August 30, 2021
Sometimes, when a non-union employee is terminated without cause, the employer tries to gain value for the amounts payable to the departing employee by giving working notice.
Whether or not this is a good idea depends upon all of the circumstances. If the departure is amicable, the employee is treated well, is trustworthy and not disgruntled, it can help both parties. The employer gets productivity and continuity for their money, and the employee may gave a smoother transition to their next job.
However, much can go wrong – the employee’s lingering presence may harm morale, they may steal clients or trade secrets, and they may be disruptive.
Thus, when in doubt, it may be best for the employer to bite the bullet and terminate cleanly and immediately with an offer of pay in lieu of notice.
Ogilvie v. Windsor Elms Village for Continuing Care Society is a Nova Scotia case which illustrates another risk of continued employment after termination – what does the employer do if the employee’s performance becomes unsatisfactory during working notice?
The decision suggests that termination for cause, which is difficult at the best of times, may become more difficult after giving notice.
In a nutshell, the employee was a bookkeeper, employed for about ten years in a job that had outgrown her and needed an accountant in her spot. During the notice period, the employer hoped to hire the right person. However, an audit report was received that raised new concerns about the employee’s work. The employer moved to terminate for cause based upon those concerns, even though the concerns in the Audit Report were largely resolved, with only comments left that the judge felt were not enough to constitute cause.
The judge awarded the employee full damages for what was determined to be the reasonable notice period (double the working notice) less credit for amounts paid.
Because the judge relied upon Supreme Court of Canada cases and some Ontario decisions in reaching this decision, a similar result might be expected in Ontario.
Although each case depends upon its own facts, employers should be cautious about working notice. Because proving just cause during working notice may be problematic, legal advice is always a good idea before offering working notice, and certainly, before attempting to terminate for cause.