When performance is a problem

When it comes to an underperforming employee, employers should carefully assess what is behind any performance deficiencies before considering the termination of employment for just cause

When performance is a problem

Managing an underperforming employee, particularly a professional or long-service one, is a daunting and frustrating task for all HR practitioners. By the time a file hits my desk, employers are typically at the end of their rope and want to know if they “have enough” to sustain a termination for cause based on poor performance.

All employers should have a robust, consistent and regular performance management or coaching process where employees are formally and informally “measured” regularly against the requirements of their position. After all, you can’t manage what you can’t measure. A performance management process will enable employers to determine whether in fact an employee has performance deficiencies and, if so, the best approach to correct those deficiencies.

All employment relationships are contractual, including both express and implied terms, based on either a collective agreement or an individual contract of employment. In a unionized setting, management cannot terminate an employee except for “just cause” ( just cause protection also applies to certain non-unionized, federally regulated employees under the Canada Labour Code).

In a non-union setting, management can terminate an employee without just cause, or for any reason, as long as it does not offend human rights principles. However, any such termination will be subject to the contractual and implied obligation to provide reasonable notice of termination.

Management in the non-union setting can also terminate for just cause, meaning no notice is required; however, such cases are extremely difficult to sustain. Management will effectively have to demonstrate that the employee’s conduct amounts to a unilateral repudiation of the employment relationship, relieving the employer of the obligation to provide reasonable notice.

Defining the standard

In both settings, for an employer to establish just cause to terminate an employee for performance problems, courts and arbitrators have held that an employer must be able to show through a well-documented process that:

  •  the employer clearly and regularly communicated to the employee the expectations and objective standards required of the position
  •  the employer provided the employee with a reasonable opportunity to meet these standards, including time, additional training and counselling
  • the employee was not willing or capable of meeting these standards
  • the employee was warned that failure to achieve these standards could result in termination of employment. In order to assess whether a termination may be sustainable, the employer should consider what is behind an employee’s performance problems. Performance problems may be caused by both “culpable” and “non-culpable” conduct, meaning conduct within the employee’s control (such as laziness or carelessness) or outside of the employee’s control (such as incompetence).

In general, culpable conduct may be “corrected” through progressive discipline (in accordance with the employment agreement) while non-culpable conduct is more likely to be corrected through increased training and supervision. Most performance problems are the result of lack of training, supervision or motivation, and progressive discipline will not be appropriate.

Both progressive discipline and performance management processes are intended to be corrective. It is a common mistake for employers to either mix up these approaches or dispense with them altogether and proceed to termination.

For this reason, employers should consider what is behind apparent performance problems before deciding on the best course of corrective action.

Common performance ‘problems’

Employers should consider what performance deficiencies have been identified. Some common performance “problems” include:

  • a technically skilled employee promoted into a management role who lacks the soft or people skills to manage a team effectively and has not been appropriately trained
  • a new supervisor identifying performance deficiencies in their team
  • a long-service employee who loses motivation or “checked out” of their role
  • a manager who performs their role adequately but misconducts themselves on other grounds, such as engaging in harassing or inappropriate conduct in the workplace.

Having a consistent performance management process will allow management to determine if there is a performance deficiency, what is potentially behind the deficiency, what corrective measures have been taken and the total work history of the affected employee.

These assessments and documentation are time-consuming and labour-intensive, but they will go a long way toward managing the situation of an underperforming employee, managing a workplace more generally and, ultimately, if required, supporting any decision to terminate an employee for cause based on poor performance. 

Jessica Kearsey is a partner in the labour and employment group at Deloitte Legal Canada in Toronto. She can be reached at (416) 775-2302 or jkearsey@deloitte.ca.


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