Do your homework before firing an insubordinate worker

By Tony Poland, LegalMatters Staff • Ensuring the punishment fits the crime must be the overriding factor in any termination but many employers act too hastily and that can be costly, says Toronto-area employment lawyer and mediator Stuart Rudner.

There can be nothing more expensive than regret, which is an appropriate adage to consider when deciding whether dismissal with cause is the appropriate action to deal with an employee’s transgression, says Rudner, founder and principal at Rudner Law.

“Often an employer assumes that somebody who engages in misconduct can be fired on the spot,” he tells LegalMattersCanada.ca. “However, the threshold to establish just cause in a dismissal is quite high. And to the surprise of many, it is not only based on the misconduct in question.”

Rudner, who appears in the media frequently to share his expertise, has spent more than two decades practising Employment Law, mediating employment disputes and writing about summary dismissal, including his text: You’re Fired! Just Cause for Dismissal in Canada, “a practical reference guide for employment law practitioners, human resources professionals and business people.”

Written in 2011 and updated twice a year, the book focuses on summary dismissal in Canada and provides a thorough review of the law to help clarify what constitutes cause for termination.

Case summaries

“It is made up of two volumes. The first is broken down into chapters with each examining a different type of employment misconduct or related issue such as human rights,” Rudner explains. “The second volume contains hundreds of case summaries that highlight the facts and legal analysis that courts and arbitrators have provided. People often find it helpful to compare a case that is similar to their own and see how a court has ruled. I am constantly reviewing new judgments and updating the book.”

He says he has found employers are often guilty of overreach when it comes to dismissal with cause.

It is not impossible to fire employees for cause, Rudner says.

“I adopted the phrase ‘just cause is not a lost cause’ many years ago because there are some cynics who believe you can never fire anyone in Canada,” he says. “There are dozens of cases where courts have upheld summary dismissal, but it is important that people understand that it will depend on many factors.

“I have spent a great deal of time during the course of my career looking at just cause cases,” Rudner adds. “I have discovered that what tends to surprise people is that the analysis needed to terminate an employee with cause is far more complicated than they expect.”

Rudner says there are two types of dismissal, with cause or without cause. 

“With cause means the employee receives no severance, no notice and no compensation whatsoever,” he says. “Without cause, which is the case in the vast majority of dismissals, means the person is entitled to severance. There’s no middle ground, so if you get it wrong and a court finds that you didn’t have just cause, you’re going to be on the hook for all the severance the employee would have been entitled to receive.”

Courts can also award damages if the judge believes the employer acted in bad faith, says Rudner. As well, the employer will have to spend money on their own legal team and if they lose, they will likely have to pay a portion of the worker’s legal costs, he adds.

Rudner says employers will often assume their right to terminate an insubordinate worker is absolute. Although he often receives questions like “surely I can fire an employee for stealing?” the reality is that there are no absolute rules.

Bar is high

“The bar to establish just cause in a dismissal is quite high and it is not only based on the misconduct in question. You have to review all the relevant circumstances,” he says. “In many cases, the deciding factor is the employee’s response when confronted. Are they apologetic and contrite? Does the employer have a reason to believe the behaviour won’t reoccur? If so, there’s a likelihood the court will grant the employee a second chance. 

“However, if the worker is dishonest and refuses to admit responsibility, that is when a court is going to say that the relationship is irreparably harmed and there is just cause to fire them.”

Rudner says the worst thing an employer can do is make a rash decision.

“Often a company believes they have an open and shut case. They caught somebody engaging in misconduct they thought was intolerable and immediately fired them,” he says. “If they had come to me first, I would have told them that before rushing to judgment there must be an investigation. The employer must give them a chance to respond and explain their actions.

“If you allege just cause, you are rolling the dice. In some cases, it’s worth taking that chance but I want to make sure the employer is aware of the risk.”

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Rudner says there are many factors that go into a dismissal with cause, such as length of employment, prior disciplinary history, the worker’s response to the behaviour as well as mitigating factors, such as illness or addiction. 

He cites two recent decisions, Levi Strauss & Co. v Workers United Canada Council and Garda Security Screening Inc. v. IAM, that demonstrate how thorough employers must be in termination for cause cases. Even where the dismissal was upheld, it was not as simple as showing that the employee did something wrong.

“If you look through each one of these rulings, you find that the employees failed to take responsibility for their actions or acknowledge any wrongdoing; this allows an employer to credibly assert that the relationship has been irreparably harmed, which is crucial,” Rudner says. 

As a mediator, he is usually the first neutral party to review the case.

‘Honest and considered opinion’

“I give the employer an honest and considered opinion, which they may not like,” he says. “Often I am looking for much more information than the employer expects they need to provide. They want to simply say that, for example, the employee was guilty of misconduct. However, I understand all the other factors a court will consider, and I expect to see evidence on those points.

“I am considering this objectively, as a judge would,” Rudner adds. “But I’m also looking at this based upon 20 years of experience. I have reviewed thousands of cases and I have a pretty good sense of what judges or arbitrators are going to look at it and how they’re going to decide.”

He says he will examine the investigation report and file and consider how similar behaviour was treated in the past.

“Two employees can do exactly the same thing but the discipline that will be appropriate could be different, especially if one is apologetic and forthright and has a clean disciplinary record and assures you it will ever happen again,” Rudner says. “You may have another employee who was dishonest about their transgression, and tried to cover it up and has been repeatedly disciplined despite working there for a short time. In that case, it’s quite possible a court will find the first worker should get another chance, while the second individual should be fired for cause.”

He says it is also important to consider how similar misconduct was punished in the past.

“For example, if you give an employee a one-day suspension for swearing at a customer, and then fire someone else who commits the same offence, you are going to have to justify that dismissal,” Rudner says.

He says termination with cause should only be considered after the employer has done their due diligence.

“Perhaps the employee is guilty but there are mitigating factors,” Rudner says. “You need to take everything into account before you make a decision, because the stakes are high.”

When it comes to employment law, employers and their workers shouldn’t make assumptions because the right legal advice can save aggravation and money in the long run, he says.

“You are talking about your livelihood if you are a worker. If you are an employer, you need to assess risk and minimize liability,” says Rudner. “You want to make sure you get it right and you don’t expose yourself to unnecessary costs.”