Carelessness and sloppiness may be just cause for dismissal but not enough to deny an employee statutory termination pay
Every Canadian province has employment standards legislation imposing minimum entitlements on termination of employment. Where an employee has not signed a written agreement limiting termination entitlements to these minimums or to some greater specific amount of notice or severance, the common law (except in Quebec) implies that the employee is entitled to “reasonable” notice (or pay instead) on a termination without cause.
Many employers assume “just cause” for termination at common law means the employee is not entitled to statutory minimum notice and severance pay. This is not necessarily correct, as the test for disentitlement to statutory and common law notice is not always the same.
A recent Ontario Superior Court of Justice decision reminds us in very clear terms of three important cautions for employers wishing to assert just cause, the last of which deals squarely with the possible differences between statutory and common law standards.
In Oosterbosch v. FAG Aerospace Inc., the employee had worked for almost nine years when the employer, a manufacturer of precision bearings for the aerospace industry, terminated his employment without notice for cause.
The court accepted that in this particular industry, “precision and quality control are essential since the failure of such parts can be catastrophic,” and it was in this context that it assessed the employee’s “failures” and the employer’s system of progressive discipline.
The employer’s system of progressive discipline was exemplary in its structure and application, requiring supervisors to investigate infractions with the employee and a representative of the employee committee. An investigation could result in no action being taken, a coaching or counselling session or a written warning. A third written warning would bring a minimum two-day suspension and four written warnings within any rolling 12-month period would result in dismissal.
The employee received four written warnings in a six-month period for the following misconduct:
•Producing 30 pieces (over 1.5 hours) which did not meet specifications and were unusable due to a defect that should have been noticed after the production of one or two.
•Taking an extended meal break (something he had been counselled for in the past) after he fell asleep in his truck.
•Reporting late without explanation for the fifth time in a period of 12 months.
•Producing 77 non-conforming pieces after failing to properly set or check the specified measurements, admittedly having misread the blueprint and measuring device.
The court found the persistence of the employee’s misconduct, notwithstanding ongoing coaching sessions and warnings, was sufficient to constitute a repudiation of the employment relationship, amounting to just cause at common law.
However, while the court found the employee’s sustained course of casual and careless conduct was inconsistent with the continuation of his employment, it found his conduct was not sufficient to constitute “wilful misconduct.”
“(The employee) was undoubtedly careless and the persistence of that carelessness justified his dismissal. I would not, however, characterize his offending behaviour as ‘wilful misconduct, disobedience or wilful neglect of duty’ that would disentitle him to receipt of termination and severance payments under the provisions of the Employment Standards Act, 2000,” said the court.
The court awarded the employee his minimum statutory entitlements, which amounted to approximately $25,000.
Tips for employers
Oosterbosch reminds employers of the following important cautions:
•Having and consistently applying a system of progressive discipline may often be a pre-condition to successfully asserting cause, but it is not necessarily enough to justify a termination for cause.
•Proving just cause requires evidence demonstrating that the employee has repudiated the employment relationship. Absent a very serious incident of misconduct or dishonesty, this will usually demand proof of repeated warnings and counselling sessions.|
•Just because an employer may successfully prove “just cause” at common law does not mean the evidence will be sufficient to prove the type of “wilful misconduct, disobedience or neglect of duty” required by (in this case the Ontario) statute to deprive an employee minimum statutory termination entitlements.
Many employers will be surprised to learn that while they may successfully assert just cause at common law, in some cases the employee will still be entitled to statutory minimum notice and severance pay. It is important to know the difference between conduct warranting just cause and misconduct that rules out statutory termination pay. See Oosterbosch v. FAG Aerospace Inc., 2011 CarswellOnt 1702 (Ont. S.C.J.).
