Canada: Setting The Record Straight On Common HR Follies

Last Updated: May 16 2014
Article by Howard Levitt

As in life, the practitioners in the field of human resources too often blindly follow the folly of others, to the point it becomes collective wisdom. The assurance of the crowd creates its own certitude. Yet, a Monty Python skit I recall, hit the nail on the head. In it, a drill sergeant was calling out orders to the troops. While almost all of the soldiers were marching in unison, one aberrant marched to his own drum. Finally, the sergeant erupted, yelling: "He is the only one doing it right."

Following are some common human resource practices that have little rational foundation:

— The most common disciplinary warning provides, "Similar future misconduct will result in disciplinary action up to and including dismissal." Invariably what the employer means to impart is, if the employee does it again, she or he will be fired for cause. But the warning actually provides for a broad panoply of disciplinary responses, with dismissal only one of the possible options for similar misconduct of the most egregious type.

Therefore, when the employee commits the same type of misconduct, the first question for the trier of fact will be whether this new misconduct is at the extreme end of its type. If the employee wants to make dismissal for cause the next disciplinary step, it must clearly state: "Any further misconduct will result in your dismissal for cause."

— The most common severance formula provides for continued payment during the period of notice until the employee obtains another position and then provides the employee with 50% of the balance.

The purpose of this is twofold;

a) To provide the employee an incentive to commence work as soon as they find it; and

b) To emulate what a court would do if they find other work.

With respect to the former, most employees — anxious and insecure of their prospects — hardly need incentive to find another job after they are terminated. The hope of a potentially greater severance encourages few to malinger and no additional payment is needed to encourage re-employment.

Courts award severance so the employee is paid for their actual loss during the notice period. When the employee finds work at the same or higher salary, the severance ends, subject to ensuring they receive the minimal severance amount in the employment standards act. If they obtain a job at lower remuneration, the employee receives the difference only for the balance of the notice period.

This severance formula pays them as if their new salary is half of their former one. But in reality, very few employees take positions at half or less of what they earned before. Most find new positions at relatively close to their former salaries, or higher. As a result, in the majority of cases, this severance formula dramatically overcompensates the employee relative to what a court would.

Do most employers intend to offer employees far more severance pay than a court could possibly order? Not in my experience.

— Although there are less of them, too many employers still hire outside counsel to conduct extensive investigations into employee misconduct before deciding to terminate. In most cases, the employee could be dismissed without cause for a fraction of what they pay the lawyer just to conduct the investigation.

Worse, if the investigator finds there is no cause, the severance has to be paid anyway. If they decide there is and the employee challenges it, the investigator's report cannot be used as evidence, the investigator becomes a witness and the employer has to retain new counsel who has to be brought up to speed and start the case. Even then, there are usually no cost savings. Most investigations can be conducted in-house without tremendous expenses.

— Taking their nod from U.S. law and practices, many Canadian employers refuse to provide references, good or bad, beyond confirming dates of employment and positions. Their reason; fear of being sued. But that concern is illusory.

The courts protect employers from lawsuits related to providing negative damaging references by providing references (and job evaluations that damage employees' prospects) with "qualified privilege." The only time an employer can be successfully sued for libel based on a reference is if the employee can prove it was provided maliciously, and in bad faith i.e. the employer did not believe it itself.

That is an almost impossible task because the courts believe it to be in the public interest for employers to be able to honestly opine about an employee to potential new employers.

And they are right. There are too few motivational tools in the employer's armoury. If an employee knows their behaviour — good and bad — will follow them for the remainder of their career, they have a tendency to ensure it reflects positively upon them. And, good employees deserve to have prospective employers hear that about them.

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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