Just Cause – Incompetence – Poor Performance

In our previous article, we introduced the concept of “just cause” and the effect of a finding of cause on the rights of an employee in the aftermath of a termination. We pointed out that various types of conduct or misconduct may give rise to cause for termination. In the next set of articles, we will examine examples of such conduct and the tests set out by the Courts for a finding of cause. We begin with cause for termination based upon incompetence or poor performance.

Employers expect and the law recognizes that an employee is obliged to display a reasonable level of competence. At the outset of the employment relationship, an employee may also indicate his awareness of the duties and responsibilities of the position he is applying for, and his qualifications and/or the experience he possess to do the job. Under these circumstances, where it is clear that the individual demonstrates that he is not up to the task or has misrepresented his qualifications and his ability, the employer may have cause for termination.

Where the employer measures competence/performance by output or results, the outcome is often influenced by a number of factors over which the employee may have little or no control. The difficulty of finding cause in such circumstances is aptly illustrated by one commentator as follows:
“Thus, a salesman who is not achieving sales quotas will, fairly or unfairly, implicate the manufacturing department for defective manufacture or late delivery, the marketing department for poor promotion, the service department for dealer resistance, his largest customer for being the subject of a takeover and the Bank of Canada for raising interest rates. To decide whether, and to what degree, these various factors affected sales results in a particular territory would require the wisdom of Solomon. When you recall that the employer has the onus of proving just cause, take into account the natural sympathy and concern of the Court for a terminated employee and the consequence of a finding of just cause, these extraneous factors can make it next to impossible to persuade a court that acts of incompetence constitute just cause for dismissal.”

Even where an employee’s poor performance is as a result of his failure to carry out his responsibilities, just cause for termination may not exist if the employer failed to raise performance issues. Employers are obliged to advise employees if there are performance-related concerns and provide an opportunity to address them. What constitutes a sufficient warning to an employee before an employer can rely on continued poor performance as cause for termination? Courts have repeatedly indicated that expressions of dissatisfaction with an employee’s work are not enough. The employee must be advised of the standard of performance expected of him and notified that he has failed to meet that standard. He or she must be given a reasonable amount of time to improve performance and be advised that failure to do so could result in termination. One court has indicated that criticism of an employee’s performance must be constructive and will only be regarded as such where the employer has provided or offered practical guidance on how to improve.

In determining whether there is just cause for termination based on poor performance, the Courts do not treat all employees alike. A finding of cause in such circumstances will often depend on the employee’s length of service with the company, any prior history of offenses, and the quality of past performance as confirmed, for example, by performance evaluations. In other words, it will be more difficult for an employer to rely on poor performance as cause for termination where the employee has many years of service, and a generally positive performance record.

Most Human Resource departments are well versed in the steps that need to be taken to build a case for cause based upon performance. Given what is at stake, individuals facing performance-related discipline are advised to consult with a lawyer as early as possible in the process, and preferably before the other shoe drops and they are confronted with termination.