Employers are often unhappy with an employee’s performance, be it in not meeting sales targets, or not being as efficient as they could be, or any other work-related reasons. This is why companies choose to lay off most employees, work concerns. But if the concerns allow the employer to avoid paying notice is the key question.
Performance assessments are tricky business
However, just because management is not satisfied with the performance of an employee, this does not mean that there is just cause to terminate. Employers must be careful when choosing to allege that someone has sufficiently deficient performance to claim just cause when terminating the employee.
From an employee perspective: it is important to know that the vast majority of performance-based cause claims are not actually legal cause. Therefore, employees are entitled to a significant notice period based on their termination.
Recent case sets out the high test required for performance assessments
For instance, in the recent case of Schmaltz v. Visions Electronics  S.J. No. 411 at par 31 the Ontario court recently stated:
“ 1. That there is no compendium of employment misdemeanours which alone or in combination will justify the summary dismissal of an employee. Each case stands to be decided according to its own facts.
2. It is not enough that an employer is displeased by an employee’s performance. There must be some serious misconduct or substantial incompetence.
3. The onus of proving the existence of just cause falls upon the employer and it must be proven on the civil standard of a balance of probabilities.
4. Where the issue is employee substandard performance, the court must be satisfied that the employer has provided reasonably objective standards of performance in a clear and understandable manner, that the employee failed to meet that standard and that termination is an appropriate disciplinary response.”
Reasonableness of the assessment is key
Therefore, each case is based on its own merits and there is a high burden on employers to show that employees were objectively falling behind based on clear standards. The key here is reasonableness. The employer must set reasonable goals and give the employee a reasonable opportunity to meet those goals. With such a high standard being required, it is not surprising that the courts often find that the employer has not met its burden and, therefore, the dismissal is not for just cause.
Conclusions for employers and employees
For employers: this means that if you are looking to introduce a Performance Improvement Plan (PIP) with the aim to either improve performance or manage an employee out of employment, it is critical to contact an employment lawyer today in order to get the best advice about how to make your PIP compliant with the requirement of reasonableness.
For employees who have been fired or might be fired because of performance issues: it is important to know that the standards are objective, and not those set by the employer. Therefore, it is always worth consulting with an employment lawyer in order to protect your rights and get what you are entitled to.
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