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Being a good employer, effective business not mutually exclusive

Ignoring poor behaviour of manager who 'gets results' can be bad for bottom line and reputation

By Jeffrey R. Smith

Employers have to deal with many obligations and responsibilities towards employees and it may seem, at times, like a burden that gets in the way of doing business.

But is being a good employer and an effective business mutually exclusive, or can an employer accomplish both to the best of its ability?

I’ve seen many examples of bad bosses — and bad employees, for that matter. When these types are around, it usually creates what it often referred to as a poisoned work environment. If it’s a manager or supervisor that creates such an environment, there are both legal and business issues that could arise. If employees feel harassed or treated poorly, the employer could be liable for human rights issues, employment standards violations or even constructive dismissal. From a business perspective, such managers could be harming productivity if employees are disengaged and unhappy, as well as potentially adding to the cost of high employee turnover.

But what if a problem manager is bringing in good results for the company despite her managerial failings? If the manager knows the business and is helping the bottom line, it might be tempting for a company to turn a blind eye to how she manages employees. But there are risks.

Last year, the Ontario Court of Appeal ordered Bell Canada to pay $135,000 to an Ottawa employee. Her manager swore at her, yelled at her and eventually shoved her following a dispute.

When the employee complained, Bell essentially brushed away the complaint, allowed the manager to do a performance evaluation and went into damage control mode rather than helping the employee. The court ruled this was constructive dismissal and awarded one year’s pay — about $90,000 — plus $45,000 for mental distress. Of note, these damages were reduced from the original trial court’s decision, which awarded the employee $500,000 — its estimate of her future earnings until she reached retirement.

In 2008, a group of 25 employees at a Nova Scotia tissue bank filed a labour complaint about their manager, who reportedly subjected them to a “persistent pattern of unreasonable and objectionable behaviour,” including vulgar remarks about sex, race, sexual orientation, threats and taunts about their job security. The manager claimed there was a culture of coarse humour and banter at the tissue bank, but a labour board ordered the employer to pay the employees $10,000 for harassment along with an apology from the CEO.

So while a particular manager or supervisor may know her job well and be making big bucks for a company, if the manager is treating employees poorly it shouldn’t be ignored. In the end, potential harassment payouts, lowered productivity and high turnover could take a chunk out of those big bucks, not to mention the potential harm to the company’s reputation if word gets out. It’s important to have good policies against harassment and, even more important, sticking to them.

Employment lawyers Daniel Lublin and Ellen Low discussed the Bell Canada case in the June 30, 2010, issue of Canadian Employment Law Today, offering a word of caution for employers with managers who might not be treating employees very well.

 “This case illustrates the inclination of the courts to render employers civilly responsible for the acts of supervisors and managers towards their staff. To avoid liability, employers need to put comprehensive policies into place prohibiting abusive, harassing or intimidating behaviour. These policies should be accompanied by a clear process to complain, investigate and address these types of allegations.”

How do you think a company should handle a manager who treats employees poorly but otherwise brings in good results for the company?

Jeffrey R. Smith is the editor of Canadian Employment Law Today. He can be reached at jeffrey.r.smith@thomsonreuters.com or visit www.employmentlawtoday.com for more information.

Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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