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Just cause not a lost cause

More tips on hiring, firing employees in Canada

By Stuart Rudner

In my last post, I summarized some of the tips on hiring and firing that my partner Natalie MacDonald and I recently shared with James Munroe of 680 News, an all-news radio station in Toronto. As promised, here are some more. 

There is no employment at will in Canada. Employers can dismiss employees at any time, for (almost) any reason, but they must provide notice of dismissal or pay in lieu thereof. I included the word "almost" to acknowledge that the decision to dismiss cannot be based upon a ground that is protected by human rights legislation, and that unionized employees will have additional protections.

Just cause is not a lost cause. Employees can be fired for misconduct (including poor performance), but employers should proceed with caution. There are so many misconceptions in this area, which is why I wrote my book: You're Fired! Just Cause for Dismissal in Canada. The size of the book reflects the complexity of the law. There are no absolute rules and, contrary to popular belief, even stealing is not always just cause for dismissal. If it were, every clerical worker that took a pencil home for her children to use while doing homework would be out of a job.

The punishment must fit the crime, having regard to all relevant circumstances. When assessing whether there is just cause for dismissal, an employer must first consider whether the employee engaged in misconduct. If he did, then some form of discipline will be appropriate, but not necessarily dismissal. The employer must assess the egregiousness of the offence and all relevant factors, such as the employee`s length of service, disciplinary record, the nature of the position and degree of trust required, and any mitigating circumstances. This is known as the contextual approach, and is required whenever summary dismissal is considered.

Investigate first. Employers should never react in haste or based on emotion. Any suspected misconduct should be investigated objectively and thoroughly. This includes providing the accused with an opportunity to respond to the allegation. The employee's response will often be the difference between a finding that just cause did or did not exist. If the employee lies about the misconduct, tries to cover it up or otherwise demonstrates a lack of trustworthiness, courts will be more inclined to agree the relationship has been irreparably harmed.

The manner of dismissal is crucial. Canadian courts have confirmed that employers have a duty to act in good faith in the course of dismissal. Failing to fairly investigate before firing, unnecessarily humiliating the employee by having security parade them out the door in front of their colleagues or other bad faith conduct will result in extraordinary  damages — a topic Natalie MacDonald wrote about in Extraordinary Damages in Canadian Employment Law. This is not a trivial matter. In recent times, several six and seven figure damages awards have been made in Canadian employment law cases.

Unless it is a dismissal for cause, provide a letter of reference. Not only will this demonstrate good faith, it may reduce your obligation to provide pay in lieu of notice.

As a final thought, we noted that if employment law feels as though it is becoming more complicated, that's because it is. HR professionals, business owners and employment lawyers have to deal with a bewildering array of laws and legislation including employment standards, human rights, occupational health and safety, and privacy.

Stuart Rudner is an HR lawyer and a founding partner of Rudner MacDonald LLP, a Toronto-based firm specializing in Canadian employment law. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at srudner@rudnermacdonald.com. You can also follow him on Twitter @CanadianHRLaw and join his Canadian HR Law Group on LinkedIn. 

Stuart Rudner

Stuart Rudner is a founding partner of Rudner MacDonald LLP in Toronto. Follow him on Twitter @CanadianHRLaw. He can be reached at srudner@rudnermacdonald.com.
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