Employment Standards and Dismissal for Incompetence
By Melynda Layton LLB
As Published in January 2002 Issue of Up-Date OHRPA Newsletter
Well-articulated, clear, and often-discussed employment standards are a vital component of employee assessment. Beyond that however, an employer that ensures expectations are well known and that performance is frequently reviewed will likely be protected from wrongful dismissal allegations should an employee be dismissed for poor performance.
A recent decision of Nova Scotia Supreme Court confirms and clarifies this point.
Mr. Kaiser was employed as a sales representative in the Maritime Provinces for Dural, a company that manufactured and sold adhesives and coating. Dural recruited Mr. Kaiser despite the fact he lacked sales experience; the company was eager to use Mr. Kaiser’s extensive list of customer contacts and this outweighed his inexperience.
According to Dural, Mr. Kaiser’s performance was immediately and continuously unsatisfactory. Dural alleged that Mr. Kaiser consistently met his sales quotas and wasn’t making enough sales calls. However, rather then inform Mr. Kaiser of his unsatisfactory performance, the CEO decided to dismiss him. Less a year after he was hired, the CEO and a Dural salesperson took Mr. Kaiser to a restaurant where they fired him with minimal notice. At the time, Mr. Kaiser was disabled and unable to work. Mr. Kaiser then commenced a wrongful dismissal action. Dural alleged Mr. Kaiser was dismissed because of his incompetence. Further, Dural alleged that since Mr. Kaiser was unable to work because of his disability, no notice was required.
Justice Coughlan rejected Dural’s position, stating that an employer must show the following four elements to justify termination for incompetence:
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the employer must demonstrate it has established reasonable objective standards of performance;
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the employer must show the employee has failed to meet those standards;
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the employer must show the employee has been warned that he/she has failed to meet those standards and that the employee’s position with the employer will be in jeopardy if he continues to fail to meet the standards; and
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the employer must show that reasonable time was afforded to correct the situation.
Justice Coughlan noted that Mr. Kaiser was not given reasonable objective standards of performance. Dural simply hoped that Mr. Kaiser would add to the business. Further, Mr. Kaiser received no warning that his performance was unsatisfactory and that he would be terminated if his poor performance continued. As a result, the judge held that Dural dismissed Mr. Kaiser without just cause and awarded damages representing a nine-month notice period.
This case highlights the need for employers to notify each employee of the performance standards expected of them. Beyond that however, this case and others decided in Ontario suggest that the obligation to keep employees informed is a continuing one: apart from an initial explanation, employees must be provided feedback concerning their performance at regular intervals. If that performance is considered substandard, a written explanation must be given outlining where the deficiencies lie, along with specific ways to improve performance. As well, a clear timeline for improvement should be discussed and the employee should be informed that a failure to meet these goals will result in dismissal.
Practically, employers can ensure that all employees are aware of both expected standards, and their current performance in a variety of ways:
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Provide a detailed job description for each position in the organization. Ensure that expectations are clear and reasonable. If the description is for a sales position, be sure to include target sales and contact quotas. Once again, ensure these targets are reasonable, attainable and reflect current average sales.
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Provide regular written performance appraisals for all employees. If an employee’s performance falls below the required standard, provide him/her with a detailed list of specific tasks and interim goals that must be achieved. Make it clear the employee must follow-through with these tasks and that a failure to do so will put their job in jeopardy.
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Schedule multiple follow-up meetings with any cautioned employees. One warning will not be sufficient to demonstrate incompetence. More than one chance to improve should be provided. If the employee shows some improvement at the intermediate date, consider extending his/her timeline for achieving their goals. Be flexible and accommodating.
Remember dismissal for incompetence is a heavy burden to prove. Simply failing to meet target sales quotas on a few occasions will not be sufficient – a more pronounced deficiency in performance is required. This history of poor performance should be documented in writing, through performance appraisals and writing warnings. The employee must be given a fair chance to improve their job performance before being dismissed, and this too should be recorded. These regular evaluations in writing will help alleviate potential human resources concerns and will also help ensure that a wrongful dismissal suit will not succeed.
To ask a question or for further advice please contact Melynda at melynda.layton@careerlaw.ca or by telephone at 613-225-4400
