Study Notes for HRM 3420 Final Exam
Chapter 15 – Dismissal Without Cause
An employer does not need just cause to dismiss a non-unionized
employee. Provided that dismissal doesn’t infringe a statute, an
employer may dismiss such an employee as long as the employer
provides notice of dismissal or payment in lieu of notice.
Serious Misconduct = “just cause”, then NO reasonable notice of
termination is required
Downsizing/economic reasons ≠ “just cause”, the reasonable notice
or pay in lieu is required.
FRUSTRATION OF CONTRACT
Sometimes an employment contract might come to an end without
notice as a result of unforeseeable consequences (floods, fires,
explosions or if employee goes to jail or loses necessary license to
perform the job)
The situation is however problematic when an employer alleges
frustration of contract because of an employee’s prolonged illness.
Under Ontario Human Rights Code, the employer must accommodate a
disabled employee unless it creates an undue hardship.
Example Of Contract Being Frustrated Because Of Employee’s Physical
Demuynck v. Agentis Information Services Inc. (2003)
FACTS: Demuynck work for the employer as a clerk for 18 years. In
1996, she injured her right elbow in a fall unrelated to work. She
continued working until mid-1997, but then left work and began to
receive short-term disability benefits. Her doctor postponed the date of
return 4 times. Eventually, the employer sent her a letter of
termination, which didn’t mention frustration of the contract, but
instead was saying that the employer is undergoing a considerable
change. She was offered 12 month of pay in lieu or a “top up” of her
earnings if she became employed. She rejected and sued for damages
equivalent to 16-18 months of pay in lieu of notice.
ISSUE: whether the contract of employment became frustrated by the
employee’s physical incapacity.
DECISION: The court found that the employment contract had become
frustrated and Denuynck wasn’t entitled to wrongful dismissal
damages. Frustration of contract occurs when an employee’s incapacity of such a
nature that the further performance of employment duties is
impossible or would be radically different from what was outlined by
In determining whether a contract had been frustrated, a court is going
to consider a number of factors, such as:
1) The term of contract, including provisions relating to sick pay(if
employee can be back to work within the time of the sick days
2) How long the contract was likely to last in the absence of
sickness (indefinite v. contract)
3) The nature of employment (is the employee easily replaceable or
holding a key position)
4) The nature of illness or injury (the length of recovery)
5) The employment history (long-term relationship is not likely to be
How much notice is reasonable?
an employer must ensure that its separation package at least
meets the statutory minimum requirements set out by the
Ontario Employment Standards Act, 2000.
then an employer must assess what constitutes reasonable notice
under the common law.
Under the common law, the answer depends on the unique
circumstances of every particular case.
Bardal v. The Globe and Mail Ltd.
FACTS: At that time, Bardal disclosed to the employer how important it
was to him that the position being offered be permanent, given his
age. Once hired, Bardal advanced through the company. After 17 years
of service, the employer asked Bardal for his resignation in order to
reduce company costs. When Bardal refused to comply, the employer
sent him a letter of termination of employment without notice. Bardal
was successful in obtaining employment, albeit at a lower salary.
ISSUE: what constitutes reasonable notice, given the circumstances of
DECISION: 1 year notice for Bardal
Bardal factors to be considered when granting a separation package:
1) the employee’s age
2) the employee’s position
3) the employee’s length of service
4) the employee’s level of compensation
5) the availability of similar employment, given the employee’s experience, training, and qualifications.
The Notice Period Is Not Equivalent To Time It Takes To Find A New
Bain v. insurance Corp. of British Columbia (2002)
FACTS: 57y.o. Bain had worked as a junior manager in IT department
for 7 years when the employer dismissed him. The employer gave him
a 7-months’ pay in lieu of notice, but he sued for additional damages
and argued that he should receive 18-20 months notice due to scarcity
of IT jobs on the market during the economic recession.
ISSUE: whether the wrongful dismissal should reflect the current
DECISION: the Court held that the appropriate notice period is not
equivalent to the length of time that takes an employee to find a new
job. Economic situation is considered as one of the factors in
determining the reasonable notice period, but it should not receive
undue weight. Bain was entitled to 12 months of pay in lieu on the
basis of Bardal factors in his case.
Jamieson v. Finning International Inc. – the Court awarded an
employee a longer notice period because his job skills as a millyard
systems manager in the heavy equipment supply industry were so
specialized that there were limited opportunities for him to find similar
In 1999, the Court rejected the rule of “one month of notice for every
year of service” in Minott v. O’Shanter Development Co., stating
that it undermined the flexibility of the Bardal test by overemphasizing
the length-of-service factor.
Cronk v. Canadian General insurance Company confirmed the
principle that senior-level employees are entitled to lengthier period of
notice. (see cases document)
However, there’s one case where a lower skilled position was awarded
more than 12 months’ notice Russo v. Lawrence Park Medical
Centre Ltd. (2002)
FACTS: 67y.o. Russo had worked for the employer for 25 years as a
parking lot attendant. Upon termination, the employer provided her
with 21 weeks’ notice. She sued for wrongful dismissal damages.
ISSUE: whether the notice period was appropriate in the
DECISION: the Court held that Russo was entitled to 13 months’ pay in
lieu of notice and that lower-level employees are not bound by a 12-
month ceiling on reasonable notice. All relevant Bardal factors should
be taken into account. In this case, Russo was 67 y.o., spoke little English, was undergoing physiotherapy for an injury, and had poor
prospects for re-employment.
In addition to Bardal factors, there are a couple of other factors that
might be considered in determining reasonable notice period.
if an employer lures an employee away from a secure position, the
Courts tend to find the reasonable notice period to be longer
pregnancy is also one of the factors to be considered, since it
probably will affect an employee’s ability to find a new job.
That’s how in Ivens v. Automodular Assemblies Inc, the Court awarded
a 27-y.o. pregnant employee, who had 2 months service with the
employer as an assembler, with 8 weeks’ pay in lieu.
What’s Better For An Employer: Working Notice Or Pay In Lieu
During a working notice, an employer should provide the terminated
employee with sufficient opportunity to look for a new job.
In Kelly v. Monenco Consultants Ltd., the employer gave the
employee working notice while he was on assignment in Nigeria. The
court found that the notice was illusory because he had no practical
opportunity to look for a job until he completed his Nigerian
It maybe inappropriate to ask an employee to work through the
notice period, if the employee is terminated on the basis of
Elg v. Stirling Doors(2002) – a 54 –y.o. manual laborer after 14
years of service, was terminated because the employer felt that her
attitude was causing a decreased morale in the workplace. He gave
her an 8 weeks’ working notice. Upon being notified of termination, Elg
did little work and used every opportunity to slow production down. In
addition she verbally abused the employer. After a few days of such
work, the employer fired Elg for “just cause” of willful misconduct.
DECISION: The Court held that the employer lacked “just cause” for
immediate dismissal. Elg’s conduct was a predictable consequence of
the employer’s decision to provide termination notice, rather than pay
in lieu. Additionally, the Court found that 8 weeks’ notice wasn’t
enough to satisfy the employer’s common-law obligation. Elg was
awarded 8 months’ notice instead. Chapter 11 – Managing Employee Performance and Conduct
1) Performance Appraisals
even if a poorly performing employee remains on the job, the
employer has laid the legal foundation for dismissing an
employee with cause. The employer becomes in a stronger legal
position when dismissing an employee on performance-related
should be conducted regularly and objectively based on the
- be honest and balanced. Identify both strength and
- Clearly communicate job standards to each employee.
- Use a standard form to ensure that employees are
- Allow the employees an opportunity to respond to an
evaluation, both on the form and orally.
- Document the evaluation
- Provide employees with a copy of the evaluation and
have them acknowledge in writing that they have
received it. The acknowledgement should indicate that
an employee’s signature does not mean that she agrees
with the contents of the appraisal, simply that she has read it.
2) Progressive Discipline – the idea that discipline for less serious
infractions should be imposed in a series of increasing steps.
each of these steps must be documented. If misconduct
continues despite these disciplinary actions, an employer may
eventually be entitled t dismiss the employee for cause.
helps to avid condonation (occurs when an employer is
aware of misconduct and takes no disciplinary action within a
Daley v. Depco International Inc. – shows the value of
adopting a clear disciplinary procedures.
FACTS: Daley was 58 y.o. and had worked for Depco for 13 years
when he was fired on the basis of “cumulative just cause”. In the
previous 28 month there had been 9 documented incidents of
misconduct. Depco used a 5-step progressive discipline policy
set out in the employee handbook:
1) counseling, 2) verbal warning, 3) written warning,
4)suspension, 5) termination
The employer has document multiple occasions of serious
misconduct with the counseling methods that were applied in
every occasion. Daley sued for wrongful dismissal.
ISSUE: whether the employer had just cause to terminate Daley
on the basis of his cumulative misconduct
DECISION: the Court found that Depco had just cause. The Court
concluded that Daley’s performance fell below any reasonable
standard of conduct that his employer was entitled to expect.
“the series of acts cumulatively do amount to enough bricks to
constitute to a just cause wall”
3) Suspensions Without Pay - might constitute constructive
dismissal under the common law (even if it’s just for a few
days) because the right to work in exchange for pay is
considered as a fundamental part of the employment contract.
In Carscallen v. FRI Corp., the court found that a week-long
unpaid suspension of a marketing executive, along with several
other disciplinary measures, amounted to constructive dismissal.
In Haldane v. Shelbar Enterprises Inc., that Court stated that
the right to suspend an employee may be an implied term of an
employment agreement, but the onus is on the employer to
prove that this implied term applies in the circumstances.
if practiced as a disciplinary step, suspension without pay
should be included in the employment contract.
Lengthy Suspension Without Pay constitutes Constructive
Dismissal Reininger v. Unique Personnel Canada Inc. (2002)
FACTS: Reininger was a long-haul driver who had been employed
for more than 12 years with an above average performance
record, when he was charged with impaired driving while
operating his own car. His license was immediately suspended
for 90 days. The employer suspended him without pay for 10
months before the trial has even reached its verdict. Reininger
sued for damages in lieu of notice.
ISSUE: whether the suspension until trial constituted constructive
DECISION: the suspension constituted constructive dismissal. The
loss of drivers license affected Reininger’s ability to perform the
job, so the employer had an implied contractual right to suspend
him. The length of the suspension however was unreasonably
long, less drastic measures could’ve been taken.
4) Probation – in the absence of a contractual provision authorizing
this action, the imposition of probation may constitute a
fundamental change to the employment contract and give the
employee the right to sue for damages for constructive
5) Temporary Layoffs – has to be mentioned as one of the
contractual terms, otherwise an employee might sue for
constructive dismissal damages. (13 weeks or less under ESA)
6) Attendance Management (culpable –blameworthy act and
innocent absenteeism – legitimate reasons)
An employer may apply progressive discipline if culpable
if employee’s absence is related to “disability”, he is entitled
to accommodation from the employer, unless this constitutes an
If an employee’s absen