Staff need time to job hunt, and then there’s insubordination
An employer has two options when terminating an employee without cause: give the employee working notice of termination or provide pay in lieu of notice.
Reasons employers may decide against working notice include concerns about the terminated employee’s access to sensitive information, the effect upon workplace morale and possible sabotage of client relations.
This article explores two other reasons. The first is that the employer must allow the employee a reasonable opportunity, during working hours, to search for new employment. The second is that the employer may not be able to terminate the employee for cause later.
Typical concerns
Canadian legislation uniformly requires employers to provide employees with notice of termination in the absence of just cause. What some employers (and employees, for that matter) do not realize is that the legislated requirements for notice are supplemented by the common law, which can significantly increase the amount of notice required.
Whatever the appropriate amount of notice in a given situation, the employer has the option of providing working notice or pay in lieu of notice.
Where notice is given, the employee is required to continue to work during normal hours and perform his duties throughout the notice period. If the employer chooses to provide pay in lieu of notice, the employee continues to receive wages and benefits for the same notice period, but is not required to work during that time.
There are pros and cons to either option. The biggest downside to pay in lieu of notice is that the employer pays the employee not to work.
Conversely, there are real and potential disadvantages to continuing to employ someone during the notice period. His presence at work, particularly if he is bitter about the termination, may hurt employee morale. Employees who are especially vindictive may try to sabotage the company in any number of ways.
These concerns are even more compelling in the case of higher-level employees who may have access to sensitive information or may regularly interact with clients.
Because of this, employers are often reluctant to offer working notice. Paying someone not to work is often perceived to be a justifiable expense, or at least a necessary evil, in order to alleviate these concerns.
Time to job hunt
If the employee is given working notice of termination, the requirement to work regular hours and perform regular duties is modified somewhat during the notice period.
The employer must give the employee a “reasonable” opportunity to seek new employment, including during working hours. This could include allowing the employee to make telephone calls, send faxes and attend job interviews. Unfortunately, this requirement has received very little judicial consideration.
The use of the term “reasonable” suggests each situation must be considered based on its specific context, much like the concept of “reasonable notice” itself. This was confirmed by the New Brunswick Court of Appeal in Bramble v. Medis Health and Pharmaceutical Services Inc. (1999), in which the court noted, “The ultimate issue will always be: did the employer provide the employee a reasonable opportunity to find alternate employment during the working notice period?” However, very little in the way of guidance has been offered by the courts.
In Bramble, the trial judge found that the plaintiffs could not actively seek work during the notice period because “they all continued to work diligently.” What is interesting is that the trial judge does not suggest the employees in question were prevented from making efforts to seek new employment, only that they continued to work diligently. As a result, the case confirms the general theory that an employer must provide a reasonable opportunity to seek new employment. It does not provide any specific insight into what is or is not reasonable.
In a 1987 decision, Mr. Justice Barr of the Supreme Court of Ontario addressed the situation of a Canadian employee who was assigned to a position in Nigeria. In that case, Kelly v. Monenco Consultants Ltd., Barr held that the employee “had no practical opportunity to seek out other employment until he had completed his commitment in Nigeria.” Although Kelly had been given working notice, the notice was illusory and meaningless, because he could not look for work. He was awarded further pay in lieu of notice.
The situation in Kelly was an unusual one. As a result, the decision does not provide meaningful guidance to employers seeking to give an employee working notice of termination (unless the employee happens to be stationed out of the country). Unfortunately, there is little other judicial commentary regarding how accommodating an employer must be during the notice period.
Dismissed for the second time
Another concern arises out of the recent decision of Ontario Superior Court Justice James Donnelly in Elg v. Stirling Doors. The employer chose to provide Elg, a labourer, with working notice of termination. The notice was provided on Dec. 10, 1999, and Elg’s last day of employment was to be Feb. 4, 2000.
On Dec. 13, Elg did very little work and much of what she did was wrong. She also demanded immediate payment for her banked overtime. The next day, Elg refused to sort her work product by length, as was the normal procedure. Rather, she placed it in a pile, disrupting workflow.
An “unpleasant exchange” took place between Elg and her employer, Weishar, during which Elg told Weishar that the eight-week notice period would be “eight weeks of hell” and that there was nothing he could do about it.
She went on to state that Weishar is “the kind of employer that employees shot.” In response, Weishar reported Elg’s comments to the police and terminated her employment for wilful misconduct.
The employer acted in accordance with the Ontario Employment Standards Act by providing Elg with notice of the termination. The employee responded to this lawful action by intentionally performing her work improperly, then threatening to make her boss’ life hell for the duration of her notice period and, arguably, threatening to shoot him. The words “just cause” do not seem inaccurate in describing this situation.
Elg sued for wrongful dismissal. The matter went to trial and was heard by Donnelly who attacked the concept of working notice, stating that “working notice is an institution almost invariably predestined to fail.” He went on to blame the employer, writing that the “consequence of his decision (to provide Ms. Elg with notice of termination) was predictable,” and that “only the precise form of that consequence was uncertain.”
Further, Donnelly wrote that “Mr. Weishar created the environment” and that he “will not now be heard to invoke that readily foreseeable confrontation made possible by his action as a basis for a claim that Mrs. Elg was dismissed for cause on Dec. 14.”
The theory behind Donnelly’s judgment seems to be that the employer, by choosing to provide working notice instead of pay in lieu thereof, was to blame for Elg’s inappropriate and disturbing response. There is nothing in Donnelly’s reasons, however, to suggest the case before him was unusual in a way that would have made the provision of working notice inappropriate. There is certainly nothing to support a finding that by providing Elg with working notice, her employer created a hostile environment. And there is nothing to suggest the employer should have known Elg would respond inappropriately.
As far as one can tell from the wording of the decision, Weishar made a decision to terminate Elg, and did so by providing her with working notice. He should not be criticized or penalized for doing so. Although Donnelly may believe working notice is doomed to fail, the concept is hundreds of years old and is a hallmark of Canada’s system of employment law. Perhaps there were facts that took this case out of the ordinary, but those facts do not seem to be mentioned in the reasons.
Donnelly found that Elg had already been dismissed by Dec. 14, and therefore could not be dismissed for cause on that date. Elg was awarded eight months’ notice.
This seems to contradict section 11(2) of Regulation 327/95 under the Ontario Employment Standards Act, which provides that the requirement to provide notice of termination does not apply where the employee, during the period of notice of termination, is guilty of willful misconduct or disobedience or willful neglect of duty that has not been condoned.
The decision in Elg has not yet been judicially considered. It is therefore uncertain how it will be treated, and whether it is a concern for employers or merely an anomaly. It is likely the latter. However, it is certainly something that should be kept in mind when a decision is being made as to what kind of notice to provide to a soon-to-be-terminated employee.
Stuart E. Rudner practises civil litigation and employment law in Toronto with Miller Thomson LLP. For more information contact (416) 595-8672, [email protected] or www.millerthomson.com.
Reasons employers may decide against working notice include concerns about the terminated employee’s access to sensitive information, the effect upon workplace morale and possible sabotage of client relations.
This article explores two other reasons. The first is that the employer must allow the employee a reasonable opportunity, during working hours, to search for new employment. The second is that the employer may not be able to terminate the employee for cause later.
Typical concerns
Canadian legislation uniformly requires employers to provide employees with notice of termination in the absence of just cause. What some employers (and employees, for that matter) do not realize is that the legislated requirements for notice are supplemented by the common law, which can significantly increase the amount of notice required.
Whatever the appropriate amount of notice in a given situation, the employer has the option of providing working notice or pay in lieu of notice.
Where notice is given, the employee is required to continue to work during normal hours and perform his duties throughout the notice period. If the employer chooses to provide pay in lieu of notice, the employee continues to receive wages and benefits for the same notice period, but is not required to work during that time.
There are pros and cons to either option. The biggest downside to pay in lieu of notice is that the employer pays the employee not to work.
Conversely, there are real and potential disadvantages to continuing to employ someone during the notice period. His presence at work, particularly if he is bitter about the termination, may hurt employee morale. Employees who are especially vindictive may try to sabotage the company in any number of ways.
These concerns are even more compelling in the case of higher-level employees who may have access to sensitive information or may regularly interact with clients.
Because of this, employers are often reluctant to offer working notice. Paying someone not to work is often perceived to be a justifiable expense, or at least a necessary evil, in order to alleviate these concerns.
Time to job hunt
If the employee is given working notice of termination, the requirement to work regular hours and perform regular duties is modified somewhat during the notice period.
The employer must give the employee a “reasonable” opportunity to seek new employment, including during working hours. This could include allowing the employee to make telephone calls, send faxes and attend job interviews. Unfortunately, this requirement has received very little judicial consideration.
The use of the term “reasonable” suggests each situation must be considered based on its specific context, much like the concept of “reasonable notice” itself. This was confirmed by the New Brunswick Court of Appeal in Bramble v. Medis Health and Pharmaceutical Services Inc. (1999), in which the court noted, “The ultimate issue will always be: did the employer provide the employee a reasonable opportunity to find alternate employment during the working notice period?” However, very little in the way of guidance has been offered by the courts.
In Bramble, the trial judge found that the plaintiffs could not actively seek work during the notice period because “they all continued to work diligently.” What is interesting is that the trial judge does not suggest the employees in question were prevented from making efforts to seek new employment, only that they continued to work diligently. As a result, the case confirms the general theory that an employer must provide a reasonable opportunity to seek new employment. It does not provide any specific insight into what is or is not reasonable.
In a 1987 decision, Mr. Justice Barr of the Supreme Court of Ontario addressed the situation of a Canadian employee who was assigned to a position in Nigeria. In that case, Kelly v. Monenco Consultants Ltd., Barr held that the employee “had no practical opportunity to seek out other employment until he had completed his commitment in Nigeria.” Although Kelly had been given working notice, the notice was illusory and meaningless, because he could not look for work. He was awarded further pay in lieu of notice.
The situation in Kelly was an unusual one. As a result, the decision does not provide meaningful guidance to employers seeking to give an employee working notice of termination (unless the employee happens to be stationed out of the country). Unfortunately, there is little other judicial commentary regarding how accommodating an employer must be during the notice period.
Dismissed for the second time
Another concern arises out of the recent decision of Ontario Superior Court Justice James Donnelly in Elg v. Stirling Doors. The employer chose to provide Elg, a labourer, with working notice of termination. The notice was provided on Dec. 10, 1999, and Elg’s last day of employment was to be Feb. 4, 2000.
On Dec. 13, Elg did very little work and much of what she did was wrong. She also demanded immediate payment for her banked overtime. The next day, Elg refused to sort her work product by length, as was the normal procedure. Rather, she placed it in a pile, disrupting workflow.
An “unpleasant exchange” took place between Elg and her employer, Weishar, during which Elg told Weishar that the eight-week notice period would be “eight weeks of hell” and that there was nothing he could do about it.
She went on to state that Weishar is “the kind of employer that employees shot.” In response, Weishar reported Elg’s comments to the police and terminated her employment for wilful misconduct.
The employer acted in accordance with the Ontario Employment Standards Act by providing Elg with notice of the termination. The employee responded to this lawful action by intentionally performing her work improperly, then threatening to make her boss’ life hell for the duration of her notice period and, arguably, threatening to shoot him. The words “just cause” do not seem inaccurate in describing this situation.
Elg sued for wrongful dismissal. The matter went to trial and was heard by Donnelly who attacked the concept of working notice, stating that “working notice is an institution almost invariably predestined to fail.” He went on to blame the employer, writing that the “consequence of his decision (to provide Ms. Elg with notice of termination) was predictable,” and that “only the precise form of that consequence was uncertain.”
Further, Donnelly wrote that “Mr. Weishar created the environment” and that he “will not now be heard to invoke that readily foreseeable confrontation made possible by his action as a basis for a claim that Mrs. Elg was dismissed for cause on Dec. 14.”
The theory behind Donnelly’s judgment seems to be that the employer, by choosing to provide working notice instead of pay in lieu thereof, was to blame for Elg’s inappropriate and disturbing response. There is nothing in Donnelly’s reasons, however, to suggest the case before him was unusual in a way that would have made the provision of working notice inappropriate. There is certainly nothing to support a finding that by providing Elg with working notice, her employer created a hostile environment. And there is nothing to suggest the employer should have known Elg would respond inappropriately.
As far as one can tell from the wording of the decision, Weishar made a decision to terminate Elg, and did so by providing her with working notice. He should not be criticized or penalized for doing so. Although Donnelly may believe working notice is doomed to fail, the concept is hundreds of years old and is a hallmark of Canada’s system of employment law. Perhaps there were facts that took this case out of the ordinary, but those facts do not seem to be mentioned in the reasons.
Donnelly found that Elg had already been dismissed by Dec. 14, and therefore could not be dismissed for cause on that date. Elg was awarded eight months’ notice.
This seems to contradict section 11(2) of Regulation 327/95 under the Ontario Employment Standards Act, which provides that the requirement to provide notice of termination does not apply where the employee, during the period of notice of termination, is guilty of willful misconduct or disobedience or willful neglect of duty that has not been condoned.
The decision in Elg has not yet been judicially considered. It is therefore uncertain how it will be treated, and whether it is a concern for employers or merely an anomaly. It is likely the latter. However, it is certainly something that should be kept in mind when a decision is being made as to what kind of notice to provide to a soon-to-be-terminated employee.
Stuart E. Rudner practises civil litigation and employment law in Toronto with Miller Thomson LLP. For more information contact (416) 595-8672, [email protected] or www.millerthomson.com.
