When is summary dismissal allowed?

Can an employee with performance issues be fired without notice?

Stuart Rudner
Question: An employee has been having performance issues for some time and we're thinking of firing him but are unclear on how bad things would have to be to not require notice. At what point would summary dismissal without notice be permissable?

Answer: If dismissal for cause is considered by many to be near impossible, then dismissal for cause based upon poor performance might be viewed as a lost cause. It is arguably the most difficult ground for summary dismissal an employer can seek to establish. The courts are reluctant to allow employers to summarily end the relationship without any notice or pay in lieu. As a result, the burden upon employers who seek to establish just cause can be an onerous one. The courts will consider the entirety of the employment relationship when deciding whether it has been met.

Many Canadian judges have adopted the approach used by labour arbitrators in this context, who have very specific requirements for finding just cause for dismissal based on poor performance. Generally, employers must show:
• the level of performance required;
• the employee was advised of the applicable standard;
• it gave appropriate instruction and supervision to assist the employee in reaching the standard;
• the employee did not reach the standard; and
• the employee was warned that a failure to meet the standard would lead to the termination of her employment.

In other words, it is not sufficient to simply tell an employee her performance is not up to standards and they better “shape up or ship out.” Rather, employees must be explicitly told of the standard of performance that is expected of them. They must also be provided with a reasonable amount of time to bring their performance up to that standard. It is advisable the employee be advised of the timeframe within which she is expected to improve.

As appropriate, the employer must work with the employee to help her reach the required standard. This should involve regular meetings to discuss the employee’s progress, or lack thereof. In many cases, the employer should provide coaching to the employee, which could involve observing her performance and offering ­suggestions for improvement. Alternatively, the employer might want to place the subject employee with someone more senior who can demonstrate the type of performance that is expected.

In short, the key is to make sure the employee is aware her performance is not up to the company’s expectations, and her failure to improve will result in termination. Then, the employer must provide the employee with a reasonable opportunity to improve.

It goes without saying that dismissing an employee for cause is inherently risky for an employer. Basing that dismissal upon performance issues is even riskier. However, following the steps outlined above should help minimize that risk. Alternatively, you can simply bite the bullet and provide notice of termination or pay in lieu. In appropriate circumstances, working notice may be the course of action with the least risk.

Stuart Rudner is a partner who practices commercial litigation and employment law with Miller ­Thomson LLP’s Toronto office. He can be reached at (416) 595-8672 or srudner@millerthomson.com.

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