It is a fundamental principle of wrongful dismissal law that an employer must give a dismissed employee reasonable notice of termination, or provide her with severance pay in lieu of that notice. The exception to this rule occurs when the employer has “just cause” for dismissal – in such cases, the employer can fire the employee immediately, without incurring any severance liability. Under Canadian law, “just cause” will generally exist if an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or wilful disobedience. Examples of such misconduct include theft and routine insubordination.
What happens when an employer does not respond swiftly to address such misconduct? Can an employer fire an employee for past misconduct and still avoid a severance payout? Are there things an employer should avoid doing if it plans to rely on certain misconduct to justify termination?
The employment law principle underlying all of these questions is condonation. An employer will be found to have condoned an employee’s misconduct if the employer acts (or fails to act) in a way that suggests it is overlooking or allowing that misconduct. If condonation occurs, the opportunity to dismiss for cause based on that misconduct is lost.
Given this, if you think an employee has engaged in misconduct rising to the level sufficient for a with cause dismissal, what should you do (or not do, as the case may be)? Ultimately, we recommend that you consult with an employment lawyer as soon as possible. In the meantime, here are five do’s and don’ts to help you keep your options open:
1. Do speak to the employee right away upon learning about the misconduct, and express your concerns. Follow this up immediately with written documentation – provide the employee with a letter setting our your concerns, and keep your own notes about the misconduct, and how you have addressed it.
2. Don’t make empty threats. If you warn the employee about the potential consequences of repeated misconduct, but don’t follow through on those warnings, your inaction could amount to condonation.
3. Don’t wait too long to act. An employer is entitled to a reasonable time to decide on the appropriate course of action to deal with the behaviour in question, particularly if you are conducting a workplace investigation. However, if you retain the employee for more than three or four months, it will be difficult to claim cause if you ultimately decide on termination.
4. Don’t “reward” the employee for bad behaviour. Giving the employee positive performance reviews, or a raise, bonus, or promotion – particularly if you haven’t warned him about his conduct – are all inconsistent with alleging cause, and tend to imply condonation.
5. Do be consistent. If you tolerate a certain standard of performance or type of behaviour from one employee, it will be difficult (if not impossible) to dismiss another employee for the same behaviour and claim cause.
Interestingly, it is not only employers who are vulnerable to a claim of condonation. The flipside of the condonation coin is where an employee believes that her employer has breached her employment contract in such a fundamental way as to constitute constructive dismissal, but takes no action and continues to work in the new situation without complaint. For our thoughts on the topic of employee condonation, go here.
Have questions about one of your employees? Contact us!