Canada: When Will Inadequate Performance Provide Just Cause To Dismiss A "Senior Manager"?

An Ontario court recently awarded a dismissed employee wrongful dismissal damages in spite of findings to the effect that the high-level employee had persistently failed to satisfy the employer's reasonable performance standards and had also been provided with repeated warnings and resources to assist him in meeting those standards.

The Ontario Superior Court of Justice's decision in Kurtz v. Carquest Canada Ltd., 2015 ONSC 7997 should be of interest to all employers who are faced with a high-level employee with deficient job performance.

Background

At the time his employment was terminated in January 2011, Thomas Kurtz was 50 years of age and had approximately five and a half years of service with the defendant. Kurtz's position as Director of Operations was a senior position. It involved a high degree of responsibility over a distribution centre with an annual budget of approximately $100 million.

Kurtz was transferred to his employer's Rexdale, Ontario location from California by way of an intra-company transfer on or around May 1, 2009, one and a half years before the termination of his employment. At the time of his transfer, the Rexdale location had pre-existing labour relations issues. Shortly after the transfer, the defendant sought to implement a new electronic inventory management system at its Rexdale operation.

Following Kurtz's transfer to the Rexdale location, his job performance was repeatedly assessed (in June 2009, in February 2010 and again in April, 2010) and he was notified that he was failing to meet employer's company-wide "Gold Standards" performance measure.

In September 2010, Kurtz was issued a final warning notifying him that there were "items [which] require[d] immediate attention and remarkable improvement as soon as possible" and cautioning him that failure to satisfactorily respond to the warning would result in immediate termination of his employment for just cause.

In September 2010, shortly after issuing this warning, the employer began to search for a replacement for Kurtz and, in January 2011, the company proceeded to discharge him from employment for cause.

Over the period of time between September and December 2010, the business position at the defendant's Rexdale distribution centre had in fact worsened.

Reasons of the Court

The Superior Court of Justice accepted that the defendant had valid business reasons to terminate Kurtz's employment, that its performance standards were reasonable and that those standards were repeatedly communicated to the affected employee. Similarly, there was no serious contention by Kurtz that he was in fact meeting his employer's standards.

However, where the Court took issue with the employer's decision to terminate Kurtz's employment was with respect to the time afforded to him in order to improve his job performance. The Court found that in light of the nature of the performance deficiencies, which were linked in part to rather longstanding, systemic issues, Kurtz was not provided sufficient time to improve his performance and his ongoing performance problems did not amount to just cause for dismissal:

This is not a case where an individual simply had to abide by rules in order to satisfy the employer. As a senior manager, Mr. Kurtz had to make significant changes in many areas of the operation of the Rexdale distribution center. He had to instruct, counsel and ultimately rely on others to put changes into effect ....

... Each of those issues, to a greater or lesser extent, is indicative of long-term problems that needed time, care and attention to resolve.

....

... [S]imply providing that the items mentioned required immediate attention and remarkable improvement as soon as possible does not give a proper time frame for improvement. Clearly the issues were of significance and in many instances were long-standing. It is unreasonable for the company to simply expect "remarkable improvement" with nothing further offered by way of assistance or strategies for change.

The Court's reasons emphasized that the employer's search for a replacement commenced in September 2011, shortly after Kurtz was issued a final warning.

Takeaways

  • Just cause is a high standard and any employer which is considering discharging an employee for cause as a result of performance deficiencies must clearly communicate to the employee in question the standard to be met, that his or her performance is wanting and that the deficient performance, if it continues, will result in termination of employment.
  • An employee must be afforded a reasonable amount of time to improve his or her performance after a warning is given. What constitutes a "reasonable amount of time" will depend on the nature of the employee's position, the nature of the inadequate performance and what is required in order to improve the performance, e.g. does the improvement require the involvement of other employees? Where problems are longstanding, a court may determine that an employee must be afforded more time in order to correct the problem or problems.
  • Searching for a replacement before an employee is afforded time to improve performance alleged to be deficient may be interpreted by a court as evidence that the employer did not provide the employee a reasonable amount of time to improve his or her performance.

Previously printed in the LexisNexis Labour Notes Newsletter

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Matthew Larsen
Events from this Firm
22 Nov 2018, Workshop, Vancouver, Canada

Managing and accommodating employees with disabilities is one of the more complex issues faced by employers today.

 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions