How effectively does your company record disciplinary conversations with employees? A recent Alberta decision highlights just how important this can be for employers.
In McDonald v Sproule Management GP Limited, Justice Marion of the Alberta Court of King's Bench writes a detailed decision considering the appropriateness of granting summary judgment – which is a decision in favour of the plaintiff without a trial – in a wrongful dismissal case.
The case involved a senior accounting executive, Kevin McDonald ("McDonald"), whose employment was terminated by Sproule Management GP Limited ("Sproule") for just cause in February 2016. McDonald alleged that the termination was wrongful and that he was entitled to significant severance pay.
Summary judgment granted
In response to an application by McDonald to decide the case in his favour without a trial, Justice Marion considered the arguments by both sides and conducted a thorough review of the court record to date, which included several affidavits and a transcript of a lengthy questioning of McDonald on his affidavit. Justice Marion concluded that the record was sufficient for him to grant summary judgment.
Although he found that McDonald's objective performance was poor and incompetent in his role as CFO, he also noted that Sproule's performance record displayed serious shortcomings in Sproule's communication and conduct toward McDonald, including the fact that Sproule failed to warn McDonald about his conduct on several occasions. Justice Marion concluded on the record that Sproule did not have just cause to terminate McDonald's employment, and awarded McDonald 18 months' pay in lieu of notice.
Lessons for employers
There are two key takeaways for employers from this Alberta decision.
The first is that, even in a case involving an allegation of just cause for termination with a significant record and substantial evidence, the Court may still determine that a summary judgment application is appropriate to fully determine a claim.
The second related takeaway for employers is the importance of clearly and consistently communicating expectations and potential consequences to employees when poor performance or behaviour arises. Despite the many instances of poor performance and inappropriate behaviour on McDonald's part, Sproule issued no warnings with respect to the behaviour nor did the company highlight to McDonald the consequences if he continued the behaviour. This case may have been decided differently had the employer kept a careful record of all disciplinary efforts.
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