Canadian employers don’t always get to call all the legal shots. Despite workplace laws favouring their legal position, errors made in managing their human resources can put their company’s name on the front page of my next statement of claim.
Here are my five favourite employment law mistakes that a company can make, followed in my next column by the top five mistakes employees can make at work:
• Bad faith dismissal: Since 1997 employers have had to play nice when firing an employee. In that year, the Supreme Court ruled that the manner in which an employee is terminated can attract additional liability. On average, employers have been forced to pay upwards of three additional months of salary, where the employee proves that pre- or post-termination conduct was unfair, insensitive, humiliating or unreasonable. With such a broad panoply of behaviour potentially meeting this threshold, bad faith claims appear in over half of the workplace lawsuits that I manage. Employers without experience in handling terminations should seek advice or risk paying damages in excess of the true value of the claim.
• Resignations: The law of resignation requires clear and unequivocal actions or statements demonstrating an intention to voluntarily leave. In one recent B.C. case, the judge noted that employers have an onus not to pounce on an intemperate utterance of an emotional employee. By advising the employee that it deemed him or her to have resigned, it had “blundered” — effectively terminating her instead. If you want to ensure that an employee has actually resigned, ask her to take her time and confirm her intention in writing.
• Paying only the statutory minimum: Employment standards legislation across Canada provides the minimum amount of notice or pay terminated employees are to receive. Aside from some other negotiated amount, most employees are entitled to the more generous “common law” severance payments imposed by the courts. As judges have historically agreed, employers who are only prepared to pay a fired employee the minimum amount must also be prepared to hear from his or her lawyer.
• Failing to conduct an investigation: If you want to rely on misconduct as grounds for dismissal, allegations must be thoroughly investigated by a trained and neutral party. The allegations should be put to the employee, who should be given the benefit of time and an opportunity to respond. In one notorious case where the outcome of an investigation was decided in advance, not only was the employee awarded wrongful dismissal damages and his legal costs, but the employer was forced to pay additional damages for the humiliating manner in which the dismissal was executed. While these guidelines appear simple, the courts have increasingly chastised bogus or perfunctory investigations.
• Not properly documenting discipline: If you want to rely on misconduct as grounds for dismissal, demotion or even a negative performance review, Canadian courts require that progressive or corrective means should be used first. Letters should be sent that clearly identify areas of concern, offer suggestions for recovery and, not least, set out the consequences of an inability to improve.
