July 25, 2024 from Canadian HR Reporter
A recent decision by the Alberta Labour Relations Board (ALRB) has highlighted the complexities surrounding just cause dismissals and emphasized the critical importance of documentation in disciplining employees. On July 5, 2024, the ALRB dismissed an appeal by a Banff-based hair studio seeking to overturn an earlier order requiring them to pay termination pay, holiday pay, and vacation pay totaling $3,972.38 to a former employee.
The crux of the appeal was whether the hair studio had just cause to terminate the employee. The ALRB ultimately ruled that it did not, stating, “There is almost no evidence of the Respondent’s behaviour after February 26. At best, the evidence for the Appellant is a general statement that the Respondent’s behaviour had not changed. This is not sufficient to satisfy the legal onus to prove just cause.”
A Series of Incidents Leading to Termination
The employee in question was hired in 2020, but due to pandemic-related closures, his employment was intermittent. However, a series of incidents starting in July 2022 eventually led to his termination on March 20, 2023.
The first notable incident occurred on July 25, 2022, when a negative Google review about the employee prompted a discussion on professionalism with the studio owner. Later, on November 21, 2022, the employee verbally accosted a colleague, resulting in a warning about his behavior. The most significant incident occurred on February 26, 2023, when the employee had an altercation with the General Manager, during which he used offensive language. This led to a final written warning.
Despite these incidents, no further documented issues occurred between the final warning and the employee’s termination in March 2023. This gap in time was pivotal in the ALRB’s decision, as the studio’s delay in action weakened their case for just cause.
The Importance of Timing in Just Cause Dismissals
The ALRB’s decision underscores the importance of timing when an employer believes there is just cause for termination. As Alex Norris, co-chair of Carbert Waite’s employment group in Calgary, explained, “If they had terminated him the day that things came to a head or things blew up, they could have made a credible case for cause.” However, by issuing a final warning on February 26 and then waiting until March 20 to terminate the employee, the studio undermined its own case.
Norris emphasized that employers must act swiftly and decisively when they believe just cause exists, noting, “Where an employer feels that there’s cause, I think you have to act in that moment.” Moreover, she stressed the necessity of detailed and timely documentation: “Document, document, document. Even if it’s just handwritten notes… it’s always better to have contemporaneous records of what occurred.”
Clear Communication and High Standards
In addition to timely action and thorough documentation, clear communication is essential when disciplining employees. Employers should explicitly communicate the consequences of an employee’s actions, including the potential for termination. In this case, the final warning issued to the employee clearly stated that further issues could lead to termination, which played a significant role in the employer’s argument.
Norris also highlighted the high bar for establishing just cause, stating, “If you’re going to make the decision to terminate with just cause, thereby depriving the employee of advanced notice or pay in lieu of notice, you’ve got to make sure you’ve hit that high bar of either extremely egregious conduct or less serious conduct, but it’s been repeated and not improving.”
Lessons for Employers
This ALRB ruling serves as a critical reminder for employers of the challenges involved in proving just cause for termination. While it is legally possible to terminate an employee without cause for business reasons, doing so for just cause requires meeting stringent legal standards. Employers can safeguard their decisions by ensuring that they act promptly, document all incidents comprehensively, and communicate clearly with employees about the consequences of their actions.
While terminating an employee for just cause is legally complex, thorough preparation and adherence to best practices can make the process more defensible. As Norris advised, “It’s just a reminder, have good employment contracts that can limit your severance exposure, and then you don’t run into an issue where you’re trying to decide between terminating for just cause or not.”
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