Just Cause and Performance Management - go2

The message from the courtrooms is crystal clear: When it comes to just cause, performance management programs are critical. Employees must be given clear direction, clear warnings and opportunities to improve; and managers are being held to higher standards of conduct, loyalty, fidelity and honesty.

Shelley-Mae Mitchell, a partner with one of Canada’s largest corporate law firms, Borden Ladner Gervais has been practicing in the employment field for 20 years. Her approach to performance management is straight forward: Proper performance management can avoid lawsuits and significantly reduce risk associated with human rights cases.

Consider the 2006 case of Coupe vs. Malone’s Restaurants Ltd. A manager was dismissed on the basis of alleged breaches of a zero tolerance policy for staff drinking on the job and liquor inventory policies. The outcome? You be the judge when reviewing the following facts:

The zero-tolerance policy was unclear and was not uniformly applied. In fact, the occasional drink at work was common and the manager had on occasion been offered alcohol by a superior.
After being spoken to the manager began to follow the inventory policy.

The courts held no cause for dismissal. It was determined that the employee did not breach the zero-tolerance policy because the policy was not clearly defined and not uniformly applied. As for the inventory, the employee had followed the policy after his last warning therefore this could not be relied upon as cause for dismissal. Perhaps most key is the fact that the employee had not been given adequate warning regarding any breaches, misconduct, or performance problems. Any warnings were not clear and unequivocal, and did not indicate that the employee’s job was at risk.

Performance management and the courts

Simply put, performance management programs are necessary because, generally, employees cannot be terminated for cause without one. Performance management encompasses more than a once-per-year evaluation. It is a comprehensive, ongoing process of communicating expectations, monitoring performance (good and bad), and providing both formal and informal feedback.

Up-to-date, well-written job descriptions are the basis of effective performance management. Employees and managers work together to prepare a plan that sets out goals and accomplishments based on the requirements of the job. Feedback is provided throughout the year and is regularly incorporated into the plan.

Effective performance management plans avoid the element of surprise during reviews and:

Measure performance individually based on job description, goals, and objectives.
Are honest and constructive, always setting out areas where improvement is needed.
Ensure proper training and supervision for employees.
Provide constant feedback verbally and in writing, whether it is for poor performance or good performance.

Addressing problem performance

If performance becomes a problem an employee must be told so and put on a performance improvement plan (PIP). A PIP identifies areas of required improvement and assigns a reasonable time for correction. The plan is a necessary tool that:

Determines the specific steps to be taken to improve performance.
Offers and extends necessary training to improve performance
Involves supervisor support for required assistance and feedback during the improvement process.
Provides a final warning if there is no improvement in performance.

A termination for cause is more likely to be upheld by the courts if a well prepared and documented performance improvement plan was implemented and exhausted.

The test for just cause

Determining whether a termination for cause was justified is based on a contextual approach: the courts will not consider the conduct in isolation but will consider several factors to determine whether the incident or conduct complained of justifies cause. Three main factors include conduct and circumstances, length of service, and character of the employment.

Context and circumstances of the misconduct

In determining the context of the misconduct the courts will consider several factors, including:

The type and severity of the misconduct, i.e. dishonesty vs. incompetence.
The duration or frequency of the incidents of misconduct.
Whether or not the employee has been warned about the inappropriate conduct.
A first incident vs. a series of repeated incidents.

Length of service

In determining a ruling the court will consider the employee’s length of service. Isolated incidents of misjudgment by long-term employees are less likely to be found to justify cause for dismissal than a short term employee who has participated in flagrant ongoing conduct.

For instance, the courts have indicated that an isolated incident of poor judgment by a long service employee may not be cause for dismissal. In contrast, a short term employee being dishonest or defrauding the company may justify dismissal.

Character of employment

The position held by the employee in question may or may not support dismissal for cause depending on the circumstances.

Cause is more likely to be found for a management employee who flagrantly breaches a policy which he or she knew or should have known about. Dismissal for cause is less likely to be upheld for a lower level employee who may not have any knowledge of the policy and has not been warned about the consequence of non-compliance with the policy requirement.

Beyond the legal issues, a performance management program is an extremely effective way to guide and assess the contribution of every employee in an organization. By engaging employees in their own success the process is a proven tool for improving employee performance and developing staff who serve you — and guests — with loyalty and dedication.