For a multitude of reasons, and in a variety of ways, things can go wrong in an employment relationship. In such situations, disciplinary action might be taken and – in some instances – discipline takes the form of termination of the employment relationship.
The status of a party (ex. employer, employee, unionized worker, manager in a unionized environment) affects not only the appropriate forum (arbitration, mediation, or workplace investigation) but also the applicable legal principles. Regardless of the forum in which the workplace problem is being addressed, and regardless of the role a party has in the workplace, a general understanding of which concepts are pertinent and how they are utilized by arbitrators, mediators, and workplace investigators is an asset.
Dealing with Discipline and Dismissal in Arbitration, Mediation, and Workplace Investigations
The opening portion of the judge’s decision in Mastrogiuseppe v. Bank of Nova Scotia, 2005 CanLII 46757 (ON SC) provides an introduction that outlines the default position of employment law:
“Absent an agreement to the contrary, an employer has the right to dismiss an employee, regardless of whether the employee is good or bad. The key issue to be determined in a wrongful dismissal action is whether the employer is or is not obligated to pay the employee salary in lieu of the notice the employer did not give.”
One area that involves “agreement(s) to the contrary” is labour law, ie. unionized environments where collective bargaining agreements typically provide a framework for dismissal. Employment contracts may also include terms outlining a dismissal process.
In situations without such agreements or contracts, advance notice of the employment relationship being terminated is required unless there is a specific and worthy reason (ie. “cause”) for immediate termination.
Wrongful dismissal, then, is said to occur when:
– improper/ insufficient notice has been provided, OR
– there is no “cause”.
How much notice is required, and what qualifies as “cause”, are each questions that involve extensive legal frameworks.
A. Determining Notice Requirements
The minimum amount of notice (ie. the “statutory minimum”) is outlined in provincial legislation (in British Columbia, s. 63 of the Employment Standards Act, RSBC 1996, c 113). In some instances, the amount of advance notice of dismissal is a term of the employment contract. To be valid, contracted notice periods can be equal to, or greater, than the statutory minimum, but not less.
If there is no employment contract, the common law applies. In these scenarios, “reasonable notice” depends on a variety of non-exhaustive factors as first set out by Ontario Supreme Court in Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC). As such, these are referred to as the “Bardal factors” and have been approved by the Supreme Court of Canada (Machtinger v. HOJ Industries Ltd.,  1 SCR 986, 1992 CanLII 102 (SCC)). The Bardal factors include (but are not limited to):
- the age of the employee when they are dismissed;
- the number of years they have worked for the employer;
- the type of work they do; and
- how available similar employment is.
At one time, courts applied a “rule of thumb” where one month’s notice was required for every year of service with the Bardal factors operating to increase or decrease the amount. This is no longer the accepted approach and most decision-makers now apply the Bardal factors alongside other potential factors in determining what is “reasonable notice” on a case-by-case basis. This approach, including the Bardal factors, was discussed and applied more recently and locally by the BC Supreme Court in Service v University of Victoria, 2018 BCSC 2027 (CanLII).
B. Determining Whether There is Cause for Dismissal/Termination
The general law regarding termination involves some variability between labour law (involving unionized workers) and employment law (involving non-unionized workers, or those who work in unionized environments but are “out of scope” of the collective bargaining agreement, ex. managers).
I. For unionized workers:
The decision of the BC Labour Relations Board in William Scott & Co. v. C.F.A.W., Local P-162, 1976 CarswellBC 518,  1 Can. L.R.B.R. 1 provides the three-step test regarding just AND reasonable cause for dismissal by asking:
- Did the employee engage conduct that triggered disciplinary action?
“(i) How serious is the immediate offence of the employee which precipitated the
discharge (for example, the contrast between theft and absenteeism)?
(ii) Was the employee’s conduct premeditated, or repetitive; or instead, was it a momentary and emotional aberration, perhaps provoked by someone else (for example, in a fight between two employees)?
(iii) Does the employee have a record of long service with the employer in which he proved an able worker and enjoyed a relatively free disciplinary history?
(iv) Has the employer attempted earlier and more moderate forms of corrective discipline of this employee which did not prove successful in solving the problem (for example, of persistent lateness or absenteeism)?
(v) Is the discharge of this individual employee in accord with the consistent policies of the employer or does it appear to single out this person for arbitrary and harsh treatment (an issue which seems to arise particularly in cases of discipline for wildcat strikes)?”
- f the conduct was NOT serious enough to warrant dismissal, but does warrant remedial action, the arbitrator then must determine what the remedial action should be. This step is unique since it allows arbitrators to reinstate fired employees.
- Five questions that analyze whether that conduct was serious enough to warrant dismissal:
II. For non-unionized employees:
The landmark decision in McKinley v. BC Tel,  2 SCR 161, 2001 SCC 38 (CanLII) sets out the guiding principles as the Supreme Court held that just cause for dismissal exists when employee conduct:
- violates an essential term of the employment contract (written or otherwise);
- breaches faith that is inherently a part of all employment relationships; OR
- is fundamentally inconsistent with employment obligations.
Importantly, the Supreme Court underlined the need for there to be a correlation between the employee misconduct and the employer response. In other words, more severe misbehaviour is required to warrant more severe punishment, such as termination. It is noteworthy that reinstatement is not an option, and damages (monetary payments) are how wrongly fired non-union employees are compensated.
C. More About Damages
“Wallace damages” are special and punitive-type of damages that are sometimes claimed in wrongful dismissal cases. Although awards for these damages are fairly seldom, Wallace damages are named for the Supreme Court case in which they were first recognized and provided (Wallace v. United Grain Growers Ltd.,  3 SCR 701, 1997 CanLII 332 (SCC), (“Wallace”)) and relate to the manner of dismissal. In other words, Wallace damages relate to the way a person is dismissed.
The Supreme Court’s rationale for Wallace damages is that employers have a “duty of good faith and fair dealing” in the way employees are dismissed (even if it is for cause) which means that employers are to be “candid, reasonable, honest, and forthright” and avoid being “untruthful, misleading, or unduly insensitive” in the way that a person is fired.
D. Progressive Discipline
Progressive discipline is another key concept in addressing workplace missteps and misconduct. Progressive discipline requires that a person be clearly warned that their behaviour is unacceptable at the time the behaviour has occurred and be provided with an opportunity to correct their behaviour. Except for the most serious types of misconduct, previous warnings and opportunities for improvement are required for misconduct to amount to cause for dismissal.
Wrongful dismissal occurs if there is no adequate reason (ie. cause) for firing an employee or if there is insufficient advance notice provided for termination. Whether or not an employee is unionized impacts how employment relationships are potentially terminated and what might amount to cause. Except for instances of serious misconduct, warnings and second-chances are required for misconduct to constitute cause (ie. progressive discipline must occur). The manner in which a person is dismissed is to be honest and reasonable – otherwise additional Wallace damages might be at issue.
Discipline and Termination in the context of labour law and employment law are often contentious, multi-faceted, and complicated situations requiring the type of specialized legal knowledge and experience offered by Neil Hain as an arbitrator, mediator, and workplace investigator. Please contact us for assistance and guidance in dealing with these scenarios at your workplace.