Store could fire employee after failed improvement plans, but poor performance in itself wasn’t sufficient cause
When a salesperson fails to meet sales expectations, the employer is likely to do something about it. Terminating a salesperson for underperforming is the course of action a British Columbia Best Buy took, but the store discovered it wasn’t as simple as simply cutting ties.
Bijan Arasteh came to Canada in 1999 from Iran, where he had been a mechanical engineer. However, his qualifications were not recognized in Canada, so Arasteh took a job at a Future Shop retail store in West Vancouver, where he worked his way over a few years to a position as a product expert for large appliances.
Future Shop encouraged its sales staff to sell their product service plan (PSP) with products, which was an extended warranty program. PSPs were an important element of sales and the company expected its salespeople to sell a certain number of them. Arasteh’s PSP sales were low and he admittedly did not like selling them.
Improvement needed in sales
In 2003, Future Shop put Arasteh on a performance enhancement plan (PEP) that specified he needed to improve his PSP sales numbers. When he didn’t improve, his was given a written warning in February 2004 that stated if he didn’t meet the target of selling PSPs on six per cent of his sales, he would be terminated for poor performance.
Arasteh expressed his displeasure about selling PSPs to the HR department and asked if he could transfer to another department, which the company denied until his performance was satisfactory in his existing department. Soon, his sales improved and he became successful at selling PSPs, to the point where he was awarded Prestige status in the 2005 President’s Club by ranking in the top group of sales staff in three out of four quarters.
Arasteh transferred to the home theatre department in March 2006. Unbeknownst to his employer, he suffered from medically diagnosed mild depression and he thought the change would help him. He was also going through a divorce. His sales in his new department started off low but improved by his second month so he was in the top 40 per cent of sales and top 10 per cent of PSP sales. Over the next couple of months his sales fluctuated and his PSP sales dropped. In May his department manager told him he would have to start another PEP program with the goal of increasing his overall numbers. The manager was concerned Arasteh’s PSP sales, though stronger, could drop again given his weakness in that area in his previous department.
Targeted areas didn’t improve
By the end of July 2006, Arasteh had improved his overall and PSP sales but his numbers in clearance and accessories was near the bottom of the staff. He was given a formal letter that his performance level was still below expectations and more PEP sessions followed along with a list of tasks to complete. However, he didn’t complete all the tasks and his targeted sales areas didn’t improve, though his overall sales remained at a fairly high level.
After a 30-day final performance warning demanding improvement failed to see results, Future Shop terminated Arasteh’s employment on Dec. 1. Arasteh was angered and told management about his depression and the medications he was taking for it. He had in fact been told by his doctor to go on sick leave but wanted to work during the lucrative holiday season.
Arasteh sued for wrongful dismissal, claiming the expectations were too high and Future Shop’s standards were unrealistic. He said demands kept changing and he was expected to maintain higher than normal sales in all categories, which was unfair. He claimed he was still achieving good sales numbers and making money for Future Shop, so there were no proper grounds for termination.
The court found Arasteh’s reluctance at times to sell PSPs and improved his numbers in certain areas could be attributed in part by his mental health. However, Future Shop was not aware of his condition and couldn’t be faulted for not accommodating it. From its perspective, Arasteh was not doing a good job and after several PEPs, it felt he wasn’t going to meet its expectations.
Notice required for termination for poor performance
However, since Arasteh was still achieving good sales numbers in some areas, his failure to meet expectations in others was not sufficient for cause, the court found. Future Shop was still free to terminate his employment if it wasn’t happy with him, but it had to provide reasonable notice. The court awarded Arasteh notice equal to that stipulated in the company’s associate handbook, which followed provincial employment standards legislation and provided six weeks’ pay for his six years of service.
“The company had the right to decide they did not want to continue working with (Arasteh) but they should have simply offered him notice or payment in lieu and save him and themselves the aggravation of creating such a difficult record,” said the court. See Arasteh v. Best Buy Canada Ltd., 2009 CarswellBC 3747 (B.C. Prov. Ct.).