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Management and Organizational Studies
Management and Organizational Studies 2275A/B
Philip King

CHAPTER 21 TERMINATING THE EMPLOYMENT RELATIONSHIP ENDING THE RELATIONSHIP • The employment relationship can also come to an end through less pleasant means as when the employer: o Summarily dismisses, or fires, an employee o Gives the employee notice of termination o Acts in such a manner that the employment relationship becomes untenable • Implied term is subjective to: o Collective agreements and individual contracts which may specify the terms for ending the employment relationship o Employer may terminate the employment contract by giving the employee reasonable notice of termination. o Collective agreements and individual employment contracts that provide for notice periods and rights on dismissal. DISMISSALS FOR JUST-CAUSE • Just cause – employee conduct that amounts to a fundamental breach of the employment contract. • Exists when the employee is guilty of one or more of: o Serious misconduct o Habitual neglect of duty o Incompetence o Conduct incompatible with duties or prejudicial to the employer’s business o Willful disobedience in a matter of substance Serious misconduct • The cumulative effect of minor infractions must be such that there is a serious impact on the employment relationship. • Serious misconduct – Intentional, harmful conduct of the employee that permits the employer to dismiss without notice. • Progressive discipline policy – The duty to warn the employee and give an opportunity to improve performance. Less to more severe punishment. o Warning may be oral, or in writing and should be clear and understood by the employee. • Single act of misconduct can justify dismissal if it is sufficiently serious. • Condonation – employer behaviour that indicates to the employee that misconduct is being overlooked. o i.e. an employer who is aware of the harassing activities of an employee and who ignores or tolerates the activities will have difficulty arguing just cause for termination o Only occurs only if employer is fully aware of the wrongful behaviour Habitual Neglect of Duty • Habitual neglect of duty – Persistent failure to perform employment duties. o Usually absenteeism and lateness • Harder to establish lateness than absenteeism as grounds for dismissal o Courts will consider whether the employee had a valid excuse, whether there were warnings concerning lateness, and whether the time was ever made up. Incompetence • Incompetence – Lack of ability, knowledge, or qualification to perform employment obligations • Substandard level of performance must be evident after employee has been given a warning and an opportunity to improve. o Standards must be fair and reasonable Conduct Incompatible • Conduct incompatible – personal behaviour that is irreconcilable with employment duties or prejudicial to the employer’s business. o i.e. accepting lavish and inappropriate gifts from employer’s clients. • Can also apply outside working hours. o i.e. a school board was deemed justified in dismissing a school superintendent who was convicted of a petty fraud outside the performance of his duties. Willful Disobedience • Willful disobedience – Deliberate failure to carry out lawful and reasonable orders. • Asingle act could not constitute grounds for dismissal unless it was a very serious act. o To rely on this ground, the employer would have to establish that the instructions or directions given to the employee were unambiguous and that the employee had no excuse for disobeying. o Combination with other types of misconduct such as insolence or insubordination could justify dismissal. Other Causes • Most other causes fit into the category of misconduct o i.e. harassment, disruption of corporate culture, consumption of alcohol/drugs in the workplace, and drug abuse. o However, each situation needs to be analyzed on its facts related to if:  Conduct was a single act  Conduct was condoned in some manner  Employee had a disability  Employee had been warned about conduct and the consequences of failure to improve Non-Cause and Near Cause • Reasonable notice –Aperiod of time for an employee to find alternative employment prior to dismissal. o What constitutes “reasonable” notice is to be determined in relation to factors such as age, length of service, availability of employment, and the status of the employee. Risks in Just Cause Dismissals • The employee is more likely to bring a suit against the employer when dismissed. • An employer should carefully consider all of the potential costs of dismissing for cause and consider a termination settlement. DISMISSALWITH NOTICE • Employee hired within an indefinite period of time may be dismissed at any time and without cause as long as the employer gives notice of the termination or pay in lieu of notice. • Termination of a fixed-term contract prior to its expiry is a breach of contract. • The period of notice provided in employment standards legislation is a minimum period only and does not override the reasonable notice common law obligation. Reasonable Notice Periods • The primary factors to be considered when determining how much notice an employer should give employees are: o Character of employment – Refers whether the employee was at a high-status position in the organization. Senior, high-level positions are entitled more notice. o Length of service – a longer-term employee is entitled more notice than a shorter-term o Age – Older employees, particularly those over 50 years of age, are entitled more notice than younger employees because they have more difficulty in finding employment. o Availability of similar employment – The more employment opportunities available, the shorter the period of notice to which the employee will be entitled. Developments of Notice • Other factors that tend to lengthen notice are: o A high degree of specialization o Inducement to join an organization o Company policy o Custom and industry practice o Personal characteristics o Economic climate Risks in Dismissal with Notice • Calculation of reasonable notice is a task fraught with uncertainty. • Most courts list the factors and then state a period of notice without indicating whether one factor has been given more weight than another. • Notice periods have generally increased. • Maximum range for reasonable notice is between 18-24 months. CONSTRUCTIVE DISMISSAL • An employer has no entitlement to make a fundamental change to the employment contract without the employee’s consent. • Constructive dismissal – employer conduct that amounts to a breach of a fundamental term of the employment contract. Fundamental Change • Fundamental term – a term that is considered to be essential to the contract. • Minor changes will not
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