An employer’s decision to “shoot first and ask questions later” in a just cause dismissal that failed in court should be a wake-up call to other organizations, a legal expert says.
Kerry Lalonde was fired by the Swan Hills Waste Treatment Plant in Alberta back in 2012. He had no prior warnings or suspensions when his manager accused him of putting a life in danger, lying to his supervisor and insubordination. He was suspended, and later dismissed for cause without being given an opportunity to respond to the allegations.
Lalonde successfully sued for wrongful dismissal, with a court awarding him $75,000 for his former employer’s breach of good faith.
Field Law partner Kelly Nicholson says the case highlights why employers need to be cool-headed when moving to dismiss employees for cause, and the importance of clear termination clauses in employment agreements.
HRD: What are the biggest mistakes you see from employers when it comes to terminations and the language used?
KN: [This case] emphasizes the need for employers to act in a more circumspect way when they are considering a for cause termination, even where they think they have the clearest of cases, there’s a continuing obligation to ensure that they’ve taken the proper steps, that they have performed an investigation that is appropriate and is characterized by fairness and prudence.
This isn’t particularly new, but it vividly re-emphasizes the need for employers to act with a cool head and examine all the circumstances, and make a rational decision based on all the evidence, which may not be emotionally appealing to frontline managers at times, but it is certainly the more prudent course for the company to take overall.
That’s a message for HR people, ultimately, that there may be an education issue that’s underscored by the decision. It’s up to HR to make sure that the frontline managers in the organization are fully appraised of the need to act in a circumspect fashion, conduct an appropriate investigation before an ultimate decision to terminate for cause.
HRD: What makes a good termination clause, or how do you write one that’s going to stick?
KN: It’s necessary to try to consider all the various contingencies that might arise on termination, and make sure that you’ve addressed them in the clause in some fashion, so that there’s appropriate language to address a without cause termination, there’s appropriate language to address a for cause termination, and appropriate language to address the other ways in which an employment agreement might come to an end – for example, through frustration, or scenarios where the employee is the one who initiates the separation.
Particularly at higher levels of seniority and responsibility within the organization, it’s necessary to have language that carefully considers those various circumstances upon separation. It’s not quite as important at lower levels of responsibility within the organization, because typically those sorts of relationships don’t necessarily give rise to contested litigation.
HRD: How often do employers need to get a lawyer to look over an employment agreement? Every year, or just when something changes?
KN: I don’t know that it’s necessary to do it every year, but it is necessary to do it whenever there’s a new case like this one, and a development of the law that might change the way that future courts interpret or approach termination clauses, and to make sure that any kind of language that’s been identified as problematic in the case law has been identified in your own agreements and filtered out, and replaced by something more effective.
If there’s no change in the nature of employment, and there have been no developments in the case law, then I don’t know that it’s necessary for there to be a review, but if an employee changes position, if there’s a change of ownership in the company, there’s a significant increase in responsibilities, if the employment agreement’s replaced for some reason, then it’s necessary to revisit the termination language, as much as the other language, for that matter, and make sure that it remains relevant and appropriate.
HRD: What else do HR professionals and employers need to know?
KN: Sometimes when it becomes clear that for whatever reason, an employee is no longer wanted by the organization, that they’re no longer a fit, or one of the many other reasons why it might be appropriate to consider termination, it’s useful to consider a course other than cause – even where cause might be suspected, but where the case is weak for cause or ultimately unsubstantiated, then it’s appropriate to consider other strategies for separation, like a without cause separation that secures a release in favour of the company in exchange for a negotiated severance of some kind.
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