You’re going to pay for firing a long-term employee with no negative history
Beware the new boss. They are often the beginning of your end.
Terry-Lynn learned this the hard way. After she had worked 11 long years as a skin care technician at a spa, her boss resigned to take a new job.
When upper management moved in to “reassess” the state of the nation, they decided that TerryLynn was underperforming. I would pause here to note that during those 11 years, she had never received any written warnings indicating her job was in danger nor had any serious discussions about her performance.
Management gave Terry-Lynn a letter which criticized her for lacking enthusiasm and exhibiting complacency, not following policies and failing to hand in paperwork on time, and not generating enough revenue.
They told her that she must have two successful months out of the next three. If she did not reach that goal, she would be terminated at the end of the third month.
Terry-Lynn was floored and cried throughout the meeting, leaving early because she was so upset. Nonetheless she co-operated with the process and attended an hourlong coaching session with the boss once a month. Her paperwork improved drastically. Her revenues increased.
But that wasn’t good enough. Even though she was doing everything they asked, she was perceived in the coaching sessions as still being too complacent and laid back. Ultimately she was terminated for her “bad attitude” at the end of the third month.
Terry-Lynn was not in a union and the employer had the right to terminate her employment. If they had simply given her a reasonable severance package at this time, there would be no story to tell. Instead, the employer decided that Terry-Lynn was entitled to nothing and her lack of attitudinal improvement constituted just cause for her termination without a package.
Terry-Lynn’s story reminds me of the practices of many big banks. I am constantly seeing people who have been terminated for not reaching goals or performance levels. It does not matter if the employee has been there for 15 years, or what strengths they may have.
If they are not selling enough or their error rate is slightly too high, the banks are pretending there’s just cause for their termination. Many employees probably just walk away. With those who obtain legal counsel, however, the banks inevitably back off and settle.
As the judge in Terry-Lynn’s case noted, mere dissatisfaction with an employee’s job performance does not justify dismissal. An employee cannot be summarily dismissed without notice just because they do not live up to expectations. It must be proved that the employee is guilty of serious or gross incompetence so extreme that it constitutes a repudiation of the employment contract.
Basically, the employer does not have to prove the employee was engaging in wilful misconduct, but they do have to show the conduct was so extreme and persistent that the employee was not even trying and didn’t care.
If you’re going to employ somebody for more than a decade and then suddenly claim their performance is so bad that they can be fired with nothing, you’ve got a big hill to climb.
Terry-Lynn was awarded pay in lieu of notice along with $15,000 in aggravated damages.
The employer had an obligation at law to act in good faith in the manner of the dismissal.
This employer told Terry-Lynn she had to improve two out of the three months and, numerically, she did. There was no evidence that managers coached her about her “attitude” even though this was alleged to be the cause of her termination.
All of this, in the context of suddenly having raised the performance threshold after 11 years of loyal service.
Routinely, I see clients who have been terminated after long service. As soon as it becomes evident there was no “restructuring” or any general cutbacks, I will often ask if they recently got a new boss. They stare at me as if I’m psychic.
The phenomenon is all too common. In the absence of a dramatic personal event, employees do not tend to decline in their performance suddenly and out of nowhere. Too often, it is the new boss who perceives them as being an underperformer.
Fortunately, most employers are not silly enough to allege just cause.
Ed Canning practises labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at ecanning@rossmcbride.com