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MCS 3040 (220)
Chapter 21

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University of Guelph
Marketing and Consumer Studies
MCS 3040
Joseph Radocchia

Chapter 21 Terminating the Employment Relationship Ending the Relationship  In many cases, the employment relationship ends nicely (retirement, employee resigns to pursue other position, contract is up etc.)  Implied term in employment contracts that says employer can fire employee without notice for “just cause”  Term is subject to legislation that may give certain types of employees rights in case of dismissal  Implied term that an employer can fire employee w/ reasonable notice as well  Provincial & federal employment standards legislation provides for notice periods Dismissals for Just Cause Just Cause: Employee conduct that amounts to a fundamental breach of the employment contract  If there’s just cause an employer can fire employee without notice It’s Just cause if the employee is guilty of…  Serious misconduct  Habitual neglect of duty  Incompetence  Conduct incompatible w/ duties or prejudicial to the employers business  Willful disobedience in a matter of substance Serious Misconduct Serious Misconduct: Intentional, harmful conduct of the employee that permits the employer to dismiss without notice Progressive discipline policy: A system that follows a sequence of employee discipline from less to more serious punishment  Minor infractions may be sufficient to dismiss as serious misconduct if the cumulative effect is sufficient  1 act of misconduct may be grounds for dismissal if serious enough Condonation: Employer behavior that indicates to the employee that misconduct is being overlooked Habitual Neglect of Duty Habitual Neglect of duty: Persistent failure to perform employment duties  Important to this ground is whether warnings were issued, whether there was any excuse for the absence and whether the absence occurred at a critical time for the employer  Hard to establish lateness & absenteeism as grounds for dismissal b/c courts will decide if employee had valid excuse, whether warnings were given, time was ever made up etc. Incompetence Incompetence: Lack of ability, knowledge, or qualification to perform employment obligations.  The substandard level of performance must be evident after employee has been given a warning/opportunity to improve  Employee can give excuses – inadequate training, inexperience etc. Conduct Incompatible Conduct incompatible: Personal behavior that is conflicting with employment duties or harmful to the employer’s business.  Eg. Excepting inappropriate gifts from employer’s clients  Can be conduct outside of working hours as well Willful Disobedience Willful Disobedience: Intentional failure to carry out lawful & reasonable orders]  Employer will have to establish that instructions were given to employee that were unambiguous and that the employee had no reasonable reason for disobeying Other Causes May include harassment, disruption of corporate culture, consumption of alcohol/drugs in workplace, & drug abuse May be excused if…  Conduct was a single act  Conduct was condoned somewhat  Employee had disability Non-Cause & Near Cause  Its important to note that sometimes what seems to be a good cause for dismissal isn’t  In the absence of just cause, the employer who wishes to terminate an employee is required to give notice or pay in lieu of notice Reasonable Notice: A period of time for an employee to find alternative employment prior to dismissal  Determined in relation to factors such as age, length of service, availability of employment and the status of the employee Risks in Just Cause Dismissal  Since an employee isn’t entitled to compensation when dismissed for cause, the employee is more likely to bring suit against employer  Therefore an employer should consider these costs when dismissing an employee for cause Dismissal with Notice  An employee who has been hired for an indefinite period of time may be fired at any time without cause as long as the employer gives notice of termination (or pay in lieu)  The period of notice required to terminate an indefinite-term employement contract would either be the time period agreed upon in the contract, period specified in employment standards legislation, or reasonable notice Reasonable Notice Periods In determining how much notice to give, the primary factors to consider are: 1. Character of employment  This refers to whether the employee held a high-status position in the organization  Rational is that it takes a higher-level employee longer to find alternative employment than lower level employee 2. Length of Service  A longer-term employee is entitled to more notice than a shorter term employee  Rational is that a longer-term employee doesn’t have the same job degree or breadth of experience as an employee who has had several shorter-term jobs  Longer-term employee has a smaller range of comparable re-employment prospects 3. Age  Older employees, particularly 50+, are entitled to more notice than young ones  B/c many employers are unwilling to hire older persons 4. Availability of similar employment  The more opportunities available, the shorter the period of notice to which the employee is entitled  This may be gauged by expert opinion of job openings, advertisings etc. Developments in Notice Although the above factors are of prime importance in determining reasonable notice, it’s not a complete list. Other factors that may lengthen notice…  A high degree of specialization  Inducement to join an organization  Company policy  Custom and industry practice  Personal characteristics  Economic climate Risks in Dismissal with Notice  Calculation of reasonable notice is a task with a lot of uncertainty  Most courts list the factors & then states period of notice without indicating whether 1
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