"Cause" for termination is a difficult standard to
meet in Canada. So what are your alternatives if you don't have
cause? Warning, suspension, demotion, transfer? In Haddock v. Thrifty Foods (2003) Limited and
Quadcam Holdings Ltd., the British Columbia Supreme Court
has recently said a demotion may not be a proper response.
Furthermore, a warning must be "current" to disentitle a
plaintiff to damages.
The Plaintiff's Declining Performance
The plaintiff was a grocery store department manager. He had
worked his way up to that position over the course of 16 years. For
the first 14 years of his employment, the plaintiff was a good
employee. But the plaintiff started abusing alcohol –
resulting in poor performance in the last two years.
In October 2003, the plaintiff was warned in no uncertain terms
that the effective performance of his duties was jeopardized by
issues in his private life and he was at risk of losing his job.
The warning letter also referred to the employer's perception
of a dependency problem and offered support for treatment of the
problem. The letter clearly outlined performance expectations,
including attending work on time and performing the various duties
of his middle management position. The plaintiff signed and
accepted the document.
There were no further discipline letters until August 2004 when
the plaintiff overindulged in alcohol at a weekend softball
tournament and did not attend work on time on Monday. The plaintiff
acknowledged that he had screwed up. In response, the employer
offered to demote the plaintiff to a non-management position or
explore the possibility of a transfer to another store. When the
employer confirmed that a transfer was not possible, the employer
further encouraged the plaintiff to apply for short term
disability. After a couple of weeks of not hearing from the
plaintiff, the employer terminated his employment.
Demotion Not Proper
The first question before the Court was whether the demotion
offer amounted to constructive dismissal. The Court determined that
there would have been a financial cost associated with the demotion
- a 16% to 20% swing in income. The Court further found that the
duties of a non-managerial position within the store were
significantly diminished from his managerial role. This constituted
a substantial change to the essential terms of the employment
contract, or in other words, a constructive dismissal. As such, the
demotion was not a proper response.
Insufficiency of Warning
The next question was whether the employer was in a position to
have terminated the plaintiff's employment given the previous
Here, the court considered whether the 2003 warning, although
sufficient at the time it was given to advise the plaintiff that
his job was in jeopardy, was "current" in August 2004
when the demotion conversation occurred. The Court found that the
passage of time and lack of any other warnings, verbal or written,
between October 2003 and August 2004 meant that the October 2003
warning was not sufficiently current to meet the requirement that
the employee must be taken to know his job was in jeopardy at the
time of termination. The Court determined that a further warning
was needed before the employer could terminate his employment
without any notice. The lack of a final warning meant that the
plaintiff was entitled to damages.
Meaning for Employers
This decision shows that employers cannot rely on warnings given
some months or years earlier to perpetually keep an employee on
notice that his or her job is in jeopardy for continued failure to
meet standards. Periods of poor performance that go without further
warnings can effectively reset the clock requiring employers to go
through a whole new process outlining performance expectations.
This outlines the need for employers to have regular reviews of
employee conduct, particularly when dealing with poor performing
employees. This likely applies throughout the country.
Furthermore, demotions to which an employee does not agree may
result in a successful constructive dismissal action.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
A former teacher at Bodwell High School has learned a valuable lesson from the B.C. Human Rights Tribunal— it is not discriminatory for an employer to offer child-related benefits to only employees with children.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
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