Dismissing (aka Firing) an Employee for Cause is Harder than Often Thought
This blog post is not legal advice and is for general informational purposes only. Always speak with a lawyer before acting on any of the information contained herein.
Sometimes the misconduct, incompetence, or disobedience of an employee entitles an employer to fire the offending employee without providing a notice period or wages in lieu of notice. This is called dismissal for cause (also known as summary dismissal or just cause dismissal). Before dismissing an employee for cause, you should seriously consider talking to a lawyer experienced in employment law. Many employers are surprised to find that even what may seem like egregious misconduct is often not enough to dismiss an employee for cause. If an argument can be made that the employer was not justified in dismissing the employee for cause, there is a good chance that the employer will be sued by the employee for wrongful dismissal. Even if the employer is ultimately successful at trial, litigation is very expensive, so steps should be taken to reduce the likelihood of a wrongful dismissal lawsuit in the first place. An experienced employment lawyer can assist with this. Suffice it to say, the process of dismissing an employee for cause is actually much more involved than often assumed by employers.
This blog post is not a guide on how to dismiss an employee for cause. Rather, I hope to demonstrate the difficulties faced by employers when dismissing an employee for cause by summarizing two recent cases.
Take the case of Henry v Foxco. In this case, the employee had been told on a number of occasions to increase the speed of his work. After being told once again to hurry up, the employee overreacted and began yelling and swearing at his supervisor. Other employees testified that the supervisor tried to calm the offending employee down, but his efforts failed. During the heated exchange, the employee invited the supervisor to fire him five or six times, and finally the supervisor obliged him.
One may have expected that the repeated incompetence (the slow work), heated disobedience in the presence of other employees, and invitations to fire would have been sufficient to dismiss the employee for cause, but that was not the case. The court found that the employee’s “actions [did] not constitute misconduct amounting to a fundamental breach of the employment contract.” As a result, the court found that the employee’s summary dismissal was not justified and that he was instead entitled to monetary compensation (i.e. wages in lieu of his contractual notice period). In other words, the employee was wrongfully dismissed.
Another surprising case where an employer was not justified in summarily dismissing its employee is Bowey v Baker Hughes Canada Co. In this case, the employer dismissed the employee, Mr. Bowey, without severance and without notice because Mr. Bowey had harassed employees under his supervision. Over the course of the Mr. Bowey’s employment, two formal complaints had been made about him. In the first complaint, it was reported that Mr. Bowey squeezed and pinched the inside of another employee’s thighs which caused bruising, gave an employee “wet willies”, and rubbed his saliva across another employee’s lips while that employee napped. Mr. Bowey also grabbed an employee’s buttocks, tried to tickle an employee’s genitals, and provided numerous purple nurples (nipple twisting). Mr. Bowey was subsequently warned by his supervisor that his behaviour was inappropriate and must stop. Mr. Bowey assured his supervisor that there would be no repetition of the behaviour.
Two years later, the second formal complaint was made regarding Mr. Bowey’s misconduct. Mr. Bowey began verballing harassing a new employee, calling him “Fat Bastard.” Mr. Bowey made fun of the new employee’s weight on a number of other occasions. After reviewing the incidents, Mr. Bowey’s employment was terminated without notice or severance pay, presumably because the employer believed it to be justified in dismissing Mr. Bowey for cause. The employer was wrong.
The Court found that Mr. Bowey’s conduct was not such that warranted dismissal for cause. As a result, Mr. Bowey’s was wrongfully dismissed and entitled to a 10 month notice period or wages in lieu of notice.
As these two cases demonstrate, when it comes to termination of employment, employment law is titled in favour of the employee. Employers should be cautious before dismissing employees for cause. Whether an employer is justified in dismissing an employee or not, there is always the risk that the employee will sue the employer for wrongful dismissal. Nevertheless, the likelihood of costly wrongful dismissal litigation occurring can be reduced if you carefully manage the termination of employees. If you would like to know more, contact one of the lawyers at Segev LLP and we will be happy to advise you regarding dismissal of employees and any other employment law related issues.