HARD, NOT IMPOSSIBLE, TO FIRE INEPT EMPLOYEES.
Hockey fans may not sign the paycheques but they do monitor their favourite players’ performances with passionate intensity.
When the heavily favoured Toronto Maple Leafs once again failed to make it past the first round of this year’s playoffs, fans’ grief turned quickly to anger. Much of it was directed at the team’s highly paid superstars who have developed a reputation for lacklustre playoff performances.
Toronto fans and the general manager alike now have the opportunity to spend the summer wondering: What do you do when you have some of the highest-paid players in the league and they have yet to make it past the first round, five years in a row? What do you do with an elite winger paid $11 million a year but, come the playoffs, is as likely to shoot the puck over the glass as into the net?
Albeit with less public scrutiny, there are many employers asking essentially the same question: How do you rid yourself of an employee who tries hard but is apparently incapable of doing the job?
The answer: not easily. Frequent readers of this column already know that an employer dismissing an employee for cause must proceed cautiously. Although the “cause” usually is conduct-related, the same stringent test applies to performance. It is actually even more difficult.
One employee cannot be made the scapegoat for a failing business model, the effects of a recession or general dissatisfaction within the workplace culture. Before they can be dismissed for performance-related reasons, there must be clear evidence that the employee consistently failed to meet reasonable standards. Indeed, some courts have held that to be dismissed for cause, incompetence must have some element of wilful misconduct.
The past 18 months and the restrictions of the pandemic threw many industries into chaos. If a company’s business has been devastated by COVID, it is unfair to hold an employee to standards that predate the pandemic. The standard by which they are measured must be fair and reasonable.
An employee cannot be blindsided by the revelation that they are about to lose their job. They must be warned what is at stake, why they are deficient and provided a chance to fix their behaviour and offered training as required.
If an employer remained quiet for month or years as productivity slowly dipped, they have effectively condoned that standard. This does not mean that employers need be stuck with the status quo. They can still hold employees accountable — they just need to give them fair warning first and explain that the standards of yore, or their acceptance of it, will no longer apply.
If an employee has been warned and continues to fail to meet the reasonable expectations set out, the employer now has the basis to dismiss for cause.
Sometimes, this is not enough. An employer may not be satisfied with simply ridding themselves of an unproductive worker. What if the employee was not only lazy but negligent, and their negligence cost the company thousands of dollars in ruined equipment or lost business? Can the employer sue the employee to recover the damages?
In one of the landmark cases from the Ontario Court of Appeal, a teenage employee took it upon himself to refuel a lawn mower at his place of work. With good intentions but lack of foresight, he lit a match and held it up to the mouth of a gas can so he could see how much fuel was inside.
The resulting inferno burned down his employer’s boathouse and all its contents, resulting in damages of hundreds of thousands of dollars. The employer received an insurance payout, but the insurance company subsequently sued the teen through a subrogated claim.
The court concluded that even though the employee was negligent, he should not be held personally responsible for the unintended damages caused by his lapse in judgment.
The court reasoned that for public policy considerations, it would not be fair to hold employees to such a standard. The average employee does not accept a job with the understanding that if they make a mistake, they could end up on the hook for hundreds of thousands of dollars in damages. Employers are in a much better position to obtain insurance coverage, absorb the damage as a business, or make liability a specific term of the working relationship.
Of course, if an employee has been grossly negligent or intentionally caused the employer damage, that is a very different matter. In one such case, a skilled employee, an internal accountant, missed a tax payment.
Disgruntled employees who have just lost a job are often tempted to threaten their former employer with a lawsuit. Before taking this step, a little introspection is in order. Is the would-be litigant confident that her employment history will stand up to scrutiny?
If an employer discovers that the ex-employee now suing them stole from the company, took and used confidential information or committed fraud, they will be only too happy to countersue.
Although employees enjoy many legal protections, employers are far from powerless when it comes to dismissing chronically underperforming employees or an employee who has actively damaged the company.
The Toronto Maple Leafs may be stuck with the contracts signed for years to come, to the chagrin of their fans. Thankfully, the average employer has far more flexibility when it comes to ridding themselves of disappointing talent.
Howard Levitt is senior partner of LSCS Law, employment and labour lawyers with offices in Toronto and Hamilton. He practises employment law in eight provinces. He is the author of six books including the Law of Dismissal in Canada. Michael Vandermeer is an associate at LSCS Law.