We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Howard Levitt: This employer misplayed a dismissal so badly that it should serve as a guide for everyone Back to video

We apologize, but this video has failed to load.

Try refreshing your browser, or
tap here to see other videos from our team.

Play Video

This is the story of a well-intentioned Manitoba employer whose instincts failed it at every turn. It took a promising defence and, through a series of common errors, ensured that it could not succeed.

It dismissed an employee of whom it could be said, if any business had even two employees like her, the business could not survive. In other words, it had good reason to fire her without severance-for cause.

But it made mistakes at every pass, which I see too commonly, to the point that this case could be a checklist for every company- in terms of what not to do.

1. There was no written warning

There were certainly admonitions. But criticism is not a warning. To be a legal warning supporting an ultimate dismissal for cause, they must actually warn the employee of future consequences if the misconduct continues. Anything less is simply training, not a “warning”.  A warning reads like this, “Any future similar incident will result in your dismissal for cause without severance.” No ambiguity in that. Few “warnings” that I see qualify. Poor as her performance was, the employer had done little to build up a case by setting the standards, providing the requisite training and providing appropriate warnings.

2. The dismissal letter said nothing about cause

Indeed, it said the opposite. It declared that the employee was let go as result of a restructuring even though there was no restructuring at all. The company said that it had specified that to permit the employee to collect EI and out of consideration for her feelings. But it will now be difficult for the employer, if sued, to claim that that dismissal letter was disingenuous and the employee was actually fired for cause. The only exception would be if the cause was “discovered” after the employee’s dismissal. If the employer knew about the cause and chose not to rely upon it, that “cause” is condoned and cannot be relied upon.

3. The dismissal purported to rely upon an employment contract

First, that makes an argument of cause even more difficult and, if asserted only after a lawyer’s letter, would appear vindictive and asserted only to save severance. Second, the contract, like the termination provision in most employment contracts, was unenforceable. The employer had made the mistake of not reviewing and updating their historic contracts with an employment lawyer. Since most of the cases invalidating employment contracts have been in the last four years, it is prudent to update such contracts now.

4. The employer’s offer to the employee was below both the amount in the contract and even below the amount required in the employment standards act

Once the court finds, for the reasons above, that there is no cause, offering money below the minimum statutory entitlement would do little to endear the employer to the court. Indeed, it will have the contrary affect.

5. The employee was entitled to a “discretionary bonus” on top of their salary

The company obviously would want to argue that, for the very reason the employee was fired, they would have received no bonus either for the period prior to the termination and for the severance period. However, the offer included an amount for a bonus, making that argument virtually impossible.

6. The bonus was to be based upon reaching various targets to be set by management

But no targets were ever set. In such circumstances, courts have found that the employee is therefore entitled to their target bonus since the company, having set no targets, could not argue that targets were not met.

How many employers reading this have made some or all of these mistakes, sometimes in the very same dismissal?

Most of the points are little more than common sense. Because a judge looks upon these issues based upon what the reasonable apprehension of the employee would be. Did they realize that they risked being fired for cause? Did they realize they were entitled to no bonus? Is the employer perceived by the court as being fair to that employee?

Lawsuits are a game of narrative. It is important, whichever side you are on, to have the most logical and emotionally appealing story.

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practices employment law in eight provinces and is the author of six books including the Law of Dismissal in Canada.