Employers will sometimes terminate their employees for poor performance. From the employers perspective, poor performance can constitute “just cause” dismissal. Despite just cause termination, the threshold to establish “just cause” for poor performance is high under both the Employment Standards Act and under the common law. In some cases, termination for just cause when none exists may allow a judge to order the employer to play aggravated damages in addition to termination pay.
To establish poor performance or incompetence, the employer must show that the employee fails to perform the essential conditions and duties of their job and that this has occurred on an ongoing basis. Isolated incidents of poor performance will not justify “just cause” dismissal.
Employers who want to establish just cause for poor performance must ensure that they have established objective standards of performance. Courts will also consider mitigating factors such as work volume, whether the employee hired was experienced in the job and whether or not training was provided.
If the employer finds there are further issues of performance despite training being given, progressive discipline and warnings must be given prior to termination. Warnings should be in writing and should include concerns related to performance and/or consequences that may occur if performance issues are not rectified. Support for improving should also be provided to the employee with a reasonable time limit for improvement. This will allow for an objective standard to be created and will show the court that the employer took active steps to help the employee rectify their performance issues. If the employer finds that the employee has failed to correct their issues within the required time frame, courts will look positively to the objective performance standards created by the employer in justifying termination.
In Cottrill v. Utopia Day Spas and Salons Ltd. 2019 BCCA 26, the plaintiff was a skincare specialist. The defendant began a review of the plaintiff’s work and found out that she was underperforming. The defendant took active steps to warn the plaintiff about her performance issues and gave her three months to improve. If she did not improve, she would be terminated. The plaintiff over the course of three months significantly increased sales and established a new client base. Despite her improvement, the defendant terminated her “for cause” because she had not met all performance standards and because the defendant felt she had attitude problems.
The defendant argued that the plaintiff failed to meet all performance standards despite the warning while the plaintiff argued that the standards set to determine her performance were not a reasonable opportunity for her to improve. The court stated that failing to meet all performance standards does not justify “just cause” dismissal in all circumstances. Ultimately, the court held there was no just cause and that it was unreasonable of the employer to establish new performance standards it had not previously required of the plaintiff. The court also noted that the defendant failed to provide a reasonable and fair assessment of the plaintiff’s performance and that the employer could not rely on vague statements of bad attitude to dismiss the plaintiff. Objectively, the plaintiff met her performance criteria and increased sales and this entitled her to damages in lieu of notice as well as aggravated damages for the defendant’s failure to consider her enhanced performance during the three months and for the defendant’s breach of the duty of good faith.
If you are seeking to terminate an employee for poor performance, contact top Toronto employment lawyer, Stacey Ball, to ensure your organization has engaged in the requisite steps to establish an objective standard. If you are an employee who has been terminated on this basis, our office can help you challenge your employer’s decision. Call 416-921-7997 extension 225 to book a consultation.