Employer Wrongfully Dismisses Abusive, Harassing Manager

You are an H.R. manager, and you learn from employees that a manager has been berating, swearing, and insulting employees under her supervision.  You know of cases like Stamos v. Annuity Research, where courts have ruled that an employer that fails to properly address and put an end to harassment of employees breaches the fundamental implied contract term requiring employees to treat their employees with decency, fairly, and with civility, respect, and dignity, allowing employees to quit and sue for constructive dismissal.  So, you decide to act to stop the harassment by the manager.  What should you do?

At a Dairy Queen store in B.C., the owner decided to give the offensive manager a “letter of probation” explaining the allegations, and giving the employee 4 weeks to correct her behaviour. The case is called Rodrigues v. Sheldon Enterprises.   The day after the letter was given, the owner was told by an employee that the manager was refusing to help out at the store, was whining about the letter to customers, called the owner an idiot or moron, and  left work early without properly completing her time card.  So the employer fired her, alleging cause.
The manager sued for wrongful dismissal, seeking “reasonable notice” as well as Honda damages and punitive damages.  Should she win?
The Court ruled that she was wrongfully dismissed, but that neither Honda nor punitive damages are appropriate.
No Cause for Summary Dismissal Without Notice
The court agrees that the manager’s behaviour was extremely inappropriate.  The Court found as facts the following:

There is no doubt on the evidence before me that Ms. Rodrigues’ performance as manager of the Dairy Queen in the four or five months leading up to the probation letter was unacceptable.  Her rudeness, failure to communicate, and inappropriate supervision of staff made the workplace stressful and at times dysfunctional.
She did not hesitate to call someone stupid or use foul language to emphasize her disapproval.  Other employees were generally wary of her.  Even [the owner] was afraid to confront her directly.  They were particularly cautious in their dealings with her when she was in a poor mood.  She never attempted to hide her moods which were obvious to all other employees.

Yet, according to the Court, none of this amounted to cause for dismissal because the employer had not warned her about her behaviour and given her adequate time to improve.  Moreover, the harassment, belittling, yelling, and swearing at the employees did not amount to cause for summary dismissal, apparently because she was only acting this way to try and get the most of the employees:

the most contentious issue was the manner in which she disciplined or criticized other employees.  In taking those actions, Ms. Rodrigues was attempting to improve the performance of the employees.  Her actions, while inappropriate and unacceptable, did not amount to a repudiation of the employment contract.  Rather, her actions amounted to poor performance of the management responsibilities that she was attempting to fulfil.

Since the employer condoned the abusive treatment in the past, it could not allege cause for summary dismissal without first giving the manager appropriate time to correct her behaviour.
Assessing How Much Notice is “Reasonable”
The Court assessed reasonable notice at 16 months, based on the following reasoning:

The court must take into account all of the circumstances in determining what the appropriate period of notice should be.  This includes the age of the employee, the availability of similar work, the nature of the employment and the years of service.  Here, Ms. Rodrigues was 46 years old when she was dismissed.  She had limited education and training, which would limit her ability to find other work at a management level.  While she did find other work shortly after her dismissal, her new job is not in a management position and it is likely that she will have a difficult time working her way up to a position similar to that she held at the Dairy Queen.  Ms. Rodrigues worked for the defendant or its predecessors for 16 years.  Given her age, years of service and difficulty in finding a similar management position, I find that the appropriate notice period is 16 months.

Commentary
What’s interesting here is that the employees who were being called stupid and morons day in and day out could probably have quit themselves and sued the employer for constructive dismissal.   That puts the employer in a difficult position:

• If it responds to the knowledge of the harassment by summarily dismissing the harasser without giving her time to improve, it is breaching the harasser’s employment contract.
• But if the harassment continues, the employer may be breaching the victim’s employment contract.

The best solution appears to be in how the employer responds to the harassment once informed of it.  It must immediately step in and give a strong, clear warning to the harasser that the behaviour will not be condoned, and that if it does not cease immediately, the employee will face dismissal.  A failure to act immediately with this sort of warning may amount to condonation of the behaviour that will necessitate giving the employee more time to improve.  A failure to respond quickly with a stern warning will also strengthen the case of the victims, if they decide to sue for constructive dismissal.