You are an HR manager, and you notice one of your employees sulking around the workplace and complaining about the competence of management. So you call the employee into a meeting and ask her what’s up, and the employee tells you to “f#@* off”. You speak to your lawyer, and you decide to dismiss the employee for insubordination, without notice. Did you have a legal right to do that?
These are the basic facts in a recent Saskatchewan case called Bohay v. 567876 Sask. Ltd.. A key additional fact was that the employee had 22 years’ unblemished performance with the employer as a hair stylist. The employee sued the employer for wrongful dismissal, which my employment law students know is a lawsuit in which the employee alleges she was dismissed without having been given reasonable notice. Here, the employee was given no notice, since the employer alleged it had cause to dismiss her. The Court ruled in favour of the employee.
The judge found that most of the evidence about the employee bad-mouthing the management was suspect and based on hearsay and unreliable assumptions. But there was no doubting the swearing the employee directed at the owners of the business. However, the court found that the employee was tired and stressed out, and that the swearing was an “out of character” aberration, and did not constitute cause for dismissal without notice. The Court ordered 9 month’s reasonable notice (which seems low to me for a 22 year employee), but then reduces that amount by 3 months because the employee elected to take a lower paying job at Second Cup rather than look for a job in the hair-styling industry, which may have paid her more. So sounds like the duty to mitigate your loses means that you have to search for the highest paying job that you are qualified for, even if you want to try something new (this employee claimed she wanted to get out of the hair industry).
An interesting part of this decision is the judge’s comments about the need to give an employee a warning before dismissing them for cause. The court rules that, given the employee’s long service, the employer “was required to provide a warning to the plaintiff that her behaviour must improve before she could be dismissed.” In support of this finding, the Court sites several other Saskatchewan decisions, including Riehl v. Westfair Foods (1995), in which the Court said this:
This theory, [the “corrective” theory] universally applied by collective agreement arbitrators and statutory adjudicators, requires that the employer, prior to invoking dismissal, warn the employee of his/her faults and give the employee a reasonable chance to improve. Not only does the employee obtain the benefit of a second chance, but also the efficiency of the company increases because, assuming that the worker does improve, the company will have avoided the costs of recruiting and training a replacement. Today, most courts apply the “corrective” theory in determining whether or not there is “cause” for summary dismissal in exactly the same way as do arbitrators and adjudicators ….
Therefore, it appears that in Saskatchewan at least there is a requirement for an employer to issue a warning to an employee before dismissing them for cause. This principle appears to have been borrowed from labour arbitration in the unionized setting, although the benefits of progressive discipline were also recognized by the Supreme Court in McKinley v. BC Tel.
Of course, unionized employers are also expected to use their power to suspend employees as well, as a final warning before dismissal. But in the non-union setting governed by the common law, suspensions without pay are a breach of contract (and may be treated by the employee as a constructive dismissal), unless the contract gives the employer that right (and most don’t) (see Carscallen, for example). So the tools available to an employer to employ “progressive discipline” are not identical for the unionized and the non-unionized employer in most cases.
What do you think of this case? Do you think an employer should be entitled to dismiss an employee without notice (for cause) if the employee tells the management to “F” off?