ELISA SCALI: OK, I think we're going to get underway now. And before we begin our program today, I'd like to acknowledge that because we are all based in different cities and provinces across Canada, we are located in different traditional Indigenous territories, some of which are covered by treaties. I encourage us all to take a moment to reflect upon and acknowledge the land upon which we are living. If there are Indigenous people attending this webinar, please feel welcome to share your home community in the Q&A so that we may also recognize you.
Good morning, everyone. My name is Elisa Scali. I'm a partner with Gowling WLG practicing in the Employment, Labour, and Equalities Group, ELE for short. And I'd like to welcome you here today to our third webinar of our 2023 webinar series on--
During today's webinar, we will be discussing terminations for cause. And to guide us through that discussion today, we have with us my colleagues from the Ottawa office, John Peters, Craig Stehr, and Courtney March. John, Craig, and Courtney are all members of our ELE Group practicing exclusively in the area of employment law.
Now, for those of you who have joined our webinars previously, you may know that I like to share a little fun fact about our speakers. And from time to time, I ask them a question to try to prompt their response. In the past, I've asked, if you didn't pursue a career in law, what other career would you have liked to pursue?
John's been a presenter before, and I've asked this question. But I think I've asked it in a different way. I asked, what would you do? And he answered, I would be Santa Claus because of the free cookies. So now that I've reframed the question, I got a different response. And he tells me that he'd be a veterinarian for the free dog cookies.
Courtney said that she would like to be a food critic, so I've now made a note to myself never to cook for Courtney. I would not want my food to be critiqued by her. And Craig says he'd like to be a forest ranger because he would like to enjoy having an outdoor office among the majestic Canadian wilderness working amongst the bears and not the barristers.
So before we begin our program today, I have a few housekeeping items. The PowerPoint you will be seeing today will be sent to you following the webinar. The webinar is also being recorded, so you will be able to access the recorded session following the webinar. The link will be sent to you.
If you are interested in viewing our previous webinars, you may go to a link. We'll include it in the Q&A or the chat. And that will take you to our previously recorded webinars. The webinars from 2023 but also from 2022 will be available on our web page.
Finally, if you have questions throughout the presentation, you can access the Q&A. Add your questions to the Q&A. We will try to answer the questions during the presentation today. But if we do not have the time to get through all the questions, we will provide the answers following the webinar. We will send those to you by email following the presentation today.
One last item. The presentation today is not intended to be legal advice. This is a really high-level overview. It's impossible to cover all relevant details. So for advice, we do advise you to consult your qualified legal counsel before making any decisions or taking any action. So like to get started, and I would like to turn it over to Courtney.
COURTNEY MARCH: Thanks very much, Elisa. So in Canada, terminating an employee's employment for just cause is an extremely difficult mountain to climb. Many attempt to reach for the top, but only a few ever get to the summit. Most judges require the employee to have engaged in the most egregious behavior or conduct. The threshold is so high it is rarely reached, and there are no points awarded for getting halfway.
The Supreme Court of Canada case of McKinley and BC Tel remains the leading authority on the law of termination for cause. In this case, the court addressed the question of whether an employee's one act of dishonesty could be relied upon as grounds for termination for cause. Fundamentally, the test is whether the employee's actions give rise to a breakdown in the employment relationship.
And this test can be expressed in different ways. For example, just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligations to their employer.
Now, in McKinley, the court found that an employee's actions or misconduct cannot be assessed in isolation but instead must be assessed with the application of a contextual approach. Underlining this contextual approach is the principle of proportionality such that a balance must be struck between the severity of the misconduct and the sanction imposed.
So at common law, for an employer to prove that its employee engaged in conduct that is incompatible or inconsistent with the fundamental term of the employment relationship, it must carefully examine, first, the nature and extent of the misconduct; second, the surrounding circumstances, or in other words, the particular circumstances of both the employee and the employer; and third, whether dismissal is a proportional response. And I'm going to turn it over to Craig to bring us through the types of just cause.
CRAIG STEHR: Thanks, Courtney. Looking at the various types of just cause, what we're looking at genuinely, as Courtney has mentioned, is whether there's been a fundamental breakdown in the relationship. And so if we take a look at the next slide, we'll have a few that we just want to highlight. And there's any number of specific circumstances, I would say, in terms of where we might find just cause appearing.
But the two main categories that we deal with on a regular basis are performance-based and misconduct-based just cause. And when we're looking at performance-based to start, the first area that we see it arise is when we're dealing with incompetence.
Now, I want to be clear when we're looking at performance-based just cause, this is a very difficult type of just cause to summit. It is certainly more challenging. It exists still, certainly, but it is certainly the more challenging of the two categories to succeed on. But if it's there, and the proper preconditions have been laid by the employer before asserting it, then certainly it's something that is available.
And so when we're looking at performance-based just cause, one of the main things we're looking at is incompetence-- so when an employee is just so incompetent it strikes at the core of the employment relationship. But when we're looking at incompetence-based just cause, we're not just looking at simple incompetence. We're looking at gross incompetence.
An incompetent employee will not provide you with just cause for termination. The employee must be grossly incompetent. And what that looks like will be different from situation to situation, from workplace to workplace, from position to position. There's no one-size-fits-all assessment.
If you're looking at an environment with a high regulatory framework and public safety implications as a result of an incompetent action, well, it might be-- and I hesitate to use the word easier, but it might be somewhat easier to get there than if that's not at issue. So, again, we're looking at the whole context, like Courtney had mentioned.
But before we can even assert just cause in those circumstances, the employee will need to have been informed of their deficiencies and been provided with plenty of opportunity to rectify the poor performance. And so, certainly, what a court will expect at a minimum is that the employee has been informed of the performance standard, how they are failing to meet that, what needs to be done in order to get that employee-- for them to get up to the expected standard.
Support needs to be provided by the employer to the employee to help them meet that standard. And they need to be provided with enough of an opportunity, a sufficient opportunity, to improve and to reach that performance standard that has been communicated to them. Also critically important, even if an employer has gotten through all of those steps-- and when I say gotten through all those steps, we're talking repeatedly. There has to be-- it's a process.
And it's a lengthy process where the employee is given a series of opportunities to improve over what I would say is a relatively lengthy period of time. Even if all of those steps have been satisfied, unless the employee has also been informed throughout that failure to meet the performance expectations could result in discipline up to and including just cause, just cause will not be available.
So as you can see, it's a lengthy process. It's an involved process. And even once those steps have been taken repeatedly, I would suggest in most cases a court is going to be extremely, extremely hesitant to agree that there has been just cause unless we're really, truly looking at a grossly incompetent employee who just doesn't get it and who will never get it. But even then, I would say it's the riskiest of just cause scenarios.
Neglect of duty is another performance-based category of just cause where an employee is just so neglectful-- I would say grossly neglectful-- in their duties as well and is just refusing-- really, we're looking at, I would say, some degree of intentionality there-- refusing to engage their duties. Then there may also be just cause available.
When we're looking at misconduct, we can see we've listed a few items there. It's not an exhaustive list, of course. There's any number of flavors to this one as well.
Dishonesty is a main category here. Any dishonesty, of course, an employer can't tolerate. If an employee can't be trustworthy, it really would strike at the core of the employment relationship as well and may form the basis of just cause.
Gross insubordination as well. If an employee is just refusing to follow proper and lawful direction by their manager, by the company, that as well may form the basis of just cause. But, again, there we're looking at gross insubordination, not just simple insubordination.
Where that line is, I'm not sure there's a science to it, or we can provide any real clear guidance on that. But, certainly, at a certain point, insubordinate behavior becomes so problematic that it certainly wouldn't be expected that an employer would tolerate it. Certainly, repeated instances of insubordination helps build that case.
And, again, theft or fraud, the integrity-type offenses. Theft or fraud, I suppose, when we're looking at the extent of it, I mean, I would suggest there may have been a time when any theft or degree of fraud would be more clearly in the realm of just cause. Certainly, anything dealing with a financial loss to an employee's employer.
But I don't believe now, given some recent decisions, that that's necessarily the case. If an employee were to steal a drink out of the concession stand at work, would that amount to just cause? Maybe. Probably not. Possibly not. I'm not sure. It'd probably depend on the larger contextual environment assessment as well.
And then, of course, harassment and violence. And this one certainly has, I think, received more attention more recently over recent years. But there are some decisions that, again, I see. And I think the behavior certainly following the MeToo movement should form just cause, where I've been a little bit surprised that a court has not sustained the just cause allegation.
So if we take a look at the next-- we're going to move on to some cautions and things. If you're going to assert it, there are some things you need to keep in mind.
Act promptly. So this is one area, certainly, where you need to be mindful of taking swift action. If you sit on your right to assert just cause, you may lose the ability to rely upon it.
And the reasoning being is just cause fundamentally is an assertion that the employee's conduct has so struck at the core of the employment relationship that it is just untenable and unsustainable moving forward. You can see how that becomes undermined if you wait for three weeks, four weeks, eight weeks before asserting that the behavior was so egregious that the employment relationship was fundamentally affected.
You also run the risk of meeting up with a acquiescence or a condonation argument in defense from the employee subsequently because, again, if you haven't taken action within a period of weeks, well, it suggests that perhaps the employer has accepted or tolerated that behavior. So that's one risk as well.
So if you do not take swift action-- I would suggest it doesn't, in every case, have to be immediate. Certainly, if we're looking at the harassment or type scenarios where an investigation has to be conducted in order to ascertain what precisely happened, of course then there's going to be some timeline delay. But this is one thing that you do need to keep in mind is that if you have just cause, you need to assert it promptly. Otherwise, you risk losing the ability to do so.
And the next topic we're going to look at is after-acquired cause. This is another one that you need to be mindful to watch your timing on because sometimes-- and it happens. It's not a common situation. But sometimes an employee will be terminated without cause, and then new facts come to light.
Maybe something has been reported by a colleague now that that employee has departed the organization. Perhaps you're cleaning out the employee's desk, and you find a baggie of something. These are all circumstances that can happen. And so after-acquired cause is where, subsequent to a termination without cause, new misconduct has been discovered that truly was unknown at the time of the termination.
And if it's something that you ought to have known was occurring, you will not be able to rely on it probably as after-acquired cause. This has to be a misconduct that wasn't in the employer's knowledge at the time of the original termination but if the employer had been aware of it at the time, would have been relied upon as just cause at the time of termination. So the timing-- and it's a bit more of a dance at the end of this.
And, certainly, if you've already settled with a departing employee, you likely are out of luck in terms of asserting after-acquired cause. But this is another item in the tool kit, so to speak, that is available if new facts come to light after a termination. So I'll pass it over to John.
JOHN PETERS: Thanks, Craig. So as Craig went through the types of cause or just cause, what we have to talk about in Ontario are actually two levels of cause. There is common law cause, which is a very hard standard. To use the mountain analogy, common law cause would be like trying to climb K2 or Kilimanjaro.
There's also a second level of just cause in Ontario, which is just cause under the Employment Standards Act. Or, actually, it's not necessarily called just cause under the Employment Standards Act. But, effectively, to deprive someone of their ESA entitlements on the Employment Standards Act, you have to reach a different level. So what I like to call-- there's just cause under common law, and then there's just cause under the Employment Standards Act or what I call super cause.
If you would imagine, under the ESA, to deprive someone of their ESA entitlements to notice or pay or continue benefits or, in certain circumstances, severance pay under the ESA, you have to hit a different level. You have to hit the super cause level. The ESA requires the employer to establish that the employee has been guilty of-- and guilty is sort of key here-- willful misconduct, disobedience, or willful neglect of duty.
All that cannot be trivial and cannot have been condoned by the employer, as Craig alluded to. If the behavior is known to the employer, and the employer either by inaction does nothing or does very little, that behavior may be considered condoned or acquiesced by the employer.
Now let's talk about, what does willful misconduct, disobedience, and willful neglect actually mean? I'm going to go to the next slide. So here it's an assessment of subjective intent. So it's almost like and it's very akin to the examination of subjective intent in a criminal setting. So there must be an evil intent to act improperly or to act neglect-- must be to be neglectful in your duties or to be disobedient.
Misconduct that is careless, thoughtless, heedless, or inadvertent, no matter how serious, will not meet that standard. So, effectively, the case law has again and again established that to deprive someone of their statutory entitlements, the behavior of the employee must be egregious. They must show that there was an intentional or deliberate action by the employer.
And, again, it can't just be, yes, the person intended to do that. And we're going to give you examples of what might be considered an intentional act, what will be considered an intentional act but still not reach the level of just cause under the ESA or what I call a super cause or getting to the top of Mount Everest.
The courts are requiring the employee to purposely have engaged in conduct that they knew to be serious misconduct. Or to put it in a different way, they must be bad on purpose. It must be premeditated or preplanned.
So what are the repercussions of alleging cause, whether it's common law or under the ESA? And, again, the ESA is almost impossible to meet. It's not impossible, but it's almost impossible to meet. Next slide.
So if an employer alleges just cause and does not establish it, there can be further damages payable to the employee, including increased notice or punitive or aggravated damages. That means if you're going to allege cause, you must be very, very careful. Two levels. One, are you going to allege just cause under common law and, as a result, provide the employee, upon termination, with their applicable statutory entitlements, which, again, is notice or pay in lieu of notice, continued benefits, and in certain circumstances, severance pay under the ESA in Ontario?
Or are you going to allege super cause and deprive them of everything? And that, again, is an almost impossible summit to mount. I know that this week there was a celebration, I think the 70th celebration, of the first climber to mount Mount Everest seven years ago. Few have done it successfully.
And when you're trying to summit the mountain, you don't get points for trying. There's no such thing as near cause, and that's not going to help you out. Courts are very protective of employees.
To use another analogy, if you're at a carnival game, and you're swinging the hammer, and you're trying to ring the bell, if you swing that hammer, the alleged cause, you'd better ring the bell because to allege cause and not have it has proven time and time again problematic for employers because courts are very, very employee-centric. And you will pay the price if you have not been able to reach the summit or ring the bell when you swing the hammer. And then I will pass it over. Let's go over to the five situations.
COURTNEY MARCH: Thanks, John. We're going to see how these can shake out in your everyday workplace. So we'll start with Not So Smart. Mia was an assistant manager at S-Mart for 10 years. For the first 9 years, Mia worked well with their supervisor, Evan. However, the working relationship turned sour after Mia refused to falsify an inventory count at Evan's request.
As a result, Evan became abusive towards Mia. For a period of six months, Evan relentlessly belittled, humiliated, and demeaned Mia, often in front of coworkers and sometimes in front of customers. During this period, Mia, with the encouragement of human resources, attempted on many occasions to speak directly to Evan to get him to stop bullying them without success.
Mia finally went to a senior manager to complain about Evan's conduct. Mia did not wish to file a formal complaint against Evan, as Mia was concerned about how Evan would react. Nevertheless, Mia wanted S-Mart to talk to Evan to stop his aggressive behavior towards them.
S-Mart committed to look into the matter. But a month later, S-Mart told Mia that because they did not file a formal complaint, there was nothing S-Mart could do. A few days later, after Evan demeaned Mia, this time in front of the senior manager, S-Mart summarily dismissed Evan with cause and without any notice or pay.
OK, John, let's get right to it. Did S-Mart have grounds for dismissal with cause?
JOHN PETERS: So my favorite answer for any legal question is maybe. I think Evan absolutely engaged in a course of vexatious comment or conduct against Mia, a person in the workplace, that is known or ought to be reasonably known to be unwelcome, which would meet the very strict standard of harassment and bullying under the definition of harassment under the Occupational Health and Safety Act in Ontario.
COURTNEY MARCH: OK, but S-Mart terminated the employee without notice or pay, meaning they needed to establish ESA or super cause. So, in other words, did they reach that threshold or summit?
JOHN PETERS: I think they certainly had every opportunity to establish common law cause and perhaps even super cause, but they squandered their opportunities on a number of occasions.
COURTNEY MARCH: How so?
JOHN PETERS: Well, first and foremost, HR was aware, it appears, early on that Evan's conduct was inappropriate. They did coach Mia to try and talk to Evan directly, which is very difficult, especially with a power dynamic. But they really didn't get involved. So this is where they originally dropped the ball, and they could be seen as almost condoning the conduct.
COURTNEY MARCH: So what should S-Mart have done to stop this evil Evan? Should they have used garlic, exposure to sunlight, or should they have played nonstop "Baby Shark" on a constant loop?
JOHN PETERS: I think all of those are great options. But when the employer first became aware of the abuse, the harassment, and the bullying, they should have hired an independent investigator.
COURTNEY MARCH: Could they not have investigated this on their own?
JOHN PETERS: They could. And in certain circumstances, it's appropriate for HR or someone trained in investigation, depending on the nature of the misconduct. But given the power dynamic between Mia and Evan, and given the seriousness of the behavior, I think it's crucial that you hire an independent investigator to make a finding of fact as to what actually happened here.
COURTNEY MARCH: So you previously mentioned that S-Mart had a number of opportunities. When else could they have acted?
JOHN PETERS: So Mia finally went to a senior manager and, again, was hesitant to file a formal complaint but did say, could you do something about this? I've tried. I've followed HR's direction. I tried to deal with Evan directly with no success. Could you do something here?
S-Mart did say, we'll look into it. But then they came back, and they told Mia that because she didn't file a formal complaint, that there's nothing they can do. And that is not correct. The employer has a duty under the Occupational Health and Safety Act to investigate every incident or complaint that is reasonable in the circumstances.
And that means if you're aware-- and they definitely are aware of Evan's constant abuse or harassment of Mia-- that they had a duty even if Mia, who, rightly so, may be concerned about being a complainant in this investigation-- the employer could have still investigated the complaint under the Occupational Health and Safety Act. And, actually, they had a duty to do so, and they just blew it.
COURTNEY MARCH: But, surely, John, evil Evan should be terminated for cause when the senior manager witnessed the subsequent event of demeaning Mia. Is that not, at the very least, common law cause?
JOHN PETERS: I think it could have been. Again, maybe. I think it could have been common law cause and perhaps even super cause had the employer acted promptly from the outset. But S-Mart seemed to stumble at each opportunity over a number of months when they knew that the behavior was ongoing.
And let's look at the context there. No one ever approached evil Evan to admonish him for the previous behavior, making it clear that the behavior would not be tolerated. There was no discipline. And, in fact, the only time they ever addressed Evan about his conduct-- and he should have known, obviously, that the behavior was inappropriate-- but it was still allowed to continue. And the only time they actually talked to him about it was on the day that they dismissed him.
Certainly, one incident that senior manager observed Evan demean Mia, one incident wouldn't constitute cause. And even with the evidence of the previous incidents, they were aware the entire time that this activity was happening for over six months. If that was considered condoning the behavior, that would be highly problematic in this case, even with how evil Evan was, to dismiss him for cause, in my opinion.
COURTNEY MARCH: So, John, S-Mart was not so smart.
JOHN PETERS: No, Courtney, they were not smart.
COURTNEY MARCH: All right. We're going to shift over to Progressively Worse. Charlie was hired as a lead engineer with Acme Engineering, a small engineering company, 12 months ago. Early on, the president of Acme, Aubrey, identified significant performance issues. The issues concerning Charlie's behavior towards and communications with staff, salespeople, and clients were ongoing.
The behavior included frequent outbursts, foul language, dismissive remarks, and refusing to complete tasks that he deemed unnecessary. Aubrey attempted to informally coach Charlie early on, but the behaviors continued. Charlie's emails to colleagues became increasingly condescending, disrespectful, arrogant, and haughty, and he started to bemoan that the company was dysfunctional. Charlie failed to meet deadlines, complete tasks, and neglected to reach agreements with clients, causing a significant decline in business.
Frequently, when Aubrey directed Charlie to conclude a client agreement or submit funding applications, Charlie failed to act and was dismissive. Aubrey gave Charlie a verbal warning two weeks ago, but Charlie refused to take any responsibility for his behavior or apologize to his colleagues. A significant business opportunity was lost this week due to Charlie's inactions. Aubrey terminated Charlie's employment for cause today. So, Craig, was there cause?
CRAIG STEHR: Yeah, this is one where I would say I think we've crossed the line into just cause territory. And this scenario is based on a relatively recent decision in Ontario here, and the court agreed with that. So, yeah, this one I would say we're in the just cause zone.
COURTNEY MARCH: Now, Charlie was relatively short service. Would it have made a difference if he had longer service?
CRAIG STEHR: Yeah, so looking at the facts here, what jumps out are-- I think clearly we're looking at insubordination. This goes beyond just simple performance issues. We're dealing with insubordinate behavior. And I think it calls out potentially for at least the consideration of progressive discipline.
Here the runway because the employee, Charlie, was so short service, within about a year, there really wasn't much of an opportunity. The facts of the case aren't very clear in terms of what exactly that informal coaching looked like. But it seemed pretty light.
So on the one side, I would look at it as, well, maybe if there had been more-- well, maybe more should have been done on that front. And if you're looking at trying to build the case even with a short-term employee-- well, not build the case. If you're trying to deal with the situation with a short-term employee even, I would suggest probably even more clearly you want to be giving oral warnings and then written warnings to the extent that it makes sense.
I mean, here he's costing the business money, and so maybe there wasn't that opportunity. I see that. If he had been a longer-service employee on the other side, though, if we're looking at a 15-year employee with a fairly unblemished record who wasn't really all that problematic or at all problematic for the entirety of his career with the business, it raises some other questions as to, is there something going on that might have caused this change?
I think looking back at the McKinley contextual analysis, I know the court would certainly be zoning and narrowing in on the fact that this is an employee with a otherwise unblemished record until recently. I think that that fact would make it much more difficult to rely upon just cause if Charlie had been there for a substantial period longer.
COURTNEY MARCH: Now, would the level of Charlie's role have an impact?
CRAIG STEHR: I think potentially. I think it goes into the contextual analysis as well. If he had less authority, perhaps the implications of his insubordination may have been less. But at the end of the day, we're still looking at insubordination. So I think it's one of the factors that I think a court would be interested in. I don't think it's one that would necessarily carry the day.
If he was-- here he's a lead engineer, so he's already pretty senior. If he were a CFO, would that make a difference if he's expected to exercise more discretion? I don't think so. And in fact, in this case, I did tweak it a little bit in the scenario. The real individual was actually a CFO, and still the court was not amused and found that he was being insubordinate.
COURTNEY MARCH: So where is the line where insubordination becomes so serious that it amounts to just cause?
CRAIG STEHR: Yeah, that's interesting. There isn't a bright line that we can look to. In terms of insubordination, like we referred to earlier, just simple insubordination, one instance of insubordination, I wouldn't say it never will rise to just cause. But it's going to be a more difficult case, certainly.
You can see a situation where Charlie maybe, on one of these days, is getting frustrated with a coworker and has an outburst. That, in all likelihood, wouldn't amount to just cause unless it was an extreme blowup, in which, in that case, perhaps could. But I think here when we're looking at an insubordination case, I think we need a history of insubordination of some sort and that at a certain point, we're looking at it and asking, OK, by now, has it crossed that line?
And I think-- and I've heard judges ask this question in similar cases. But does the employee get it? Will they ever get it? Is there any hope of reform? And I think that when the answer to those questions is a demonstrated no, I think at that point that's what you're looking at in the assessment in terms of whether or not the line has been crossed.
COURTNEY MARCH: So what was management's obligation to engage in progressive discipline before the termination?
CRAIG STEHR: Yeah, I think the answer to that is really you have to assess how to best respond to the instances of insubordination. And I would suggest in a normal case-- and, again, we don't have much detail in terms of what this informal coaching by Aubrey looked like. But I think you want to be clear and start with an oral cautioning and warning setting out the standards and expectations of the behavior within the workplace.
Make sure that that is understood and that the behavior that Charlie was engaging in early on was not tolerated, will never be tolerated. And then from there, I think you want to step it up a bit more and issue, I wouldn't say necessarily another oral warning but perhaps something in writing at least. But, again, if Charlie's outbursts are so serious or persistent, I wouldn't say that you have any obligation necessarily to start at an oral warning either.
It's helpful if you have that build-up because then you can demonstrate-- and the discipline because you can demonstrate to the court, we tried. We tried everything to get this guy in line, but he just doesn't get it. And his behavior continued. And it was clear, because we made these multiple attempts to address the behavior, it's clear that he's being grossly insubordinate and won't be changing.
Because I think a court is going to be interested in, again, looking at that contextual approach, what has the employer done to address this? What is the environment within the workplace? But, again, if Charlie's outbursts are pretty severe by email or in person when he's dealing with folks, or he's repeatedly refusing to close off on contracts with clients, and it's costing the business money, well, I wouldn't say that the court's going to expect that you continue to sustain that pain just for the sake of progressive discipline.
COURTNEY MARCH: So we saw that a significant business opportunity was lost this week due to Charlie's inactions. So to what extent does this business impact of Charlie's insubordination matter?
CRAIG STEHR: I think it's an important factor that there's, I think, two consequences to Charlie's insubordination. We have the impact on colleagues and staff in terms of essentially being harassed within the workplace.
But being on the more insubordinate side, where Charlie's just refusing to perform the expected tasks, I think a court will ask, so what? What's the consequence of that? And if, in your case, you can point to a direct line between the insubordination and a real concrete cost to the business, I think that's going to help the cause case.
COURTNEY MARCH: Would it change the outcome if Charlie apologized?
CRAIG STEHR: In this case, I don't think so. I think-- and I should say, this is one-- when you add it all together, I can see just cause. It's not one that I would have been surprised if the court had sided with the employee, with the plaintiff, except that I think, in this case, Charlie was just so detestable and unsympathetic that the court had no motivation to try to help this individual here.
Part of that is, well, he's clearly not acknowledging-- and the court says this-- is not acknowledging, has not acknowledged any misbehavior or responsibility here. I think that's important. If Charlie had apologized early on and had made some attempt at addressing his behavior, even if coming up short a few times or subsequently, that may have changed the outcome.
If it came near the end, sort of an 11th hour apology or recognition of wrongdoing, courts can be sympathetic to that. So that's something that you need to keep in mind too. But it has to be a meaningful acknowledgment, I would say. Just a hollow acknowledgment too for if Charlie was just trying to save his job at the end, realizing the writing was on the wall-- although I don't think Charlie had that level of self-awareness necessarily-- but looking at that, it can have an impact even, I think, in insubordination cases.
COURTNEY MARCH: Thanks, Craig. All right, John, we're coming back to you with Missing the Marc.
ELISA SCALI: Sorry, before we move on-- I hate to interrupt-- there is a question related to that fact pattern. I thought maybe we could answer it before we move on. One question was, might Charlie have a disability or illness? Is there anything in this fact scenario that would have caused the employer perhaps to question whether the performance issues or the insubordination was somehow related to a disability? And if so, what would the employer be able to do in that context?
CRAIG STEHR: Yeah, that's a great question. Looking at the facts that we have here, given that the relationship was so short, it's going to be more difficult for the employer in this case to really assess that.
If there was anything that jumped out, raised the issue of a disability potentially or a circumstance-- because as everybody probably knows, Charlie would not just-- the human rights obligation wouldn't be triggered by Charlie having to disclose the fact of a disability. But if the employer ought to have known or ought to have inquired about Charlie's circumstances, then there's going to be human rights obligations there as well.
In this fact scenario, at least what we have from what it was based on in the decision, there wasn't any behavior or any commentary from the court that suggested there should have been a further inquiry. I would say-- and this is always my approach-- that if you have a longer-service employee, so if Charlie had been there for 15 years, and everything was fine, and then all of a sudden, 12 months ago, he becomes a monster, it begs the question, is something else going on in Charlie's life?
And sometimes it's a divorce. Sometimes it's a loss of a parent. Sometimes it's one of these big life events that an employee has a difficult time coping with. And so I always recommend in that situation, if you've seen a real change in behavior, to sit the employee, Charlie here, down and ask, look, we've noticed this change. Is there anything going on that you would like to share with us, that you would like to disclose so we can provide you with support on? And then it gives you the opportunity to try to fix it.
Because if Charlie was a 15-year stellar employee, and then all of a sudden, you've got these problems, well, it's, I think, in the organization's best interest to try to resolve these issues so that Charlie can continue to perform. And that applies, I think, for the disability issue because sometimes there can be a mental health issue that arises in the midst of an employee's employment or that perhaps is transitory and isn't apparent all the time. There's an obligation in that case certainly to assist.
Now, if you suspect that there's a disability-- and again, it has to be-- the conversation has to be a sensitive one. But, certainly, I think there's the opportunity, with some proper guidance, to-- again, similar conversation with the employee-- approach them and say, look, we've noticed this change. Is there anything that you'd like to disclose to us? And you might even want to ask, any disability issues or anything of that sort that we can assist you with?
And sometimes, again, you may want to even specifically call out because, look, if this isn't something we can assist you with, we're going to have to deal with it as a performance management or insubordination issue. But, again, you want to be very careful in how you approach that conversation. Get some advice before you do. But, yeah, certainly, if you've noticed a change or anything else that raises the question in terms of mental health issues or other human rights issues, certainly, you would have the obligation to pursue that before moving down the road of just cause.
ELISA SCALI: Thanks, Craig.
COURTNEY MARCH: All right, moving on to Missing the Marc. And please keep those questions coming. Frank was hired by Big Bank 15 years ago as a help desk technician. Frank always worked the early shift from 7:30 AM to 3:30 PM. One day, Frank received a text message from his manager, Marc, which read, over the last three weeks, I have noted that on a couple of occasions, you were more than 30 minutes late. Please take care to come to work on time.
Frank, who had just completed his mandatory Respect in the Workplace training, marched straight down to HR and filed a formal complaint against Marc based on the contents of the text message. Human resources asked if the contents of the text were accurate.
Frank admitted the statements were technically truthful, but he stated that he felt bullied and harassed by the tone of Marc's texts. HR advised Frank that Marc was merely doing his job as Frank's manager. HR told Frank it was critical that he arrive on time, or his employment could be terminated.
Over the next two months, Frank was over 20 minutes late twice. On both occasions, Marc warned Frank verbally that there would be repercussions if he did not improve. After receiving three complaints from employees concerning Frank's tardiness, Big Bank terminated Frank's employment for cause and provided Frank with his ESA entitlements. Frank sued Big Bank on the basis that there was no cause and that his termination was a reprisal for calling out Mark's bullying. John, could Big Bank yank Frank for cause?
JOHN PETERS: Again, my favorite answer-- maybe.
COURTNEY MARCH: How so?
JOHN PETERS: I think it's very difficult-- I mean, they didn't allege it. I would think it would be almost impossible to establish super cause, and they did not allege willful misconduct or in this case, probably willful neglect of duties. So I think cause under the ESA is out of the question.
And there's no clearly-- or at least from this fact pattern, there doesn't appear to be a clear intent to be late. He just might be having sleeping difficulties. So I do think, though, that his behavior is concerning, and the employer should be looking into this matter.
COURTNEY MARCH: OK, so Big Bank did not yank Frank for willful misconduct, disobedience, or willful neglect. Do they not have common law cause?
JOHN PETERS: I think that's the real question here. That's how they terminated him. They did not yank Frank for super cause. But as Craig alluded to, this is a longer-serving employee, and you have to consider the context and the circumstances of his dismissal.
COURTNEY MARCH: So the fact that Frank was a 15-year employee, that must be relevant.
JOHN PETERS: Absolutely. Now, length of service does not necessarily-- like a longer-serving employee doesn't necessarily give you a pass. But it's relevant in examining the overall history of the employee's performance. As Craig alluded to in the last fact pattern, unlike Charlie, Frank has been there for 15 years.
Frank doesn't appear to have a lateness problem over the course of his employment. It only started to appear recently. So I think it's just an aberration that has to be taken into account. And I think you have to be very careful in the circumstances when proceeding with Frank.
COURTNEY MARCH: But the critical nature of his job-- he's a helpdesk technician. His tardiness would be a serious problem because he'd be needed at Big Bank, right?
JOHN PETERS: Again, absolutely. The helpdesk, it's sort of the front line, a very important role. You usually get people stressed out. It's not an easy job to handle. And it would be-- especially in the context of a large corporation and/or a bank, where computers and the software has to be running and has to be running effectively, and timeliness and response of helpdesk is very important. So I think it can be a big problem for the employer, and they have to take this behavior very seriously.
COURTNEY MARCH: But Big Bank barely started to address the issue before they fired him. And then they fired him for cause not longer after he filed a complaint of harassment. Is that not a problem?
JOHN PETERS: I think it can be a big problem for the employer, which could have been avoided.
COURTNEY MARCH: How so?
JOHN PETERS: I think HR handled the original issue correctly. Again, Frank, fresh off-- employers will see this when you do offer Respect in the Workplace training, employees-- there's an uptick on complaints. So HR reacted properly. They did do an investigation.
And I think they established properly that this is not a case of harassment or bullying. And it's actually a case of Marc doing his job as manager and taking care to advise employees when they're not acting properly.
COURTNEY MARCH: But they kept it internally. They didn't hire an independent investigator.
JOHN PETERS: And, again, typically, HR can, especially if they're trained, investigate minor incidents or complaints of harassment or bullying. And I think that's exactly what happened here. This was all about the text, so the facts weren't really at issue. And I think this is not something that you'd have to go outside to an independent investigator.
COURTNEY MARCH: But Big Bank fired Frank soon thereafter for cause-- for being late twice in two months. Is that not a reprisal?
JOHN PETERS: Again, it's problematic for the employer. I think when someone brings forward a complaint under your mutual respect policy or under the Occupational Health and Safety Act, you have to take it seriously. You have to investigate. And I think they did that, so they definitely acted properly.
But when dealing with his performance or his neglect of duty, that also has to be taken into account under, who is Frank? Alluding to what Craig said in the previous fact scenario, was there a potential disability issue? Was Frank having difficulty sleeping? Was he under stress or anxiety?
This seemed to be an aberration for Frank. It wasn't a pattern that was occurring over months and months. There were only a number of occasions where he was late, which is serious. But I think they definitely missed the mark and pulled the trigger too soon.
COURTNEY MARCH: Now, what if they dismissed Frank without cause?
JOHN PETERS: I still think the termination in the context is probably a mistake given the proximity to the complaint. Even though the complaint was not founded, I don't think there's any evidence that Frank made the complaint in bad faith. I think he made it in good faith. He didn't maybe understand what was required to reach the level of harassment.
And in the Occupational Health and Safety Act, there's a clear statement that when a manager is doing their duty and criticizing or disciplining an employee or just advising an employee of performance issues, that cannot and would not normally be harassment. I think even a without-cause termination in these circumstances is setting yourself up for a headache, a reprisal claim, which they received, and an aggressive plaintiff's counsel.
They could have avoided it all by continuing to monitor his lateness and asking him to improve and warning him of the repercussions. I just wouldn't advise the client in the circumstances to yank Frank.
COURTNEY MARCH: Thanks very much, John. Moving on to The Gas Thief. Kema has been employed as one of four tow truck drivers with ABC Towing for 15 years. Until recently, the company had no concerns with her performance or conduct.
ABC Towing used one gas card for its drivers to fuel their trucks. Drivers were required to log their mileage of the vehicle when a gas purchase was made. However, the drivers did not typically do this. The drivers has regular shifts but would often change shifts amongst themselves informally.
Recently, ABC Towing noticed excessive fuel purchases. The company was convinced one of their drivers was stealing gas with the company's gas card. The company's HR supervisor put together a chart cross-referencing the fuel purchases and drivers' approximate shifts based on the posted schedules.
The company did not speak with any of the drivers in order to avoid alerting them to the investigation. Based on the chart, ABC Towing was certain that Kema was the fuel thief-- that she had used the gas card to steal $500 in gas. ABC Towing immediately terminated Kema's employment for cause. Craig, did they have cause?
CRAIG STEHR: Well, this is one where I think it does come down to the investigation. We're dealing with a theft case, which I think is apparent on the facts. Based on the investigation and the facts available to the employer when they made the decision to terminate, my own view would be no. And, again, this is one that's based on a relatively recent case in Ontario, and that was the conclusion that the court came to.
If there had been clear evidence of a theft-- that Kema committed the theft, then certainly I think we would have been in just cause territory, and that may have been the right approach. But here we'll get into it, I think, in a bit more of the discussion. But the company pointed the finger at Kema, and I think their evidence was problematic.
COURTNEY MARCH: Does Kema's length of service impact the assessment?
CRAIG STEHR: I think it should, certainly. And, again, we're looking at the whole context of Kema's employment that has to be taken into consideration. Now, I don't think that a long-service employee is necessarily any more immune from a short-service employee if they're stealing from the company-- certainly if the theft is of significance. So I mean, in this case versus an insubordination case or performance case, in my own view, I think that the length of service is less important than it would be in other cause-type scenarios.
COURTNEY MARCH: Would it be a relevant factor if Kema had engaged in misconduct previously?
CRAIG STEHR: I think it helps an employer get over the cause line, certainly. But, again, I think the evidence here was short. It came up short. And so I don't think that even if Kema had engaged in any sort of misconduct before-- unless it's really of a similar nature. It might come into more play at that point.
But even still, like I say, the evidence here was a bit deficient because we're looking at, really, an investigation where Kema didn't have an opportunity to respond at all. And on the actual facts of the case, which aren't on the slide here, Kema asked-- she asked, why didn't you ask me about this? Why can't I respond? And their response was essentially, well, we didn't want to get into a, quote, "he said, she said" type scenario.
And so I think that that's problematic. The fact that the drivers weren't effectively logging their mileage to show what gas requirements would be, I think that's also a problem in the employer's evidence here and also the fact that the posted schedule may not have actually reflected when Kema-- when she was driving herself because drivers did have a practice of swapping shifts. I think that that also is problematic, especially since it doesn't seem that the employer interviewed any of the drivers to ask and clarify who was exactly driving on the date of the fuel thefts.
COURTNEY MARCH: So was there an obligation for management to approach Kema and the others in the investigation?
CRAIG STEHR: I think, in this case, yes. I think looking at ascertaining the evidence necessary to sustain a theft allegation, I think you need clear evidence. This is an important allegation that's being made against an employee. And the evidence seems to be soft. And so I think, in this case, certainly, I think that there is an obligation. I think the court-- and I think that that's a key reason why the court was unwilling to sustain just cause in this case is because the employer did not take additional steps to verify the facts that they thought that they had.
Now, in a different-- if we shift things a little bit here, and if we knew that drivers always work the shifts that they were assigned, that there was no changing or that the schedules were updated if there was any change so that we had a reliable schedule in terms of which drivers were driving when, if we're looking at employees who-- a situation where all of the drivers were logging their mileage accurately, and so we had a reliable record, I would say, in that case, it's probably less important.
There are decisions from the courts recently that say, look, yeah, I mean, an investigation is important to ascertain what happened. I think that that's clear. But let's say you've got a theft and that that is clear on the facts. I don't think that an employer in that case, just because the investigation may have fallen short procedurally, that that undoes the fact that you've got an employee who stole from the company. If there's cause, there's cause, regardless, in my view, in this type of a case, whether or not the investigation hit the gold standard.
COURTNEY MARCH: Now, if Kema had been interviewed, and she lied, what would the impact be?
CRAIG STEHR: Right. Then we're bringing in an element of-- and this assuming that there was culpability on the part of Kema, that she had engaged in wrongdoing. Probably more so it'd be odd for her to lie if there wasn't culpability. But moving past that point brings us into the dishonesty category of cases.
And so if you've got a situation where an investigation is being run into certain allegations, and the employee is untruthful, is dishonest in the course of that investigation, that dishonesty can, in and of itself, form the basis of just cause.
COURTNEY MARCH: What about the amount of the theft? Would that factor into the assessment at all? $500.
CRAIG STEHR: Yeah, it's an ongoing debate, I think, within the bar and amongst employers in terms of, does it matter whether it's $5 or $5,000, $50,000? Does the extent of the theft really matter? Should it? Because at the core, we're looking at trust in the relationship. And the theft of something worth $5 also strikes at the trust relationship, I think, in a fundamental way.
I think there are a few courts that will uphold cause when we're looking at a fairly nominal amount. And, again, looking at the whole context of the employment relationship, was this a longer-service employee or not? Did this employee steal something nominal within days of being employed? That might result in a different situation or a different outcome, rather.
Are there extenuating circumstances? Was this a situation where there is an addiction, a gambling addiction that perhaps has affected a long-term employee, and now it's caused them to start stealing from the company? There may be human rights elements that maybe need to brought into the consideration as well.
So to go back to the first question though, Courtney, does the amount matter? I think to courts it does. And I think it's something that we would need to take a look at on the facts of the particular case to assess whether it would rise to just cause in the circumstances. But I would say a court is going to have a lot more reluctance on a practical basis maintaining just cause where the amount of the theft is relatively low.
COURTNEY MARCH: Thanks, Craig. I believe Elisa has one more question for you.
ELISA SCALI: Yeah, we have a question in the Q&A. What if there was a policy regarding theft? If you steal, you're terminated for cause. Would that make a difference?
CRAIG STEHR: I think it helps. Certainly, it helps. I don't think it bulletproofs you in any regard. I think a court is still going to assess the larger circumstance. Certainly, it wouldn't inoculate you against any human rights obligations. That would still be a factor.
If it were one of those unusual situations where that was at play or factoring in, I think it gives you something additional to lean on because, again, so long as the employees are well aware of that policy, I think it can give you a bit of a boost. But I don't find that courts are particularly-- well, I should say, I don't find that most judges will feel bound by a zero-tolerance policy.
ELISA SCALI: Thanks, Craig.
COURTNEY MARCH: All right, now we're going to meet Chad. Chad has been a manager of Inatech for 30 years. He has 5 direct reports and over 45 indirect reports. Now, the workplace at Inatech is social with lots of jokes and banter, which Chad and his colleagues enjoy. The employees often tease one another throughout the day, and sometimes the jokes are inappropriate and sexist.
After meetings, Chad and his two closest colleagues, Jett and Jack, often tap one another on the buttocks and say, good game, pretending that they're athletes. Two weeks ago, after a meeting, Chad was joking with his direct reports when he slapped Tanya on the buttocks and said, good game. It was clear that Tanya was upset by this, and Chad apologized and said it was a joke.
That afternoon, Tanya submitted a complaint to Inatech's HR supervisor, who initiated a workplace investigation. The investigator interviewed both Chad and Tanya as well as four other employees. This morning, the investigator provided their report to Inatech and confirmed the incident. Inatech immediately terminated Chad's employment for cause. John, do we have cause here?
JOHN PETERS: So unlike my previous answers, I will not say maybe. There is no question that Chad is bad. He's responsible for 50 people. And he seems to be, on a consistent basis separate and apart from the incident in question, acting like a frat boy. It's just unacceptable in the workplace.
COURTNEY MARCH: Do we have common law cause, or do we have super cause?
JOHN PETERS: I think it should be super cause because it was clearly deliberate. But the Ontario Court of Appeal disagrees with me. They require there be something more like evil intent or mens rea. So carelessness, thoughtlessness, or just a bad decision in the moment won't get to the level of super cause, or it won't get to an area where the courts have an appetite to deny the person of their ESA entitlements on termination.
COURTNEY MARCH: Now, Craig, does the context of the workplace matter here? Would it matter if Tanya had previously engaged in banter or horseplay?
CRAIG STEHR: I don't think so. Not necessarily. There used to be, I think, a number of years ago, maybe more of a willingness by courts to look at the environment of the workplace and if it was, to build on what John said, a frat environment, then perhaps be less willing to find cause for that kind of behavior in that circumstance, basically saying if it was the norm of that particular workplace, you're not going to punish the person.
I don't think that that's the approach that courts take today. I don't think that that would be a helpful response to a just cause allegation by an employee. And, certainly, I think the bigger risk is maybe the issue of condonation, but so long as management was unaware--
Now, if this has been going on for 30 years, and the whole workplace is functioning that way, yeah, maybe we've got a condonation situation that we need to be more concerned at and look more closely at. But I don't think that the environment otherwise provides Chad with a pass here.
COURTNEY MARCH: So, John, do you think the behavior was condoned by the employer?
JOHN PETERS: I certainly wonder, where was the employer through all this? Again, not in the incident with Tanya but throughout this behavior, this frat boy behavior between Chad, Jett, and Jack, it just seems the employer knew or ought to have known that Chad's repeated juvenile behavior was going to end up in a bad case scenario.
They should have foreseen that Chad was bound to be Chad, and this was going to happen-- that Chad one day would go too far. I think it was almost like a runaway steamroller on a tarmac that you can see coming at you for a kilometer. The employer should have stopped this before it happened. It should have stopped the behavior. They should have got involved.
I think there is a strong argument that the employer could be considered to have condoned this behavior. And although I still think there may be a common law cause, I think the employer has a lot to answer because the employer, it appears, had done nothing to prevent this, even though this behavior was ongoing for some time.
COURTNEY MARCH: Now, you'll remember that Chad apologized. He said he was sorry. Craig, to what extent does this apology matter?
CRAIG STEHR: Yeah. The behavior been going on for so long. I'm not sure that the apology really has much weight here. But, again, I think going back to context and the contextual approach, I think that it would need to factor in to the assessment. But, again, I don't think it necessarily lets Chad off the hook here.
COURTNEY MARCH: What if Chad and Tanya were peers at the same level?
CRAIG STEHR: Again, I don't think that that necessarily matters. Going back to some of my comments about the environment, perhaps if Tanya had been engaging in this behavior with Chad for a lengthy period of time before or there was a back and forth here with similar unsavory jokes, then perhaps I think Chad may have more of a basis to suggest that this was not improper in the workplace context. But, again, I don't think that those arguments make it very far today.
COURTNEY MARCH: So in the same vein, we know we're in a post MeToo era. So where's the line for just cause as it relates to sexually harassing behavior in the workplace?
CRAIG STEHR: Yeah, I think we get there more quickly than we used to, and I think that's a good thing. But we've seen a series of recent decisions where sexual harassment, perhaps not of the most severe nature but still sexual harassment in the workplace has not been found to amount to cause. And some of it being even some touching or mimicking or actions, gestures, these types of things haven't been found to rise to the level of just cause.
Personally, I tend to be a bit more bullish on it, certainly looking at an employer's obligations to satisfy their obligations under Occupational Health and Safety legislation, obligations to deal with harassment in the workplace. I would rather, I think, have to explain why we took a just cause position to a court dealing with a perpetrator of sexual harassment rather than explaining subsequently in a constructive dismissal-type scenario why we didn't take any action to protect somebody like Tanya here from a perpetrator of harassment in the workplace. But, again, we need to take a look at the whole context and assess what the right approach is with that particular employee in those circumstances.
COURTNEY MARCH: John, do you have any concluding thoughts here with respect to Inatech and Chad?
JOHN PETERS: I just think that the law will evolve, that this sort of behavior in the workplace, it just can't continue. I think-- I mean, this follows a case at the Court of Appeal that this fact scenario happened. And they did examine the difference between common law and ESA or super cause. The court did find that there was a common law cause in the circumstances.
But they couldn't reach the level of almost evil intent. I think, though, that in the future, it might get there. I think the law is going to continue to evolve. And as Craig alluded to earlier in the areas of harassment or violence in the workplace, I think that's an area where the courts are taking it seriously and are not as keen to protect employers who just misbehave in that manner. So, I think, stay tuned. I think this could end up a super cause one day.
COURTNEY MARCH: So, John, where you find common law cause but you don't find super cause, what happens? What does the employer do?
JOHN PETERS: So you dismiss for cause, and you provide them with their entitlements under applicable legislation in Ontario under the Employment Standards Act. You're obligated to provide them with their notice under Section 57 or pay in lieu of notice. You also have to provide them with severance pay if they qualify, if they've worked for more than five years, and the employer's payroll is high enough.
And you have to continue benefits for that common law notice period under Section 57. So it is possible to dismiss for cause. But if you're going to do so, you've got to be very careful. And probably the safest move every time is dismiss under common law cause as opposed to under the ESA and deprive them of those ESA entitlements.
COURTNEY MARCH: And, Craig, do you have anything else to say regarding Inatech and Chad?
CRAIG STEHR: Yeah. I think it's important for management, for HR to be aware of what's going on in the workplace. And this is not a case that we were involved with. But it mimics at least a few that I've seen at least over the last few years, where the environment has sort of spun out of control.
And some of it is because management trusted a supervisor that then proceeded to create basically a personal fraternity within the particular office. Sometimes it's because you've got a manager locally who is essentially the Michael Scott of workplaces and fosters it that way, may be oblivious to what they're actually doing. But that's where the risk comes in is, I guess, number one, making sure you got the right people are in the right positions but also keeping an eye on the pulse as to what's going on.
COURTNEY MARCH: Thanks very much. All right, Craig, so now what?
CRAIG STEHR: Yeah. So looking at our final slide here in terms some guidance, I would say, yes, just cause still exists. And that's the eternal question. As we get more and more cases from the courts each year, that seemingly might make it more difficult to assert just cause.
I would still say over the last decade even, I don't think much has changed all that much. The context, certainly. But for the most part, the assessments are still the same. We're still required to look at a contextual analysis. We're still required to assess the proportionality of response because at the end of the day-- and the courts have said this-- essentially, this is the nuclear option.
And a court is not going to too easily go down that road and remove an individual's career or potentially career, but their work, their job, very willingly unless there's absolutely the basis to do it. So one thing to assess always is, is there a step short of just cause that would be more appropriate in the circumstances? But with that sort of proviso, I would say, yeah, absolutely, just cause still exists.
We would say also, do not attempt in any way to establish cause by defining it in the employment agreement or a handbook. Employment agreements and contract drafting and termination clauses, that could be the topic of an entirely separate webinar. But what we would say because we haven't touched on it in any great detail here is sometimes there is an inclination to set out with some specificity in an employment agreement's termination clause what exactly is just cause.
Particularly because of some recent decisions from the courts, we would say that that is probably fraught with a significant amount of risk because always there would be something in that list that does not quite rise to the level of just cause or the Employment Standards' just cause that John has called super cause. It can mean that the just cause provisions are enforceable.
And, recently, the courts have confirmed if even your just cause provisions are unenforceable in your employment agreement, the entirety of your termination clause will be unenforceable as well, even if you're not trying to rely on the just cause provision in the employment agreement. So we need to make sure that we get that right. And these days I think less is more.
But certainly leading to the next point there, are your employment agreements up to date? We always recommend having counsel review these on an annual basis. It's not a "set it and forget it" type of situation that we would propose. So just make sure that those termination clauses are up to date and responding to what we've seen with some fairly significant changes over the last few years here and evolving and moving forward.
And, of course, seek action-- seek advice, rather, before taking action. That would be something we recommend as well. Always talk to counsel and make sure that the case is there and that all of the necessary steps and prerequisites have been taken before you pull the trigger on just cause.
One last note just to close it off that I would comment on is we've been focusing in our presentation on Ontario, which is, firstly, when we talk about the Employment Standards Act and the provisions that we've been discussing, those are all specific to Ontario. It may differ depending on which other jurisdiction we are dealing with. And, certainly, a jurisdiction that affects us and we deal with a lot in Ottawa here is the federally regulated businesses as well. And so that's the other thing to keep in mind.
Federally, I would say that really we're looking at the same and federally regulated businesses are looking at the same type of-- federally regulated employers are looking at the same type of assessment. Just cause, of course, still exists under the Canada Labour Code. It is one of the few ways that an employee can be terminated if they-- when we're looking at nonmanagerial, nonunionized employees. So the assessment in terms of cause and the framework we've been talking about would still apply to federally regulated employees, and just wanted to just clarify that.
ELISA SCALI: OK, we have a few minutes left, so I'd like to go over some of the questions in the Q&A since we have some time. One question relates to performance-based cause. So you have an employee that has certain objectives that they need to meet as part of their duties.
The person's not meeting their objectives, and it gets to the point where they're put on a performance improvement plan. They're still not performing. At that point, can you terminate for cause? Is that justified?
JOHN PETERS: I think that's quite difficult. And Craig alluded to it earlier when going over the types of clause. Terminating someone on a performance basis is the more difficult area versus misconduct.
I think even though you've given the person every opportunity, and they've tried, and they haven't succeeded and haven't met your metrics, I still think it's really problematic to dismiss somebody for just cause for poor performance. I would think that the safer option would be dismiss the person without cause, provide them with a package, and avoid the headache.
ELISA SCALI: Craig, do you agree with that?
CRAIG STEHR: Yeah, I mean, my own view is-- and we outlined the steps in the presentation in terms of performance-based cause and how to get through that. But you always need to, of course, make sure the employee is aware of the standard, communicate how they're falling short of that standard, provide support and tools for them to reach that standard and the time to reach that standard, and advise that they may be subject to discipline up to termination for cause if they don't meet it.
And so when you're going through your performance improvement plan, that's all typically would be a part of that process. And I think even if you go through that cycle two, three, four times, I still don't think it's a sure-- well, I don't think it's a sure thing. I think it's anything but a sure thing that you would sustain cause in that situation.
And so I would suggest looking at the larger context of the environment, the practical circumstances, and assess whether or not the preference would be just to return the individual to the business community and proceed on a without-cost basis.
ELISA SCALI: All right, thanks. Now, you mentioned, Craig, that this is an Ontario-- we're focusing on Ontario here. But there's employment standards legislation in each province. Is there ESA super cause, as John likes to call it?
That's not unique to Ontario. The other provinces have similar-- I'm going to exclude Quebec because it's very unique, their legislation. But for the other provinces, would you say that the test is similar?
CRAIG STEHR: Yeah, it's not identical to Ontario's approach in other jurisdictions, so we would need to take a look at exactly that jurisdiction. But what I would say generally is there's going to be a heightened requirement before an employee is going to be deprived-- before an employee is going to be permitted to be deprived of their statutory entitlements.
And so looking at that-- and I don't know that we were clear-- looking at that two standards of cause-- again, regardless of which jurisdiction we're looking at here, again, with Quebec not included in that, but you may have a situation where you have common law cause, but you don't have and/or suspect you won't reach that super cause level required to not pay out the statutory entitlements.
And so you may have a situation where you pay out, where you're required to pay out the statutory entitlements while still taking the position that common law cause exists, and the employee is not entitled to those additional common law entitlements. And you would do it, of course-- to be very clear in terms of what you're doing, we would recommend getting advice and guidance before taking that step. But the way that it is set up, yeah, conceivably, you could have an obligation to pay one but not the common law cause that has the lower threshold.
ELISA SCALI: OK. And because we have these two different thresholds, we have a question here regarding a point you made about the employment agreement and defining cause. Would you recommend using exact wording from the ESA instead of perhaps trying to list certain misconduct? And I'm just going to-- we are going to be having a webinar in the fall that deals in detail with this topic. But for today's purposes, maybe you could just-- either John or Craig-- give us a brief response.
CRAIG STEHR: Yeah, what you want to make sure the language is doing is ensuring that at least the Employment Standards Act entitlements will be paid out if required in a cause situation. And you want to be clear that you're not intentionally or unintentionally waiving those statutory entitlements in that situation.
Another approach is to basically say, OK, we're not going to follow-- for our cause terminations, we're not going to follow the common law threshold. We're going to stick it to the higher, more onerous statutory threshold, to the super cause, and use that as the basis. And that's going to be how we set it out in our employment agreements.
That could work. But, again, it always comes down to the language. And if you're taking that approach, essentially, you are making it more difficult possibly conceptually to terminate for cause, so. But, again, it all comes down to the wording and the language that are used, and, certainly, you would want to get some guidance and advice on the language, certainly.
JOHN PETERS: I think it's problematic sometimes if you copy the language from the ESA because that can change. And so what might be enforceable today because you used the exact proper language under the Employment Standards Act, that can change in the future. And you might be stuck with a contract that's out of date.
So you have to be very careful. We have, over the last three years, taken great pains to make sure that-- and we keep tweaking our employment agreements to make sure that they're up to date and that they are enforceable because courts are always looking for reasons not to enforce an employment contract. So you have to-- I would not try and mimic the ESA language necessarily because it could be enforceable today but not tomorrow.
ELISA SCALI: That makes me a little nervous too because if you make one little error in the wording, the way things are going these days, that will be fatal.
JOHN PETERS: I joke around-- I say to my clients that if you use the wrong font in your employment agreement, you could be in trouble. So you definitely have to be very, very careful when drafting contracts.
ELISA SCALI: That is so true. We have to be very careful these days. I think we have time for one more question. When an employer is claiming just cause for termination, can you claim more than one basis for just cause, I'm going to say?
CRAIG STEHR: Yes, absolutely. And I would recommend asserting exactly what it is you're relying upon. You don't have to provide the employee with an essay enumerating all of the concerns and explaining all of the details. But I think you need to be clear as to what you're relying upon for just cause.
And if you're relying on insubordination and theft, then you would want to be clear about that because if you do not, I think that you run the risk of not being able to rely on the basis of cause that was not communicated to the employee at the time of termination down the line if the employee commences proceedings. And so, yeah, absolutely, you want to include that.
And then what I would typically do is be clear, look, we're relying on both of these incidences and these bases of just cause, if there's two, three, whatever they all are, as just cause collectively and individually because that's the other assessment. Because sometimes we're looking at there's multiple basis for cause, but each one on their own might not satisfy a court separately and individually.
But you need to be clear that our view is, of course each individual case or basis forms on its own a distinct basis for cause. But, certainly, collectively, all together, it all adds up to cause.
ELISA SCALI: All right, thanks, Craig. So it looks like we are at 10 o'clock. I'd like to thank John, Courtney, and Craig for this informative session. I hope everyone found it as informative as I did.
And we have our webinar coming up on June 22. That's the next webinar. It will be on pitfalls in workplace investigations. I hope that everyone can join us for that webinar. And as I mentioned, we do have another webinar coming up in the fall that is going to focus on pitfalls in drafting in your employment agreements, policies, et cetera. So stay tuned for that as well, and we hope you'll be able to join us for that.
Now, your feedback is very important to us with respect to these webinars because we're always trying to improve upon them and provide you with the best webinar possible. So if you would like to provide us with your feedback, just aim your camera at that QR code to access the survey. And we look forward to receiving your comments. So that is it for today's presentation. I hope everyone has a wonderful day, and we will see you in June.