
global computer system. After an eight year exemplary employment record, Keays
began experiencing health problems, which his physician diagnosed as Chronic
Fatigue Syndrome (“CFS”). As a result of this condition, Keays was frequently
absent from work. This impacted on his ability to provide sufficient attendance
to satisfy the requirements of Honda’s “lean” operations. His health
deteriorated to the extent that Keays was absent on short-term and long-term
disability for a period of two years. He returned to work following the
termination of his insurance benefits.
Upon his return to work, Keays continued to miss work on a
regular basis. As a result, he was “coached” by way of a written report, which
was the first step in Honda’s attendance management program. When Keays
complained that his illness prevented him from meeting Honda’s attendance
expectations, he was informed of a program that exempted employees from
attendance-related discipline if they had a disability recognized under the
Code. The accommodation program also required Keays to validate each of his
absences with a note from his physician. In the meantime, Keays retained legal
counsel and his absences continued to increase in number.
The nature and severity of Keays’ CFS disorder was also
controversial. An internal physician at Honda expressed concerns about the
treatment Keays’ personal doctor had recommended. He also expressed the view
that Keays should be on a graduated return-to-work program. Consequently, Honda
engaged the services of a medical specialist, who was asked to review Keays’
medical file and consider whether his absences were justified. In order to
obtain a better understanding of his medical condition, the specialist requested
that Keays attend at his office for an assessment. By letter from his legal
counsel, Keays declined to attend this meeting “pending clarification of the
purpose, methodology and the parameters of the assessment.” As Honda did not
believe such an explanation was necessary, it made another request for Keays to
attend at the physician’s office. When Keays refused again, he was formally
terminated for insubordination. Keays responded with a lawsuit against Honda,
claiming wrongful dismissal.
The Decision
Throughout the decision, the Court expressed its astonishment at
Honda’s “callous and insensitive treatment” of Keays, given his vulnerable state
of health and his conscientious attitude towards work. In holding that Keays had
been wrongfully dismissed, the Court found that Honda had been unreasonable in
refusing to give Keays an explanation for the purpose of the proposed meeting
and that Keays therefore had a legitimate excuse for not attending the meeting.
The Court also held that Honda’s decision to terminate Keays was completely
disproportionate to his alleged insubordination. Accordingly, the Court
concluded that Keays had been justified in refusing to follow his employer’s
directions.
The Damage Award
On the basis of Keays’ age, length of employment, character of
employment and the availability of similar employment, the Superior Court ruled
that he was entitled to 15 months’ pay in lieu of notice. The Court also
stressed Honda’s flat and egalitarian management structure as a reason for a
longer notice period, despite Keays’ relatively low-level position.
The Court also awarded an additional nine months’ pay for “bad
faith” damages, relying on the Supreme | 
