Dismissal for Poor Performance: Does an Employer Need to Provide Severance?

| March 21st, 2017 | 2 Comments »

Only if there is just cause for termination, the employer may terminate the employee without severance pay. As an employer, it is very difficult to establish just cause for employee incompetence or poor performance. To do so, the employer must prove that the employee fails to perform essential duties or meet the required working standard, and that this has been ongoing; an isolated incident of poor performance will likely not be sufficient. To establish just cause for termination, there must be an established objective standard of performance, and proof that the employee’s poor performance is their own fault. Any mitigating factors can be considered by the courts. Among other, mitigating factors may include volume of work, whether the employee was hired as an experienced hire, and the training provided.

If an employer claims that there are ongoing issues of unacceptable performance, then the employer must provide a warning to the employee. The warning must include the employer’s performance related concerns and the consequences that may result. It is advisable that the warning be in writing and is clearly presented so that there is no possibility of confusion. An effective warning will identify what the employee is doing wrong, along with the preferred standard by the employee. Further, support for improvement such as supplemental training should be provided and stated in the warning, with a time limit for improvement and potential consequences for failure to meet the stated objective standard.

There are rare instances that may grant an employee just cause to terminate without a severance for isolated incidences. These cases usually involve gross negligence or incompetence that cause an employer significant harm, or a lack of skills that the employee claimed to have during the hiring process.

Whenever faced with an issue of poor performance by an employee, it is always best to seek the advice of an employment law expert. It is difficult to establish just cause for performance related issues, so any decisions to terminate without severance pay should be reviewed by an employment lawyer.

Can a Non-Payment of a Bonus Trigger Constructive Dismissal?

| February 24th, 2017 | No Comments »

In the case of bonus pay, would a disagreement over the entitlement, and subsequently a non-payment, be enough for an employee to claim constructive dismissal? When an employer changes an essential term of an employment contract without the consent of the employee, this is a unilateral change and would warrant a constructive dismissal claim. This means that the employee had no reasonable alternative but to walk away from the job. This requires a fundamental change to the terms of employment such as pay and responsibilities. The remedy sought would be damages in the form of ‘notice pay’.

This, of course, is circumstantial. Important factors include the amount of the bonus in question. If the bonus makes up a large proportion of the employee’s pay and is guaranteed, then a failure of payment would more likely result in a successful constructive dismissal claim. Alternatively, if the bonus was a small amount with no other alteration to the employment contract, a constructive dismissal claim will unlikely be successful. A 2016 Ontario Superior Court case of Chapman vs GPM Investment Management (the company) deals with exactly this.

In this case, Chapman was the CEO and President of GPM. Chapman felt he was entitled to a bonus of 10% of profits made off the sale of an asset (property) for which GMP was involved. GPM disagreed over this 10% bonus because they claimed the gains made did not fall under the definition of ‘profit’ as defined in the employment contract. Chapman quit and claimed constructive dismissal in addition to payment for the 10% bonus he felt was owed. The Ontario Superior Court found that Chapman was entitled to this bonus, however, the failure to make this payment was not enough to trigger constructive dismissal.

The reasons the court did not find this to be constructive dismissal was due to a few reasons: the bonus was not much compared to Chapman’s overall compensation, the terms of the employment contract (the bonus structure) were not altered, and the employer intended to continue  honouring the employment contract in the future. The disagreement was also over a particular type of asset that the employer was never going to deal with again, thus making this a one-time isolated event. Overall, the circumstances here did not fundamentally change the conditions of employment, and therefore did not amount to a constructive dismissal. In addition, the employer here gave Chapman options to peacefully resolve the issue.

If there is a concern over an issue regarding the payment of a bonus, it is important to attain legal advice. The issue may involve a disagreement over the interpretation of an employment clause, which requires a wholesome approach – it is often not enough to only consider the clause in question. For both employers and employees, it is advisable to seek legal assistance in determining the appropriate remedies.

Your Legal Rights After Maternity Leave is Over

| May 4th, 2016 | No Comments »

rights after maternity leaveEmployers are usually obligated to reinstate an employee following a maternity leave.  The employee has the legal right to be returned to the position she held prior to the maternity leave, and if that position no longer exists after the leave, to a “comparable” position.

The “comparable” position must be comparable in all respects – location, hours of work, quality of work, degree of responsibility, job security, prestige, and so forth.

If the employer can prove that the person on maternity leave would have been terminated regardless of the leave, the employer might be able to avoid the consequences of breaching this obligation.  However, the company has the onus of proving its case.

If a company does breach its obligation after maternity leave, the employee can claim lost wages, associated expenses, emotional pain and suffering, and even damages for the “loss of reasonable expectation of continued employment” – this could amount to an extra month’s pay per year of service.

Moreover, if the failure to return to work is found to be a punishment or “reprisal” for taking the maternity leave, then there could be additional damages against the company.

This topic is without a doubt, one of the most misunderstood and contentious issues in employment law. To learn more about your options, contact an employment lawyer who can explain and advise on which steps should be taken to your benefit.

 

Author: Daniel Chodos, Whitten & Lublin

Key Things That Should Be Included In Your Employment Contracts

| April 5th, 2016 | No Comments »

signing empoyment contractsWritten employment contracts are the backbone of most employment relationships in Ontario.  A good employment contract confirms all of an employee’s entitlements pursuant to the ESA, and, ideally, confirms that the employee will receive more.  We know that an employer and employee can agree to negotiate for better benefits than exist in the ESA and that an employee cannot contract for less.  The written employment contract is proof of the parties’ agreement with respect to the terms of employment.

So what do we want to see? First and foremost, we want to see an enhanced termination provision promising the employee more notice, severance and benefits than those available in the ESA in the event of a without cause termination.  After that, the employment contract should include each and every perk and benefit offered during the recruitment process: bonuses, benefits, remote access, flex hours, equity, options, you name it: if you talked about it during the interview process, be sure it makes its way into the final employment contract.

Don’t be afraid to negotiate – most of the time salary, title, and overall compensations are up for discussion.  The employer liked you enough to offer you the job, now’s the time to make sure you’re getting the best deal possible.  You can ask for enhanced severance, extra vacation, to waive a probationary period, to get benefits faster.

Especially if you are leaving secure employment to accept another position, go see a lawyer to have the employment contract reviewed.  There are certain protections we can talk about if you’re being induced away from an existing position based on promises with a new employer. Best practice will be to have all new employment contracts reviewed with counsel to ensure you’re getting everything you are expecting.

Author: Ellen Low, Partner at Whitten & Lublin

What is Wrongful Dismissal and Are You a Victim?

| November 20th, 2015 | 1 Comment »

A dismissal is wrongful if an employee has been terminated without adequate notice or fair payment in lieu of that notice. It is implied that a dismissed employee is entitled to “reasonable notice” of their eventual last day of work or the compensation they would have been entitled to over that period.

The focus of the wrongful dismissal case is the determination of the “reasonable notice” period. Our Court of Appeal has made clear that “determining the period of reasonable notice is an art not a science”. Courts consider a number of factors including, but not limited to, age, salary, tenure, educational background, recruitment to the job, specialty and whether similar positions are available in the marketplace at the time of termination. Payment in lieu of reasonable notice is what we commonly refer to as severance.

Be advised, reasonable notice is not always due to employees. An employer does not need to provide reasonable notice if they have clearly and legally limited notice. Moreover, employers do not need to provide any severance if they have “just cause” for dismissing an employee. For an employer to have just cause the employee must have committed a terrible act that strikes at the core of the employment relationship. Stated differently, to deprive a terminated employee of any severance they must have engaged in something as egregious as theft, serious dishonesty or harassment.

Rest assured, just cause is a very difficult for an employer to prove and employment contracts of even the largest and most sophisticated employers have been found inadequate in their attempts to limit notice.

Consider consulting the lawyers at Whitten and Lublin for an expert assessment of your wrongful dismissal case and severance entitlement.

Author: Paul Macchione, Whitten & Lublin

Q&A: Working through your severance entitlement?

| July 20th, 2015 | No Comments »

QUESTION

An employee’s entitlement to severance is to say the least, at the discretion of the employer. But this is not a point blank answer, as there are many factors that play into effect. Where an employee is terminated and not offered severance, but asked to work until the end of employment, is an employer legally permitted to do this?

ANSWER

Entitlement to Severance

Toronto employment lawyer, Daniel Lublin most recently wrote his response in his latest Globe and Mail article. He states that this is in fact, legal. Employers have the right to choose between offering the employee payment in light of notice or providing working notice.  This concept is known as reasonable working notice of termination. In this circumstance, the employer is entitled, by law, to ask the employee to remain at work and carry out their job until the last date of employment.

Wrongful Dismissal

If your employer has specified an end date, and the working conditions and your pay remain the same, then it is legal to ask you to work until the last day of your employment. Although, if you believe that you were wrongfully dismissed, you should contact an employment lawyer immediately to help you with your case.

Read Daniel Lublin’s Globe and Mail column and full article I have to work through my severance. Is this legal?

Addressing Legal Issues Related to Mental Health

| May 21st, 2015 | No Comments »

The Mental Health of Employees at Work

Addressing the legal issues related to the mental health of employees at work is one of the more perplexing issues facing employers in Canada. It is because of the nature of this sensitive topic and a lack of awareness that issues begin stemming from mental health in an office environment. It is important to protect your employees and educate yourself on the steps to take to accommodate your employees. 

An Employer’s Lack of Awareness 

In the Globe and Mail article, Dealing with mental illness in the workplace, employment lawyer, Daniel Lublin, concludes that an employer’s lack of awareness of their employees’ mental well-being may not free them from liability in the event that violence occurs in the workplace. In the article, Mr. Lublin details and explains the following key points:

  • Employers have a duty to accommodate their employees so that the employee may fulfill their job responsibilities;
  • Employers have a duty to inquire where the mental state of their employee is in question;
  • Employees may even in some instances have a duty to disclose their mental illness to their employer;
  • Employers have a duty to prevent harm to others in the workplace by taking every reasonable measure to protect their employees from committing or being victims of violence;
  • Employers should establish procedures for informing their employees of health benefits and wellness programs that are available to them;
  • Employers should remain vigilant and record any unusual behaviours. They are responsible for ensuring employees receive all reasonable accommodations; and
  • Employers should regularly review and update their action plan for managing a potential or real fallout from workplace incidents.

An employee’s legal rights to disability payments

| September 25th, 2014 | No Comments »

An injury or health complication can cause an employee to seek disability payments and/or modified work. Where disability plays a role, the insurance company is responsible to make payments to the employee.  Suddenly payments stop and the insurance company declares that you are capable of working in a different work environment. Can the insurance company do this?

In his most recent Globe and Mail article, Daniel Lublin, Toronto Employment lawyer discusses the term “disability” and how the definition evolves, usually after two years.  It is at this point that the disability insurance policy clause comes to have a different meaning which changes your legal rights to disability payments. In order to continue to receive benefits, an employee has to show that they are unable to perform any job, not just your own. Just as the employee has an obligation to prove that they are unable to work, an insurance company bears the same responsibility to prove the contrary.

Read Daniel Lublin’s Globe and Mail column and full article Can my employer cut off my disability payments?

The workplace computer and your legal rights

| September 23rd, 2014 | No Comments »

workplace computerA termination of employment can give rise to a number of factors that can cause frustration. Whether you are a long term or short term employee, you may or may not decide to save your personal files on your workplace computer.  If you save them on your workplace computer, what are your legal rights to them upon termination?

Daniel Lublin, Toronto Employment lawyer gives his response in his most recent Globe and Mail article where he says that the distinction between a picture hanging on your workplace wall and a picture stored on your workplace computer is very little. The factors used to establish if the contents in a workplace computer belong to the employer are: whether or not an employer authorizes the use of a workplace computer for personal use and/or a contract that states the photographs or documents belong to the employer.

To find out more, read Daniel Lublin’s Globe and Mail column and full article, My company fired me and won’t give me my pictures.

Your employment rights regarding mental illness therapy

| September 3rd, 2014 | No Comments »

An employer-employee relationship can be impacted as a result of mental illnesses.  Depending on the diagnosis, these illnesses sometimes require medical treatment or counseling that may or may not be of interest to the employee.  While the employee has legal rights, so does the employer.  Readers want to know, when an employee refuses to accept treatment or counseling, are these grounds for termination and is counseling mandatory?

Employment LawyerDaniel Lublin gives his opinion and explains to readers that an employer’s request for mandatory therapy is illegal and discriminatory in nature.  Similarly, terminating an employee for refusing to participate in treatment is also discriminatory.  There is of course an exception to the rule which he explains is difficult to show.  Managing mental illness includes various types of therapy, which make matters for an employer that much more complicated. Misunderstanding these rules and terminating an employee for failing to attend mandatory counseling can lead to a human rights complaint.

It is always best to consult with an employment lawyer who can give you expert advice.  Daniel Lublin’s full article Can someone be fired for refusing therapy? can be read in his Globe and Mail column.