1. Terminating Employees Just Got Even More Difficult:
What You Need to Know
Amanda Sarginson & Steven Williams

2. Session Overview
The Supreme Court of Canada’s decision in Wilson v. AECL
The practical impacts of this decision
Managing Employee Absences

3. What Happened in Wilson?
Wilson v. Atomic Energy of Canada Ltd., 2016 SCC 29:
Wilson was dismissed without cause and without reasons
Filed a complaint under s. 240 of the Canada Labour Code, alleging unjust dismissal
Adjudicator found the Code does not allow for dismissals on a without cause basis, even if the employer offers an enhanced severance package
The Supreme Court agreed…

4. What Happened in Wilson?
Supreme Court clarified that federally-regulated employers are not permitted to dismiss non-unionized employees on a without cause basis, unless:
The employee is truly a manager
The employee has less than 12 months’ service, or
There is a discontinuance of work (i.e., a layoff)
Federally-regulated employees thus have essentially the same protection against termination without cause as unionized employees

5. What is the Impact of Wilson?
Termination for just cause:
No change
Employers can still terminate for just cause (but a high threshold)
Termination without cause:
Technically cannot be done, even if employment contract allows it and compensation in lieu of notice is provided
Employee has 90 days to file a “s. 240” complaint; reinstatement is available as redress

6. How Can Employers Manage their Workforces and Terminate Employees in the Wake of Wilson?

7. Amend Employment Contracts

8. How to Amend Employment Contracts
Former termination provisions that provided for a without cause termination at any time and for any reason are now unenforceable
To minimize but not eliminate common law risk, amend termination provisions to read as follows:
In the event your employment is terminated on a without cause basis, you agree that any entitlements, including notice, severance and benefit continuation will be limited to the minimal requirements of the Canada Labour Code (CLC).
You acknowledge that any notice or severance payments provided as per the above are in complete satisfaction of any common law notice requirements and you are not entitled to any additional notice or damages arising from the termination of your employment at common law.

9. Properly Characterize Employees as Managers

10. Proper Characterization as Managers
Managers can still be terminated without cause
Is an employee truly a manager?
Does the employee:
Engage in administering the organization (as opposed to dealing only with operations); and
Have the power of independent action, autonomy and discretion?

11. Characterization of Managers cont’d
Consider specifically whether the employee has:
The authority to make final decisions in matters of consequence to the employer
The power to actually formulate company policy in important matters
Control over the lives of other employees – the power to hire, fire, and discipline subordinate employees
The power to commit the employer to the payment of specific sums of money for services rendered
Note: employees who supervise staff but do not exercise the other elements of managerial authority (or only exercise them occasionally or sporadically) are not managers for the purposes of the Code

12. Manage Probationary Periods

13. Probationary Period
To establish whether the individual is suitable for the job/continued employment
It is easier to terminate an employee for poor performance or lack of ability during the probationary period
Consider a probationary period of 11 months in order to maximize flexibility – and avoid the application of s. 240

14. When to Call it Quits
It is not necessary to wait for the end of the probationary period, if the employee:
Engages in serious or repeated misconduct, or
Clearly cannot meet standards after reasonable assistance is provided
Keep an eye on the probationary period, or else, once an employee has 12 months of employment, s. 240 remedies apply
If in doubt, don’t extend the probationary period – terminate!

15. How to Justify Dismissal During the Probationary Period
The employer’s right to reject an employee during probation is very broad
The employer need only:
Show legitimate reason(s) for the dismissal – i.e. the decision was made in good faith and was not arbitrary or discriminatory
Show the employee was made aware of the standard(s) expected

16. Use Performance Management to Your Advantage

17. Discipline vs. Performance Management
The distinction lies between non-culpable (innocent) and culpable (blameworthy) behavior
Non-culpable: employees who try to do the job but are unable
Address through performance management
Culpable: employees who simply do not follow the rules
Address through the disciplinary process

18. How to Manage Performance?
Identify the problem(s) in specific terms
Meet to discuss
Set our clear and defined expectations in writing, as well as the consequences for not meeting those expectations, i.e. termination
Discuss possible solutions (additional training, job shadowing)
Document, document, document
Performance management should be an ongoing process, not a sporadic one

19. Termination for Incompetence/Poor Performance
The employer must prove that it:
Set a clearly defined level of job performance
Communicated the required level to the employee
Gave the employee reasonable supervision and instruction, and time to meet the standard
Can establish that the employee is unable to meet the performance standard
Gave reasonable warnings that failure to meet standard would result in termination

20. Utilize Progressive Discipline

21. What is Progressive Discipline?
Purpose: correct, not punish
Start with the minimum level of discipline necessary
If behaviour is repeated, stronger measures are needed
Note: progressive discipline may not be appropriate for serious incidents

22. Progressive Discipline – Steps
A typical pattern is:
Verbal warning
Written warning
Short suspension (1-3 days)*
Longer suspension (5-10 days)*
Discharge
*Right to suspend should be expressly stated in the employment contract or HR policy in order to defend claim of constructive dismissal

23. How to Impose Discipline
Address issues immediately
Conduct an investigation / provide employee an opportunity to respond
Ensure discipline is timely
Ensure discipline is proportionate
Consider:
Severity of the misconduct
Aggravating factors
Mitigating factors

24. Get the Most out of Fixed Term Contracts

25. What is Fixed Term Employment?
The employee works only for a definite period of time
The employment contract contains a start and end date
The employee is guaranteed work only for that period
Usually used for:
Covering leaves of absence
Projects with a definite lifespan (e.g., due to funding)
Spikes in demand

26. Why Hire for a Fixed Term?
To “test out” employees
To maximize flexibility
At the end of the contract, the employer can opt to:
Hire employee as an indeterminate employee
Hire employee on another fixed term contract
Not renew the contract
There is no requirement to provide reasonable notice of termination when the term ends!

27. Exercise Caution: Ending the Term Early
Early termination of fixed term contract creates employer liability for damages to the end of the contract
To avoid this, include an “escape” clause in the employment contract

28. Managing Employee Absences

29. What to do if You Suspect Sick Leave Abuse
Step 1:
Is there a pattern?
Is sick leave excessive compared to colleagues?
Step 2:
Meet with the employee make aware of concern
Ask the employee if there is a reason for absences
Two options:
No reason – monitor with attendance management program
Medical reason – explore duty to accommodate

30. Attendance Management
Staged program
Periods of review usually 3 or 4 months
Compare with average of employee group
Must exclude absences related to disability or WSIB
Employee warned of consequences of not improving attendance
If no improvement termination

31. Accommodation
Obtain medical documentation confirming medical need for absence
Do not need to accept short doctor’s note
Functional abilities form (FAF)
Confirm disability exists that affects absenteeism
Explore restrictions / limitations
Limit questions to information needed to verify link between absence and health

32. Duty to Accommodate To the point of undue hardship This could mean:
Tolerating an increased level of absenteeism
Providing a leave of absence (paid or unpaid)
Allowing the employee to use vacation or other paid time off
Adjusting the employee’s duties and tasks, work hours, work location, and/or amount of work

33. Questions?

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