What should employers do when an employee engages in misconduct that can damage the reputation of the organization?
A few weeks ago, the NHL announced that long-time referee Tim Peel’s career had come to a premature end after he was heard saying that he “wanted” to give the Nashville Predators a penalty. His comments were made to his referee partner but were picked up on his TV microphone and immediately generated public scrutiny and a backlash that the NHL wanted no part of.
As a hockey fan, the only aspect of this story that surprised me was that Peel allowed his comments to be picked up by the microphone. It is no secret that referees at all levels routinely make “makeup calls”; however, it is not something that any league, particularly the NHL, officially acknowledges or sanctions.
Although Peel was scheduled to retire at the end of this season, the NHL immediately announced that he would no longer be working as a referee. Did the NHL have just cause to dismiss Peel? We will probably never know for sure, as there was no suggestion that he was dismissed, with or without cause; he may well have been “allowed” to retire.
The scenario provides a good opportunity to discuss what employers can and should do in circumstances like this, where an employee engages in misconduct that can damage the reputation of the organization. When these situations arise, we are often contacted by the employer and asked, “Can we fire him?”
The simple answer is almost always positive: employers can generally dismiss employees at any time. The question is not if, but how: specifically, can the employer dismiss the employee for just cause?
We have two types of dismissals in Canada: with or without cause. The vast majority of dismissals are without cause; those include reorganizations, downsizings, and scenarios where the employee is just not working out or the employer has found someone better. Outside of unionized employees, an employer can let an employee go without a reason so long as they provide appropriate notice or severance.
To dismiss an employee for cause, the employer must establish 1) that the employee engaged in misconduct and 2) that the employment relationship has been irreparably damaged, bearing all relevant circumstances in mind. Those circumstances include things such as length of service, prior discipline, and the employee’s response when confronted. This is discussed in excruciating detail in my book, You’re Fired! Just Cause for Dismissal in Canada, which includes a review of the law as it applies to various forms of misconduct and a database of case summaries.
One of the key points of the book, and a point we make to all of our clients, is that before a dismissal for cause, the employer must conduct a fair investigation which will include confronting the individual and assessing their response. Dishonesty or refusal to accept responsibility for their actions will strengthen the argument that the employment relationship could not continue. A failure to carry out a fair investigation before an employee is dismissed for cause can expose the employer to wrongful dismissal, bad faith and punitive damages, in addition to legal costs.
Of course, many organizations faced with a scenario like the one facing the NHL simply make the pragmatic decision to terminate the relationship immediately. Rather than put the employee on administrative leave and engage in an investigation followed by an assessment of whether they have just cause or not, an organization facing a public relations challenge can send a strong message by immediately announcing that the employee will no longer be part of the organization. That might mean paying them out rather than considering a summary dismissal but, in many cases, that is the most pragmatic approach.
So what should an employer do in similar circumstances? It has a few options (assuming the employee is not covered by a collective agreement):
- Engage in an investigation and consider dismissal for cause or some other form of discipline
- Dismiss without cause and provide pay in lieu of notice
- Impose progressive discipline
- Dismiss for cause without an investigation and risk a wrongful dismissal claim and additional damages for failure to act in good faith.
The best approach will depend upon many factors aside from the legal ones, including internal and external messaging and public relations considerations. But one point that is important to remember is that you don’t necessarily need “just cause” to dismiss an employee; as the old joke goes, sometimes it makes sense to let someone go “just cause.”