I have received quite a few calls lately from people who have been fired and who want to know if they can successfully sue their previous employer, or who have been offered a severance package and want to know if they are entitled to more.
The answers to these questions require a careful examination of each particular case, and can be very difficult to determine.
The following article sets out the law regarding wrongful dismissal in a general manner, and it is meant to highlight the uncertainty of the law in this area and the consequent advisability of properly drafted employment contract.
Note this article is far from exhaustive and is for information purposes only. This area of law can be complex. Legal advice should be sought if you have an employment law issue.
An employer dismisses an employee wrongfully when the employee is dismissed without cause and without being given proper notice or pay instead of notice. What constitutes just cause? And how much notice or severance is required?
An employer has just cause to dismiss an employee where the employee does something that significantly breaches the terms of her employment. Examples of behavior that would likely justify immediate dismissal in most circumstances include theft, misrepresentations, assault, verbal abuse, disobedience, sexual harassment and competition with the employer’s business. These examples seem clear, particularly where behavior is criminal.
However, employers more often want to dismiss for other reasons, such as repeated incompetence or poor performance. This can be difficult. In determining just cause, courts apply a proportionality test with the result that acts that justify dismissing one employee will not necessarily justify dismissing another.
For instance, one act of misconduct or incompetence, unless severe, will not likely justify dismissing a senior employee in a high-level position who has had good performance reviews, but it might justify dismissing a less senior employee.
Another difficulty with just cause is that employers often fail to properly document or address an employee’s failings, leaving the employer in a less then desirable position if the matter goes to court.
Where an employer does not have just cause, notice must be given or severance must be paid (unless the employee has been employed for less than three months, in which case no notice or severance is required).
The amount of notice or pay an employee is entitled to can be hard to determine. The Employment Standards Code sets out minimum standards, but courts will award more in certain circumstances. Courts look at a variety of factors, including the character of the employment, the length of service by the employee, the employee’s age and the availability of replacement work.
For example, where an employee is senior, is in a small and specialized field, has worked for the employer for an extended period and is not likely to find similar employment, the notice period or amount of severance will be greater than where an employee is young, not in a high-level position or specialized field, has not worked for the employer for an extended period and can find similar employment.
Clearly there can be a substantial amount of uncertainty for both employers and employees regarding dismissal. The best way to deal with this uncertainty is an employment contract which, among other things, sets out what acts or omissions give the employer just cause and sets severance/notice periods.
But these contracts must be properly drafted to hold up in court. If an employment contract attempts to set notice periods that are lower than the minimums in the Employment Standards Code, or if it is drafted ambiguously, or is otherwise problematic to the judge who hears the case, the contract will be interpreted in favor of the employee or simply declared unenforceable, with the result that the common law will apply anyway.
Legally Speaking appears every second week in LIFE. It is intended for information purposes only. Readers with a specific legal problem should consult a lawyer. This week’s column was written by James Cawsey, a student-at-law with the Red Deer law firm Duhamel Manning Feehan Warrender Glass. Cawsey can be reached at 343-0812 or at www.reddeeraltalaw.com.