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MCS 3040 (220)
Chapter 21

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 • An employee resigns to pursue other interest, retires, or simple leaves at the end of a fixed- term employment contract • The employment relationship can also come to an end through less pleasant means, as when the employer: ◦ Summarily dismisses, or fires, an employee ◦ Gives the employee notice of termination ◦ Acts in such a manner that the employment relationship becomes untenable • It is an implied term of an employment contract that an employer may terminate the employment relationship without any notice if there is “just cause” ◦ This implied term is subject to collective agreements and individual employment contracts, which may specify the terms for ending the employment relationship ◦ Also implied term that an employer may terminate the employment contract by giving the employee reasonable notice of the termination ◦ Provincial and federal employment standards legislation provides for notice periods and procedures on dismissal ◦ The periods of notice provided by the legislation are only minimum periods, and often employees are entitled to more notice Dismissals for Just Cause • Just Cause: Employee conduct that amounts to a fundamental breach of the employment contract • Just cause exists when the employee is guilty of one or more of the following: ◦ Serious misconduct ◦ Habitual neglect of duty ◦ Incompetence ◦ Conduct incompatible with duties or prejudicial to the employers businesses ◦ Willful disobedience in a matter of substance Serious Misconduct • Intentional, harmful conduct of the employee that permits the employer to dismiss without notice • Read pg 536 for example • Progressive Discipline Policy: A system that follows a sequence of employee discipline from less to more severe punishment ◦ A system wehreby the employer applies discipline for relatively minor infractions on a progressive basis ◦ Each step in the progression carries a more serious penalty, until the last step-dismissal-is reached ◦ Warning may be oral or in writing and should be clear and understood by the employee ◦ The employee should be advised not just about the unacceptable conduct, but also about the consequences of failure to improve • A single act of misconduct can justify dismissal if it is sufficiently serious ◦ For example: a single act of dishonesty can be sufficient grounds for dismissal, as when an employee steals a large sum of money from the employer • Condonation: Employer behaviour that indicates to the employee that misconduct is being overlooked ◦ For example: An employer who is aware of the harassing activites of an employee and who ignores or tolerates the activities will have difficulty arguing just cause for termination ◦ Occurs only if the employer is fully aware of the wrongful behaviour Habitual Neglect of Duty • Persistent failure to perform employment duties ◦ must be without the employer's permission or authorization and be more than an occasional absence ◦ Important to this ground is whether warnings were issues, whether there was any excuse for the absence and whether the absence occurred at a critical time for the employer Incompetence • Lack of ability, knowledge, or qualification to perform employment obligations ◦ employer must be more than merely dissatisfied with an employees work ◦ Must be actual incompetence ◦ The substandard level of performance must be evident after the employee has been given a warning and a opportunity to improve ◦ Employer must establish fair and reasonable performance standards against which to measure peformance ◦ AN employee can raise a number of issues to explain poor performance – inadequate training, insufficient volume of business, inexperience and condonation of performance problems ◦ A single act of incompetence is rarely grounds for dismissal, unless it shows a complete lack of skills that an employee claimed to have possessed Conduct Incompatible • Personal behaviour that is irreconcilable with employment duties or prejudicial to the employer's business ◦ For example: accepting lavish and inappropriate gifts from the employers clients ◦ Closely related to incompatible conduct is the ground for dmissal related to an employees conflict of interest Willful Disobedience • Deliberate failure to carry out lawful and reasonable orders ◦ A single act of disobedience would not ordinarily constitute grounds for dismissal, unless that act was very serious such as not attending an important meeting or refusing to follow important safety rules ◦ To rely on this ground, the emloyer would have to establish that the instructions or directions given to the employee were unambiguous and that the employee had no reasonable excuse for disobeying Other Causes • look on pg 538 • Read case on pg 539 Non-Cause and Near Cause • It is important to note that what might seem to be a good reason for terminating an employee is not necessarily just case • 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 dismissals ◦ What constitutes “reasonable notice” is to be determined in relation to factors such as age, length of service, availability of employment, and the statues of the employee • Either an employee has just cause to dismiss an employee and the employee is entitled to the full period of reasonable notice • There is no halfway position • Check out McKinley Risks in Just Cause Dismissals • Since an employee is not entitled to any compensation when dismissed for cause, the employee is more likely to bring a suit against the employer • An employer should carefully consider all of the potential costs of dismissing for cause and consider a termination settlement • An employer who determines that dismissal for cause is justified can reduce the risks considerably by ensuring the sound policies and procedures for dismissal with just cause are established and practiced Dismissal With Notice • The period of notice required to terminate an indefinite-term employment contract would be either the period agreed upon in the employment contract, the period specified in employment standards legislation or reasonable notice • The courts may justify ignoring the contractual provisions on the basis that the circumstances of the employment contract have changed or that the contract was unfair and unconscionable • Often the case that employee's are entitled to reasonable notice despite the contractual terms that provide for lesser periods of notice • 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 • Notice is a period of time to enable the soon to be terminated employee to find alternative employment • Primary factors to be considered: ◦ Character of employment ◦ Lenght of service ◦ Age ◦ Availability of similar employment Character of Employment • This factor refers to the high-status poistion in the organizations • A senior, high-level or management is entitled to more notice than a junior, non-management employee • The rationale behind this factor is the assumption that it takes a higher-level employee a longer period of time to find alternative employment than it does a lower-level employee Length of Service • A longer-term employee is entitled to more notice than a shorter-term employee • The rationale is that a long-serving employee does not have the same degree or breadth of experience as an employee who has had several shorter-term jobs • A long-serving employee has a smaller range of comparable re-employment prospects • Short-term employees, have often received notice periods well above the one-month per year of service benchmark Age • older employees are entitled to more notice than younger employees because they have more difficulty finding employment • Younger employees in their 20s and 30s are entitled only to short period of notice despite high rates of unemployment among youth Availability of Similar Employment • More opportunities available, the shorter the period of notice to which the employee will be entitled Developments in Notice • look at bardal v. global mail • Factors that tend to lengthen notice are: ◦ A high degree of specialization ◦ Inducement to join an organization ◦ Company Policy ◦ Custom and industry practice ◦ Personal characteristics ◦ economic climate Constructive Dismissals • Employer conduct that amounts to a breach of a fundamental term of the employment contract • The employer has no entitlement ot make a fundamental change to the employment contract without the employee's consent • The dismissal is not express- the employer has not said to the employee “You're fired” - but changing a key aspect of the employment contract may be equivalent to dismissal • involves demotions and pay cuts Fundamental Changes • A term that is considered to be essential to the contract • Minor change will not trigger a constructive dismissal, although the cumulative effect of many minor changes may do so • Employment contract may reserve for the employer the right to make certain unilateral changes without
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