Terminating with just cause is probably the most contentious employment law issue any employer will ever grapple with. On the face of it, it’s a simple enough task. An employee does something very bad, thus providing the just cause for an immediate dismissal. The employer fires. End of story.
Except, of course, it’s not.
A Blueprint for Terminating Employees in Alberta
Calgary employment lawyer William Armstrong laughs when I tell him I want a blueprint for how to terminate with just cause and without fear. “I’m not sure you can ever do it without fear, because someone can always sue,” he cautions. It’s possible, of course, and Alberta’s Employment Standards Code tells you roughly when and how you can do it. But it’s not as easy as American sitcoms might make you think.
“Do I have a case to fire with just cause?” is a question Craig Neuman, an Edmonton employment lawyer, fields almost daily from clients (usually followed by, “And if I don’t, how much is it going to cost me to get rid of this person?”)
Usually, Neuman has to disappoint the caller. “The fundamental, underlying notion about just cause in the legal sense is that it has to be serious, culpable conduct of an employee,” he explains. That means that to be “just,” the cause has to be very serious – a minor performance deficiency does not justify termination, and a major one probably doesn’t either. The employee’s stumble has to be huge. “It has to amount to the employee essentially repudiating their obligations under the employment contract,” Neuman says. The act has to be “culpable,” too, which means “It was an accident!” actually does function as a get-out-of-jail-free card.
So, something seriously bad and done on purpose gets you part of the way there, but nowhere near the finish line. “Even when you are looking at an act that’s serious in itself – such as a theft or a glaring form of insubordination, a physical assault on a manager – then you’re saying, OK, that’s probably just cause, but even in those circumstances, the days are gone when something like that would be immediate just cause,” Neuman says. Armstrong agrees. “There’s a good lawyer’s answer when an employer asks if there’s cause, and that’s, ‘It can be,’ ” he says. “Justifying the summary dismissal of a person without a penny of compensation is a fairly high hurdle to meet.”
OK, we get it, not easy. But possible, right?
“People can do it,” Armstrong says, but it requires a great deal of legwork. If an employer’s lawyer gives just cause a nod, it’s the beginning of operation cover-your-behind. The lawyer will ask for records and documents galore, including statements from other employees or witnesses to the incident. “I want to have the evidence now so that if I do end up in court months or years later, we have the goods,” says Armstrong. (Good to know: under most circumstances, a terminated employee has up to two years to sue.)
When Employees Violate Their Employment Contract
Now here’s the really tough part, and the point which most employers flub. The employee does something purposefully terrible that clearly violates the employment contract. You call the lawyer for advice. The lawyer agrees. And then asks, “When did this happen? And what has the employee been doing since then?”
If the answer to the first question is three days or three weeks ago, and to the second, still working, you’ve probably shot yourself in the foot. “How are you going to explain that to the judge?” asks Armstrong.
But … we had to investigate! Sure, you did, and good for you. But while you’re investigating, make the employee stay home (with pay), because every moment they stay on the job after the “possible just cause” incident weakens your case.
So does – how can we put this – being too nice. “It’s human nature, and I understand it: most employers prefer to use carrots over sticks,” says Neuman. That means that they’d rather reward good performance than actively point out the bad, even when it happens again and again.
When an Employee Is Incompetent
That’s what makes firing with just cause for incompetence nearly impossible. In most situations when an employer wants to get rid of a badly performing employee, the incompetence isn’t a new thing. “They’ve tolerated poor performance sometimes for years, they haven’t effectively dealt with in terms of accumulating and documenting warnings and feedback, and they call me one day and say, ‘I’ve had enough,’ ” says Neuman. “And I have to say, I feel for you, but you haven’t managed the situation properly.” If you want to terminate that employee for poor performance, you’ve got to get to work documenting that.
At that stage, many employers thrown in the just cause towel and choose to ante up however many weeks’ pay the Employment Standards Code prescribes. “It’s not unusual for employers to, when they find out what they need to do, say that they’re not willing to go through that because it can impact their business in a negative way, and it may affect the morale of the people who stay,” says Neuman. “And when you don’t have just cause in the legal sense, you will have to put up some money.”
The moral of the story: if you’re going to fire for incompetence, do it sooner rather than later, and preferably while the employee is on probation, during which time no notice is needed for termination. But tread carefully here: an employee isn’t automatically on probation just because she’s new, or because you think she’s on probation. The probationary period and what it entails needs to be spelled out in the employment contract.
Often, employers will choose to put up some money even if they have just cause. Armstrong has seen more than a few situations where, as he saw it, the employer had just cause and then some. “And I’d look at the facts and what they wanted to do, and ask, ‘Why are you paying this guy a severance?’” he says. The employer’s response, usually, is that they don’t want to air their dirty laundry in public. The lawyer’s response – well, it’s to do what the client wants. In some circumstances, however, a lawyer may advise a client to consider discounting the severance.
It’s a practice that’s not precisely sanctioned by the Employment Standards Code or other legislation – in fact, it’s been squashed by a couple of courts – but it still happens in the oil patch. Armstrong explains, “We present the employee with three letters. Letter one says, you’re fired with cause. Letter two says, without prejudice and notwithstanding that we have cause, we’re giving you this much in severance if you sign letter number three.” Letter number three is the fabled release: the promise the employee won’t sue.
Unless, of course, a few months down the road he’s still unemployed and angry and finds a lawyer with whose help he decides to argue that the release he signed wasn’t valid because … um, let’s not go there. (If you want to go there, check out the position of the Alberta Human Rights Commission on severance agreements.)
The Alberta Human Rights Commission, of course, is the watchdog that ensures just cause or other forms of employment termination don’t violate the Alberta Human Rights Act. Few employers set out to violate the act or discriminate, but there are certain areas that may trip them up. In particular, situations that involve addictions and the extent to which employers need to accommodate employees with addictions may require specialized legal advice before you hand out that pink slip. “It’s an area where with a certain degree of interest we say, talk to a lawyer before you do anything,” Neuman says.
It’s advice to keep in mind the next time you feel the urge to holler, “You’re fired!”