Termination for justifiable cause without notice and without
severance has been called the "capital punishment of
employment law". The unfortunate employee departs with
nothing but a bad name and an uncertain future. The departing
employee is entitled to be informed, usually in writing, of the
specific nature of the conduct or misconduct that led to her
termination without compensation and nothing more.
Corporate employers too often believe that perceived misconduct
and one or two warning letters to "pull up your socks or
else" will do the trick. Employers may be very unhappy
with the performance of a particular employee and yet be without
justification for termination for cause. Even poor performers
can argue legitimately that it takes two to tango, and that the
employer did not properly supervise, mentor, or encourage the
employee to perform more adequately. In some cases, the
expectation of the employer is not met because the employer has not
communicated explicitly to the employee what is to be expected from
him or her.
Employment lawyers are delighted when a terminated employee
shows up with a letter indicating termination for cause based upon
performance issues. The lawyer rubs his hands in glee because
he knows in all likelihood the termination for justifiable cause
will not stand up in court and the employee will not only receive
appropriate severance payment but may be successful in his/her
claim for punitive and other damages.
The boss may be too quick to determine that cause exists for the
termination of an employee who is irritating or even
irresponsible. In most cases, the business-like approach is
to consult with an experienced employment lawyer who brings not
only knowledge of the relevant law, but his objectivity and
experience to bear on what otherwise might be a purely emotional
reaction to perceived incompetence or insubordination. Before
an employer makes the allegation that employment ought to be
terminated for justifiable cause, such an employer should keep in
mind the recent case of Ogden vs. Canadian Imperial Bank of
Commerce, a decision of the British Columbia Court of February
In this case, the plaintiff, Ms. Ogden, age 41 worked for CIBC
for seven (7) years. During that term she built a portfolio of high
networth clients, primarily comprised of Chinese immigrants.
She was a high performer and had been praised for her performance
on a number of occasions.
Ms. Ogden was terminated for justifiable cause in March of
2011. The Bank alleged that she had breached its conflict of
interest policy when she accepted certain wire transfers from third
parties in China into her personal account and directed a transfer
of those funds to a client. She testified that she may have
made a poor judgment call when faced with an urgent request but
that her conduct did not justify termination for cause from her
position at the Bank.
The Bank on the other hand took the position that the wire
transfer was merely the culminating incident in a number of
incidents where the plaintiff had been warned of her deficiencies
and advised to correct her behavior. The Bank argued that in
light of these warnings, they had "cumulative" cause to
terminate her employment without compensation.
The British Columbia, Supreme Court felt otherwise. In the
plaintiff's wrongful dismissal action for damages, the Court
held that the defendant CIBC did not have justifiable cause for
dismissal of the plaintiff ,Ogden. The Court reviewed the
warning letters and felt that they were either unjustified or did
not breach the Bank's code of conduct. The wire transfer
incident on its own, did not provide justifiable cause for the
plaintiff's dismissal. The Bank alleged that the
plaintiff had engaged in a conflict of interest. The Court
felt otherwise and held "no actual conflict of interest
occurred, the plaintiff did not benefit from the wire transfers,
and no harm resulted to the defendant from the
incident." The Court also found that her dismissal was
communicated to her in a "cavalier, high-handed and
insensitive manner, and was designed to end the plaintiff's
career and to ensure that the defendant Bank retained the entirety
of her client portfolio."
The plaintiff, Ogden claimed not only damage for wrongful
dismissal but aggravated damages as well. The Court and the
parties agreed to assess damages at a later date.
The case presents a lesson to be learned by employers who are
prepared, without careful consideration and advice, to terminate
the employment of an individual based on justifiable cause.
Capital punishment should not be applied to an employee unless
there has been a careful assessment by the employer, based on legal
advice, that there are indeed clear grounds for termination of
employment for justifiable cause.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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.
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.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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