We promoted an “adequate” 50-year-old salesman who had been with us for nine years so we could justify his monthly salary. A few years ago, we gave him additional responsibilities and an increase in salary as a result. He is still doing an adequate job at sales and the new position, but is constantly complaining about the new responsibilities.
He has been disrespectful towards managers and supervisors, and has been blatantly disregarding his hours of work. He is also spending three hours a day surfing the Internet for personal use. We are hoping to sit down with him and set out some improvement strategies. If we give him a set amount of time (say three months) to improve, and he doesn’t, can we fire him for just cause? Failing that, can we let him go without cause? If we let him go without cause, how much severance are we required to give him?
Answer: Incompetence can provide cause for dismissal but not for summary dismissal (dismissal without notice or pay in lieu). The law requires that the employee be advised of performance concerns and be given a reasonable opportunity to correct them. The likely consequences of a failure to improve must also be clarified. In some cases, the employer may have an obligation to assist the employee in reaching the desired standard, particularly where poor performance has gone unchecked for some time.
It is difficult to predict what amount of time would be considered a reasonable period for improvement in the circumstances described. The fact the employee’s barely adequate performance has been accepted and effectively rewarded over a lengthy period might lead a court to conclude a more lengthy period should be given to correct ingrained behavior.
In addition, the situation is complicated by the fact there appears to have been condonation of misconduct of quite a different character as well such as insubordination, theft of time and misuse of employer resources. It is possible that an employer seeking to justify dismissing an employee for cause in such circumstances would face a significant uphill battle if the employer was seen to have acted too quickly.
As to termination of the employee without cause, it is generally the case that a common law employment relationship may be terminated by giving reasonable notice of termination or by paying the employee an amount reflecting the remuneration he could have expected to earn during the period of reasonable notice.
Again, the question of reasonable notice is incapable of exact definition. Factors traditionally considered include the employee’s age, the character of his employment, his length of service and the availability of similar employment given the employee’s experience, training, and qualifications.
Pay provided in lieu of notice should encompass the elements of compensation that the employee would have expected to earn had he worked during the notice period. This would include both salary and projected income from commissions.
Tim Mitchell is an employment lawyer with Laird Armstrong in Calgary. He can be reached at firstname.lastname@example.org or (403) 233-0050.