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5 Steps to Follow After Being Fired

Being fired is a terrible emotional blow and it can often be very difficult to move on. So much of who we are as individuals arises from the jobs we hold; so much of how we define ourselves is based on “what we do” for a living.  It is not surprising that getting fired is often described as one of life’s most stressful and devastating events.

Because it is quite easy to become overwhelmed, I wanted to share my advice on how to best respond to getting fired and moving on in a positive and rewarding manner. Read more

Entitlements to Unvested Stock Options After Termination

Where stock options or restricted share units (RSUs) form a large part of an employee’s compensation, the question of whether that compensation should continue over the reasonable notice period becomes increasingly important. This article aims to answer that question by explaining the key factors the Ontario Courts consider in interpreting stock option plans and deciding whether a wrongfully dismissed employee should be compensated for those lost Unvested Stock Options.

Many employers draft stock options plans with the intention of excluding terminated employees from unvested stock options. However, the starting position, under the law in Ontario, is that dismissed employees are entitled to all the wages, benefits and other forms of compensation he or she would have received had they been working through their reasonable notice period.

Limiting Entitlement to Stock Options and RSUs during the Notice Period

Similar to how companies may limit the length of reasonable notice, or the entitlement to bonuses, during the notice period, employers can, with properly drafted policies, limit an employees entitlements to stock options or RSUs during the termination notice period.

15 years ago, it used to be a lot easier for employers to limit employees’ entitlements to stock options over the notice period. For example, in a 2004 decision of Kieran v. Ingram Micro Inc., the Court denied an employee’s claim for stock option entitlements during the notice period because the employment agreement restricted these entitlements upon termination “for any reason”. The Court concluded this language sufficiently incorporated the employee’s without cause termination.

However, more recently, since at least the Courts decision of Paquette v TeraGo, the law in Ontario holds that employees are entitled to payments unless the language limiting the employee’s rights on termination expressly excluded payment of bonuses upon an employee’s termination without cause. Specifically, in that case, the Court determined that a term that required “active employment” when the bonus is paid, without more, was insufficient to deprive an employee of a claim for compensation for the bonus he or she would have received during the notice period. While this case dealt with bonuses, not stock options, the principles are the same for both.

Read my earlier article for more information on Entitlements to Bonuses after Termination.

Stock option limitations must be clear and unambiguous.

In a recent case, O’Reilly v Imax Corporation, the Court of Appeal for Ontario confirmed that the employer is obliged to pay, among other things, damages to the employee for the loss of unvested stock options unless there is express language in an employment contract or stock option plan or similar document, limiting an employee’s right to compensation for other forms of compensation such as Restricted Share Units, Stock Options during the reasonable notice period.

Whether such “express language in an employment contract or stock option plan” exists is often subject to serious scrutiny in the Courts. Entitlements to stock options at termination but only if the language is clear and unambiguous. The enforceability of these agreements depends on the particular circumstances of each case.

Stock option limitations must be drawn to the attention of the employee.

Battiston v. Microsoft Canada Inc highlights that having a well-drafted and legally compliant contractual provision may not be sufficient. In this case, the employee was awarded damages for the stock options that were scheduled to vest during the notice period because the employer failed to bring the limitations in the stock option plan after termination to the employee’s attention at the time he accepted the terms and conditions of the stock awards.

The Court considered the termination provisions in the Stock Award Agreements as “harsh and oppressive” since they barred Mr. Battiston’s right to have unvested stock awards vest if he had been terminated without cause. As a result, the court ruled “reasonable measures must be taken to draw harsh and oppressive terms to the attention of the employee.”

So, in addition to clear and unambiguous language in agreement terms, the Courts hold that any harsh or negatively restrictive conditions contained within those documents must be explicitly communicated to the employee.

Conclusions

In summary, Canadian courts have made it clear that unless companies are extremely careful in the wording of stock option plans, these plans will be interpreted to allow employees dismissed without cause to accumulate and exercise their stock options until the end of the reasonable notice period. To avoid this outcome employers must make sure to use wording in the stock option plan that limits an employee’s right to exercise options after a certain point in time. In situations where careful and clear wording does not exist or where such limitations are not brought to the employee’s attention, Courts will interpret stock option plans against the employer and the trigger date for the termination of the options will not commence until the end of the reasonable notice period.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

All Ontario Employers Need New Employment Contracts: Court of Appeal

Due to a very disruptive decision released by the Ontario Court of Appeal last week in Waksdale v Swegon North America Inc., 2020 ONCA 391, your employment contract is probably no longer enforceable.

Waksdale v Swegon North America Inc.

Waksdale v Swegon North America Inc. was a wrongful dismissal action by employee Benjamin Waksdale against his former employer Swegon North America Inc. Mr. Waksdale was terminated without cause after working only 8 months. He sued for 6 months pay in lieu of reasonable notice.

The plaintiff’s employment contract had the following “Termination Without Cause” provision:

You agree that in the event that your employment is terminated without cause, you shall receive one week notice or pay in lieu of such notice in addition to the minimum notice or pay in lieu of such notice and statutory severance pay as may be required under the Employment Standards Act 2000 as amended. All reimbursement for business expenses shall cease as of the date of termination of your employment, however, you shall be reimbursed for legitimate business expenses that have been incurred and submitted to the Company but not as yet paid you to that date. The terms of this section shall continue to apply notwithstanding any changes hereafter to the terms of your employment, including, but not limited to, your job title, duties and responsibilities, reporting structure, responsibilities, compensation or benefits.

The employment contract also had a “Termination for Cause” provision. It was conceded by the employer that the wording of this Termination for Cause provision breached the terms of the Employment Standards Act, 2000 (“ESA”) and was therefore void and unenforceable. In what is probably the most problematic portion of this decision, neither the Ontario Superior Court nor the Ontario Court of Appeal set out the wording of the Termination for Cause provision. Accordingly, we are all left to guess at what made it unenforceable.

At trial, the lawyer for Mr. Waksdale argued that the employment contract (or at the very least both of its termination provisions) was not enforceable because the Termination for Cause provision was void.

The Ontario Court of Appeal agreed and held as follows:

An employment agreement must be interpreted as a whole and not on a piecemeal basis. The correct analytical approach is to determine whether the termination provisions in an employment agreement read as a whole violate the ESA. Recognizing the power imbalance between employees and employers, as well as the remedial protections offered by the ESA, courts should focus on whether the employer has, in restricting an employee’s common law rights on termination, violated the employee’s ESA rights. While courts will permit an employer to enforce a rights-restricting contract, they will not enforce termination provisions that are in whole or in part illegal. In conducting this analysis, it is irrelevant whether the termination provisions are found in one place in the agreement or separated, or whether the provisions are by their terms otherwise linked.

What Makes a Termination for Cause Provision Void and Unenforceable?

As I have previously written about in my article “Termination of the Employment Relationship in Ontario”, where an employer has “just cause” for termination they can fire an employee without paying reasonable notice at common law (subject to the principles of Progressive Discipline).

Examples of “Just Cause” at common law include:

  • Repeated breaches of company policy
  • Repeated Truancy
  • Violence or Harassment
  • Dishonesty
  • Insubordination

When terminating for just cause, however, employers are still required to pay ESA Notice and Severance unless that employee “has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”.

Unless your employment contract explicitly carves out a distinction between termination for Just Cause and termination for “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”, it may be void and unenforceable, as was found by the Court of Appeal in the Waksdale decision. As a result, your employment contract’s “Termination Without Cause” provision might also be found unenforceable.

Employment Contracts Post-Waksdale

The existence of the Waksdale decision is a serious liability for Ontario employers. Previously, little attention had been paid to the enforceability of the “Just Cause” provisions. From now on, that will no longer be the case. In my experience, very few employment contracts that come across my desk draw the distinction between Just Cause and “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”.

As a result, the majority of employment contracts in Ontario need to be amended and updated. Otherwise, employers risk their termination provisions being unenforceable, which means they will owe employees common law reasonable notice. Common law reasonable notice often works out to months or years of notice rather than weeks under the ESA.

Waksdale Raises More Questions

While the Ontario Court of Appeal has made up its mind on the effect of poorly drafted Without Cause provisions, the Waksdale decision raises other important questions concerning employment contract more generally: if other terms of an employment contract breach the ESA, what is the effect on the enforceability of the termination provisions? For example, what if your employment contract provides for less than the minimum vacation entitlements, does that invalidate your termination provision?

This is a problem because, in Waksdale, the Court of Appeal stated “the correct analytical approach is to determine whether the termination provisions in an employment agreement read as a whole violate the ESA”. The Court also explained that “an employment agreement must be interpreted as a whole and not on a piecemeal basis”.

Whatever the answer to that question is, there is no doubt that employees now have another arrow in their quiver when challenging employment contracts— and employers face yet another risk when terminating an employee.

Employers Need New Employment Contracts

In conclusion, employers need to update their employment contracts. Doing so is inexpensive and pays substantial dividends at termination time. As noted, the difference in notice period, for an employee with an enforceable termination provision versus one without, can be months or years of pay.

If you are interested in learning how to implement new or update employment contracts, read my article, How to Change Employment Contracts.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.

The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Constructive Dismissal: A Good Reason to Quit

What is Constructive Dismissal?

“Constructive Dismissal” is defined as a substantial and unilateral change to the terms or working conditions of employment. In other words, a constructive dismissal describes situations where, although an employer has not directly fired an employee, its actions or its failure to address issues, leaves an employee feeling like they have no choice but to resign. Another way to think about constructive dismissal is that it arises when an employee has a good reason to quit their job.

A relocation of the workplace from Toronto to India is a clear example of a substantial change. The determination becomes more nuanced and complex, however, in less obvious situations. For example:

  • Where an employee is moved from a salaried position to one based on commission; or
  • Where an employee is being transferred from a non-customer facing role to one that requires them to interact with customers regularly, although at the same rate of pay.

What makes a change “substantial”?

As you may have guessed from the definition of constructive dismissal, when deciding whether an employee has been constructively dismissed, the Courts have to decide whether the change in employment was “substantial”.

Determining what is a substantial or fundamental change to an employment agreement depends on facts and circumstances. The burden to prove that the facts and circumstances amount to a substantial change in employment is on the employee.

To provide guidance on the meaning of substantial in the context of a constructive dismissal, this article will look at the three situations in which constructive dismissal can occur:

  1. Where there is a change to some or all of the terms of employment (i.e. salary, hours of work, location, role, responsibility, etc.);
  2. Where the workplace becomes unsafe, hostile or toxic (i.e. a change in working conditions); and
  3. Where multiple small changes taken together become a substantial change.

Constructive dismissal due to substantial changes to the terms of employment.

In the eyes of the Court, employers are generally entitled to make minor unilateral amendments to employment terms when those changes are reasonable and/or contemplated as part of the employment agreement. The Courts do recognize that employers should be allowed some flexibility in structuring jobs as part of their authority in managing the business.

In deciding whether the change is substantial, the Courts apply an objective legal analysis. This means it doesn’t matter what the employee believes happened. The Court looks at the facts and circumstances and asks if a reasonable person in the employee’s shoes would find that the terms of employment had been significantly altered by the employer. They consider the nature and extent of the changes with specific attention and consideration to the intention of the parties at the time the employment contract was formed.

To prove constructive dismissal, the key is to be able to demonstrate that the change(s) were severe enough that a fundamental part of the agreement was altered.

Examples of Changes to Employment Terms

Some of the “substantial” changes taken by employers might look like:

  • a demotion;
  • a change to the employee’s reporting structure or job responsibilities;
  • a reduction to an employee’s compensation of more than 10%;
  • a change to an employee’s hours of work from day shift to a night shift; or
  • relocating the employee’s workplace resulting in a drastically increased or unreasonable commute.

Another example of a substantial change could be an unpaid suspension or layoff. As I discussed in more detail in Temporary Layoffs: What Everyone Needs to Know, employers are not allowed to layoff employees when it isn’t a written term of their contract or a standard industry practice. Accordingly, being laid off in almost every instance is a constructive dismissal.

Constructive dismissal due to unsafe, hostile or toxic work environment.

Employers are required to provide a safe and healthy work environment and that obligation is legally regulated through Ontario occupational health and safety legislation. An unsafe or unhealthy work environment may result in an employee being constructively terminated.

In cases of poor work environments, the Court will consider the facts and circumstance and apply an objective test. Is the workplace so unsafe, hostile or toxic that a reasonable person would not be expected to return? If the answer is yes, then the employee was constructively dismissed.

The following are some of the factors that will be considered to determine if constructive dismissal has occurred:

  • The serious wrongful behaviour is evident and its nature is such that it renders continued employment impossible;
  • The serious wrongful behaviour has been persistent or repeated;
  • The test applied is objective – that is, it is confirmed that someone in the employee’s shoes would consider the environment poisoned

Examples of unsafe, hostile, or toxic workplaces.

A good example of a toxic work environment is one in which the employer fails to prevent workplace harassment or bullying. Other examples include workplaces where unjustified criticism or vague and unfounded accusations of poor performance (especially by persons of authority) exist, a culture where sexism or racism is tolerated (if not actively encouraged), or where an employee is subject to extreme stress and unreasonable expectations or demands.

Multiple Small Changes Overtime May Constitute A Substantial Change to Employment

Although minor changes will not amount to constructive dismissal, a series of small changes might. The key is that the extent of the changes made to the terms of employment must add to a total change that is substantial or makes the employee feel that the employer is trying to have them quit.

For example, an employer might make a minor reduction in salary in January, then reduce employee benefits in March, then a small reduction in hours in April, perhaps then a restructuring to change an employees role to have less overall responsibility in July.. The total effect of those changes may add up to a substantial change to the terms of employment.

Employee’s Options In the Face of Substantial Unilateral Changes in Employment

An employee’s options in the face of a potential constructive dismissal are set out by the Ontario Court of Appeal in a case called Wronko v. Western Inventory Service Ltd. (which I’ve written about before in How to Change Employment Contracts). Those options are:

  1. Accept the change in the terms of employment, either expressly or implicitly through apparent agreement, in which case the employment will continue under the altered terms;
  2. Reject the change and sue for constructive dismissal if the employer persists in treating the employment relationship as being subject to the varied term; or
  3. Make it clear to the employer that they are rejecting the new term and insisting on the original terms of employment.

If an employee decides to continue to work under changed conditions, they may not be able to bring the matter to the courts at a later date. This legal principle is called condonation. If an employee condones the change through conduct, then they have implicitly accepted the change.

Risks on Employees

Usually, to claim constructive dismissal the employee actually has to quit and then sue. In this respect there is always a risk to the employee who makes a claim for constructive dismissal. If the employee is not able to prove that they have been constructively dismissed, then they will be found to have resigned from their employment. Having resigned, the employee will not be entitled to any damages for wrongful dismissal.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Temporary Layoffs: What Everyone Needs to Know

Temporary layoffs are an attractive option for employers facing economic downturn, business or financial troubles, or a global pandemic like COVID-19. While it may appear to be a good way to eliminate staff without paying termination pay or severance, there are many misconceptions that both employers and employees have.

This article aims to help you understand everything you need to know about temporary layoffs under Ontario employment law and should be used as a guide whether you are a business owner considering laying off staff or an employee who was laid off.

Temporary Layoffs Are Not Allowed for Most Employees

The first and most important thing to understand about temporary layoffs is that in most situations they are not allowed. There is no implied right to layoff an employee. Even though the ESA provides guidelines concerning the maximum length of a temporary layoff, the Ontario Courts do not permit an employer to layoff, or suspend an employee, without pay, unless:

  1. It is one of the written terms in the employment contract; or
  2. The layoff or suspension was agreed to by both employee and employer—this agreement can take the form of a written contract, a well-communicated policy or indirectly through a widely known practice within your employer’s organisation or industry (i.e. seasonal workers, construction industry, etc…).

Any layoff (even a temporary one) that doesn’t meet the above test is a constructive dismissal. The foundational case on this issue is Stolze v. Addario, 1997 CanLII 764, by the Ontario Court of Appeal, in which the Court wrote:

… the absence of evidence of a policy or practice within the employer company of laying off “key” employees, constitutes the lay-off a repudiation of a fundamental term of this employee’s contract. He was, therefore, constructively dismissed.

Read my earlier article Termination of the Employment Relationship in Ontario for more information.

Only if the employer makes it over this first and difficult hurdle, does the law concerning temporary layoffs become relevant.

What is a Temporary Layoff?

A temporary layoff is when a employee’s hours are reduced or eliminated on a short term basis with the intention that they will shortly be recalled. At the time an employee is laid off, an employer is not required to provide a specific recall date, however, if they do, they must generally comply with it.

The maximum length of a temporary layoff is specifically defined in the Employment Standards Act (“ESA”). If an employee’s layoff lasts even just one day longer than the specified time set out in the ESA, then the employee has been terminated retroactive to the first date of the layoff. As a result, that terminated employee is entitled to pay in lieu of notice and severance. 

The definition of temporary layoff according to the Employment Standards Act is as follows:

What constitutes termination
56 (1) An employer terminates the employment of an employee … if, …

(c) the employer lays the employee off for a period longer than the period of a temporary lay-off.

Temporary lay-off
(2) For the purpose of clause (1) (c), a temporary layoff is,

(a) a lay-off of not more than 13 weeks in any period of 20 consecutive weeks;

(b) a lay-off of more than 13 weeks in any period of 20 consecutive weeks, if the lay-off is less than 35 weeks in any period of 52 consecutive weeks and,

(i) the employee continues to receive substantial payments from the employer,

(ii) the employer continues to make payments for the benefit of the employee under a legitimate retirement or pension plan or a legitimate group or employee insurance plan,

(iii) the employee receives supplementary unemployment benefits,

(iv) the employee is employed elsewhere during the lay-off and would be entitled to receive supplementary unemployment benefits if that were not so,

(v) the employer recalls the employee within the time approved by the Director, or

(vi) in the case of an employee who is not represented by a trade union, the employer recalls the employee within the time set out in an agreement between the employer and the employee;

If the specific requirements for a layoff to be considered “temporary” are not met than that layoff is a termination. In a nutshell (and explained in more detail below), if your layoff lasts longer than the temporary layoff time periods or does not meet any of the conditions set out above, the employer is considered to have terminated the employee’s employment. The employee will therefore be entitled to termination pay, severance or damage for wrongful dismissal

Temporary Layoffs of More than 13 Weeks but less than 35 Weeks

A layoff more than 13 weeks but less than 35 weeks, can only be considered temporary where at least one of the following conditions are met:

  1. The employee continues to receive substantial payments from the employer;
  2. The employer continues to make RRSP, pension plan, or group health and/or dental insurance plan contributions;
  3. The employee receives supplementary unemployment benefits (or would be entitled to receive this benefits if not for the employee having alternative employment during this period); or
  4. the employer recalls the employee within the time approved by the Director.

Ongoing “Substantial Payments” or Benefit Plan Contributions by Employer

The payments contemplated under 1 and 2 need to have been made throughout the entire period of the temporary layoff in order to satisfy this condition. If the employer did not make regular and on going payments during the first 13 weeks of the temporary layoff or stopped making payments at any time, this condition is not satisfied.

The term “substantial payment” is not defined and will likely depend on any individuals particular employment circumstances. Employers and employees should consider getting legal advice on this requirement because it will be highly case specific.

With respect to benefit plans, specifically, the terms of the plans provided by the employer must be the same as before the layoff began (unless the employee specifically agreed to an amendment to the plan or the amendment was made for a legitimate cause such as a legislative change). Employers cannot drastically cut benefits and then continue making the reduced payment in an attempt to get around this requirement.

Supplementary Employment Benefit (SUB) Plans

The Government of Canada offers a program called the Supplementary Unemployment Benefit Plans (SUB Plans) that provides employers with the ability to set up and provide additional financial assistance to employees during a period of layoff due to temporary stoppage of work, training, or illness, injury or quarantine.

If an employer has a SUB plan, employees will likely already know about it. This plan provide to employees a top up of some amount over and above EI. For more details consider the Government of Canada’s Guide to Supplementary Employment Benefit Program.

Approval by Director of the Ministry of Labour

In special circumstances the Director of the Ministry of Labour can provide exceptions to certain employers. Employers would be obliged to inform their employees.

Other Frequently Asked Questions

How do employees recall temporarily laid off employees?

During a temporary layoff, an employer upon notice to their employee, can set a recall date requiring the employee to return. Typically, this is done by the employer providing a “recall notice” informing the employee of the return to work date.

What happens if an employee is recalled in a situation where the layoff was wrongful or not temporary?

If an employee is provided with a recall date that either (a) falls outside or afoul of the temporary layoff provisions in the ESA, or (b) in the course of a layoff that was never permitted in the first place, then the employee has two options:

  1. Return to work and abandon his claim to termination pay, severance pay and/or damages for wrongful dismissal; or
  2. Refuse to return to work and claim constructive dismissal,

Only in rare circumstances are both options available. If an employee refuses to return to work and claim constructive dismissal they would be obliged to comply with their Duty to Mitigate.

What happens if an employer is unable to recall an employee during a temporary layoff? 

If an employer is unable to recall the laid off employee for any reason, even if doing so was unintentional or through no fault of their own, the layoff becomes a termination and the employee is entitled to termination pay, severance pay and/or damages for wrongful dismissal.

What if an employee’s job is no longer available?

Generally, an employee should be recalled to the job they had before the layoff. However, if the job is no longer available, the employee must be given a similar or comparable position with the same or greater benefits and pay.

What if an employee refuses to return after a temporary layoff?

Employees are considered employed during a temporary layoff and, therefore, are required to return upon being recalled by their employer. A refusal to return may be considered job abandonment.

What about temporary layoffs for unionised workers?

The above legal information is generally applicable only to non-unionized employees. If you are in a union you need to speak with your union representatives.

What about temporary layoffs because of COVID-19?

The COVID-19 pandemic is novel and unprecedented. While it may not have an effect on the current law, it is important to understand that there is no way to know for certain how Ontario employment law might change or how the Courts may react. If you are facing a particular employment issue because of COVID-19, you should speak to a lawyer. 


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Termination within Probation Periods

Probation at the start of employment may seem simple, but they don’t always automatically allow employers to fire someone in their first 3 months free and clear. Probationary periods are actually legally intricate.

Employees terminated during probationary periods often accept their fate without seeking legal advice when in many cases they may be eligible for severance payments (even severance payments of several months or more). Likewise, employers may dismiss an employee within a probationary period only to be surprised and unprepared when they’re told termination pay for wrongful dismissal is owed.

Purpose and Effect of Probation Periods

The reason for probationary periods in employment contracts is to provide a safeguard to employers. It allows an employer a period of time to assess a new hire on their suitability for the role. This benefits employees to the extent that an employer may be more willing to take a chance on an employee they are not certain about, if they have a period of time to change their mind without consequence.

The Ontario Employment Standards Act (“ESA“) does not define probation or probationary period. Instead, it allows an employer to terminate an employee without cause in the first three months of employment, without notice or pay in lieu of notice. It frequently doesn’t matter, therefore, for the purposes of the Employment Standards Act whether an employment contract contains a probationary clause (although it is important that the probationary clause does not provide for less notice than the minimums required under the ESA). If an employee is employed less than 3 months, under the ESA, he or she gets no ESA notice. If an employee is employed 3 months or more they are entitled to ESA notice. The existence, or lack thereof, of a probationary clause doesn’t change this.

The true purpose of a probationary period in an employment contract is to rebut the common law rule that employees are entitled to reasonable notice.

It may come as a surprise to some that even if you’ve been employed for a single day (or even if you haven’t started yet), the Courts have declared that terminated employees are entitled to some form of notice or pay-in-lieu of notice. In fact, recent trends in case law, suggest that short term employees (people employed only a few months) may be entitled to even more notice. A properly drafted and enforceable probationary clause may rebut this presumption and disentitle employees on probation to notice.

Termination within Probation Periods

In order for an employee to be subject to a probationary clause it generally must be:

  1. expressed (in writing) – the courts will not imply the existence of a probation period;
  2. it must be neither vague or ambiguous; and
  3. it must not provide for less notice than the minimums set out in the ESA

Further, and most critically, in order for an employer to be relieved from paying reasonable notice to the terminated probationary employee, it must act in good faith. This means that it must have provided the employee with a fair opportunity to demonstrate their suitability for the role and acted fairly in determining that the employee was unsuitable for the role.

Suitability

Defining “suitability” can be challenging. The Courts recognise that assessments of probationary employees involve the consideration of factors that are intangible and subjective. As a result, they often extend wide discretion to employers. Overall, the grounds used to establish unsuitability must be reasonable and must demonstrate that employees are given a fair chance to meet the requirements of the job.

Example of factors that may be taken into consideration to determine suitability of a probationary employee are as follows:

  • Performance
  • Attitude and compatibility
  • Capability and skill
  • Capacity to meet future production requirements

Clear and Unambiguous

Courts pay strict attention to the wording and language of any probationary periods. They must be clear and unambiguous. The court will not likely imply a probationary clause from the contract term “employee performance will be reviewed after three months”. However, in at least one case, the Ontario Court of Appeal concluded that the clause “Probation… six months” was enforceable and that the word “probation” in that case had a clear and unambiguous meaning that the employer could rely on to limit the employee’s notice. See for example: Nagribianko v. Select Wine Merchants Ltd., 2017 ONCA 540 (CanLII)

Best Practices for Employers

Best practice is for an employer to take steps to document the specific actions taken to determine suitability or unsuitability. Employers should:

  • Communicate the expected reasonable standards;
  • Inform the employee of any deficiencies as they arise;
  • Explain that any failure to address and try to improve deficiencies will result in termination of employment at the end of the probation period; and
  • Provide the employee with a chance to show that they tried to improve.

The important thing for employers to do, is to honestly treat the probationary period as a time for evaluation and training. The employer should work with the employees on a regular basis to determine if they can be transitioned into the role successfully. Actions taken to carefully assess, advise and remedy performance issues should be evident. Any decision about dismissal should not be made at the last moment, give regular performance review so that a decision to terminate prior to the end of the probationary period isn’t a surprise to anyone.

If you are interested in learning how to update your employment contracts to include a probation period, take a look at my article “How to Change Employment Contracts” or feel free to contact me.

Tips for Employees

Anyone terminated from their employment, whether within a probationary period or otherwise, should seek legal advice. 


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

COVID-19’s Effect on Reasonable Notice of Termination

COVID-19 is having significant economic impacts on both employees and employers. Mass layoffs are happening across Canada despite government initiatives to avoid them. Many employers are considering staff cuts to remain profitable. While terminating employment for legitimate business reasons (such as a downturn in the economy) is lawful, generally speaking, an employee terminated in these circumstances is entitled to reasonable notice of termination, or pay in lieu of notice.

What is Reasonable Notice?

Courts require employers to give terminated employees “reasonable notice” or pay in lieu of notice upon termination.  Such notice is based on a variety of factors to assist the employee in finding comparable employment.

In doing so, the courts consider the following criteria:

  1. The character of employment. For example, general labourer, middle manager, executive, professional, technical worker, etc.
  2. The length of the employee’s service. Employees are generally entitled to a longer notice period the longer they have been employed.
  3. The employee’s age. Employees close to retirement are generally entitled to a longer notice period.
  4. The availability of comparable employment.

For more information in general see my earlier article “How much notice/severance should I get after being fired?“.

Reasonable Notice in a Poor Economy

The state of the economy can influence the availability of comparable employment and, in turn, can likewise affect the length of reasonable notice awarded by courts.

There are arguments on all sides as to how a general economic downturn should affect the reasonable notice period. Employees argue that it should be increased because they may have more difficulty finding new employment when jobs are scarce. Employers argue that they do not have the financial resources to provide employees with a longer notice period, and the pay and benefits that go with it.

Generally, courts in Ontario have favoured employees:

  • They have often sided with employees that an economic downturn should extend the notice period. For example, in Zoldowski v Strongco Corporation (“Zoldowski”), the Court increased the notice period in part because of the “economic climate of Southern Ontario and particularly the GTA”, and its impact on the employee’s ability to find alternative employment.
  • They have rejected the idea that a specific employer’s economic difficulties are a basis for reducing the reasonable notice period. In Michela v. St. Thomas of Villanova Catholic School (“Michela”), the Court of Appeal rejected this argument, reasoning that the “character of employment” factor was about the nature of the employee’s position, not the employer’s finances. While those finances may be the reason for the termination, “they justify neither a reduction in the notice period in bad times nor an increase when times are good.”

Nevertheless, COVID-19 may have a Different Affect on Reasonable Notice

Despite its decision in Michela, the Court of Appeal left open the possibility that a more general economic crisis may limit the reasonable notice period by approving and referencing the following passage in a 1982 High Court decision, Bohemier v. Storwal International Inc. (“Bohemier”):

It seems to me that when employment is unavailable due to general economic conditions, there has to be some limit on the period of notice to be given to discharged employees even if they are unable to secure similar employment within the notice period.

The reasoning in Bohemier suggests that, where there is a general economic downturn, evidence of difficulty finding a job cannot be used to extend a notice period as was done in Zoldowski. Employers may still have to provide a lengthy notice period based on the other factors, but not one that is unreasonable in the circumstances of the broader economy.

As a result, it is unclear how the general economic conditions created by COVID-19 will affect the reasonable notice period.

While employers ordinarily have difficulty relying on their financial hardship to reduce an employee’s notice period, COVID-19 is posing new legal challenges and how the law may evolve in the face of them is uncertain.

What is certain, however, is that we have entered unprecedented times. As always, we recommend that employers avoid premature layoffs or terminations without first seeking legal advice and understanding the consequences of those decisions.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Bonus After Being Fired

Businesses often refuse to pay a bonus after an employee is fired, but, in some cases, the law in Ontario requires them to. Employers need carefully drafted bonus policies if they wish to avoid this obligation and employees need to know when to fight for their bonus after being fired, laid off or terminated.

Determining Whether a Bonus is Owed

The established legal test for determining an employee’s entitlement to damages on account of a lost bonus was set out by the Ontario Court of Appeal in Paquette v TeraGo Networks Inc. (“Paquette“).

In Paquette, the Court of Appeal judge noted that the motion judge’s analysis focused only on the wording of the incentive plan.  The Court of Appeal judge stated that the motion judge should have focused on whether the wording of the plan was effective to limit his right to receive compensation for lost wages (including both salary and bonus) during the period of reasonable notice.

The legal test involves consideration of the following questions:

  1. Was the bonus an integral part of the employee’s compensation package, thereby triggering a common law entitlement to damages in lieu of bonus? and
  2. If so, is there any language in the bonus plan that would restrict the employee’s common law entitlement to damages in lieu of a bonus over the reasonable notice period?

The Court relied upon the basic principle of damages for wrongful dismissal that the employee should be in the position that he would have been, had he not been wrongfully terminated. Based on this, the Court found that the employee would have received the bonus and the requirement that he be actively employed could not limit his right to the bonus, because the reason he was not working was the employer’s wrongdoing in terminating the employee.

Language In the Contract and Bonus Plan Matters

Bonus plans can be effective in restricting an employee’s entitlement to bonuses in some cases but not in all cases. The plans must be carefully drafted so that they contain clear and unambiguous terms because courts are increasingly applying detailed scrutiny to their language and wording when determining entitlement.

The language must be very clear and state restrictions to entitlements in very definite terms – with no ambiguity. For example, the commonly used restrictive clause “employee must be actively employed” or engaged in “active employment” can be interpreted in different ways. Whether an employee is actively employed during the reasonable notice or statutory notice period is not always clear.

In another case, Kielb v National Money Mart Company (“Kielb”), an employee had signed an employment contract that contained a bonus plan limitation clause that stated the bonus would not accrue and was only payable on the payout date.

The employee argued that this limitation clause was unenforceable due to its ambiguous and contradictory nature and because it contravened the Employment Standards Act. The trial judge rejected these arguments. He found the limitation clause to be unambiguous. Read in its entirety, it was clear that if the bonus payout date had fallen within the notice period, then the employer would have been obliged to honour it. Upon appeal, the Court of Appeal agreed that the language disentitled the employee . 

A Bonus Limitation Clause Needs to be Brought to the Employee’s Attention

In 2019, the Court of Appeal seems to have held that not only does a bonus limitation clause need to be clear, enforceable and unambiguous, it may also need to be brought to the workers attention.

In Dawe v The Equitable Life Insurance Company of Canada (“Dawe“), an employee was terminated without cause after 37 years of service. He sued for wrongful dismissal.  The restrictive term provided that in order to participate in the plan, an employee “must be in the employ of the company at the time” the pay is processed.  The employee alleged that he was never made aware of the change to his entitlements.

The motion judge found that the employee was entitled to his bonus for the notice period because it was an integral component of his compensation and the terms of the plans did not displace his common law entitlement. The employer appealed the motion judge’s decision to the Court of Appeal. Although the Court of Appeal ultimately agreed that the language in the contract and bonus plan effectively limited the employee’s bonus entitlement after termination, the Court of Appeal did not overturn the motion judge’s decision. The Court found that there was insufficient proof indicating that the employee fully appreciated the impact of the clause on his bonus entitlement after getting fired. 

The Final Word on Bonuses after Termination

The Ontario Courts are concerned that employees know clearly what their rights are on termination. In this regard, their is an emphasis on the words used in the employers contracts and policies. Whether an employee is entitled to payment of their bonus after being terminated is difficult to know with any certainty for laymen and laywoman. This area of the law is currently in flux. The Supreme Court of Canada is currently opining on this issue and the law could change with their next decision.

While I ordinarily try to avoid shameless plugs, legal advice is critical in these circumstances and should be sought out.

Suggested recommendations for employers:

  • Keep in mind that, if there is nothing that states otherwise, employees are entitled to bonus payments during the period of reasonable notice. As well, even if there is a contract or policy that says otherwise, it may not be enforceable, particularly where the result is harsh.
  • The use of clear, unambiguous language is critical but is difficult to achieve in practice. Seek legal advice when drafting employment agreements, especially when including limiting language. The courts have clearly shown their willingness to rule against employers where there is any ambiguity.
  • Structure compensation packages for new hires such that the bonuses are not an integral part of compensation, as well as including limiting language.
  • Stipulate within the bonus plan that employees have no entitlement to bonuses during periods of reasonable notice. This limiting language must be clear and unambiguous.
  • Create and practice a fair and clear process when assessing entitlements to a discretionary bonus for the period up to an employee’s dismissal. 
  • Conscientiously document performance issues or other issues that may influence bonus eligibility as per applicable bonus policies or employment contracts.

Suggested recommendations for employees:

Employees need to recognise the importance of understanding all terms of their contract before signing it. Suggested course of actions for employees include:

  • Employees should not make assumptions as to whether or not they are entitled to bonuses, particularly where they have accrued. 
  • Employees need to take proactive steps to seek advice before signing any agreements.
  • Bargain for better terms in contracts before signing them.
  • Explore bonus claims even if the bonus plans appear to preclude them from payment

The bottom line is that there continues to be uncertainty regarding the rules around assessing an employee’s right to a bonus after dismissal. Courts strictly scrutinise wordings of bonus plans and employment contacts as part of their decision processes. In the end, employers need to ensure that their bonus policy includes clear, unambiguous language regarding the entitlements of employees upon dismissal.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Negotiating Maximum Termination Pay and Severance Pay

Often, people who lose their job assume that if they receive any termination pay, severance pay, or pay in lieu of notice then they must have been properly compensated for being fired. This is far from the case. There are many factors and considerations a person should be aware of when figuring out what their termination entitlements are and more often than not an employment lawyer can help them get what is fair.

Statutory Minimum Notice Periods VS Common Law Notice Periods

Upon being fired, an employee is entitled to receive either (1) working notice, or (2) pay-in-lieu of notice. Working notice is not unusual but more often than not an employee is unhappy about being fired and an employer is concerned that the employee may do something to hurt the employer’s business while working to the end of the notice period. For that reason, employers usually chooses to terminate the employee immediately and, provide pay in lieu of notice.

The Employment Standards Act contains only the minimum entitlements that employees must receive on termination. Likewise, the Canada Labour Code sets out the minimum notice periods and severance entitlements for federally regulated employees (i.e. banking and telecommunications). However, just like the minimum wage, most employees should get a lot more than the minimums.

Judge made law or otherwise the law made by the Courts is called the “common law”. It entitles most employees to “reasonable notice”. Reasonable notice is much greater than the statutory minimums. Employees default to getting common law reasonable notice, unless they have a written employment contract that says otherwise.

There is no set formula to calculate common law notice. Generally, it is accepted that the average short-term employee is owed three to six months of notice, a long-term employee in a senior position may be owed up to 24 months or more, and somewhere in the middle for the other lengths of employment. How senior the employee’s position is will also be a factor. For example, a vice president or manager may be entitled to higher pay in lieu of notice that an employee doing a low level job, even for the same length of time. The employee’s age and the availability of alternative employment are also factors the Courts consider.

You can learn more about ‘Reasonable Notice’ and what the appropriate length is for different employees in my earlier article on “How much notice/severance should I get after being fired?.”

Termination Clauses

A termination clause in an employment contract alters an employee’s entitlements to common law reasonable notice. While it could technically provide for more, more often than not, employers include termination clauses to limit what an employee would otherwise get after being fired. Termination clauses cannot limit entitlements to below the minimums.

Where there is a valid and enforceable termination clause, an employee would not be successful if they attempted to seek more in a wrongful dismissal action. Fortunately, the Courts are often persuaded to strike out termination provisions. There are a number of different reasons that a court might find a termination clause unenforceable, such as pressure being put on the employee at the time of signing of the contract or where the limits on the severance pay are less than the minimums. If the termination clause is successfully struck out common law notice applies.

An experienced employment lawyer can offer advice on options on how to deal with terminations — for example whether one should sue for wrongful dismissal or alternately file a claim for termination pay or severance pay with the Ministry of Labour. It should be noted that a person cannot do both – sue for wrongful dismissal and file a claim for termination or severance pay. Seeking legal advice on rights is recommended to make the right decision. An employment lawyer can also help ensure payments for common law notice are maximized either through court action or a negotiated settlement.

When are termination clauses unenforceable?

In Movati Athletic Group v Bergeron, an employee had worked for about 16 months before she was terminated without cause. Purporting to rely on the termination clause in her contract, the company gave her the minimum entitlements under Ontario’s Employment Standards Act, 2000 (ESA). The employee claimed damages for wrongful dismissal arguing that the termination clause in her employment contract was not clear enough to rebut the presumption that she was entitled to common law reasonable notice of termination.

The court found the termination clause not clear and as a result, the employee received three months’ pay in lieu of reasonable notice of termination instead of her statutory minimum entitlements. This case illustrates how important it is for employers to make all efforts to expertly craft termination clause wordings and how important it is for employees to have their employment contracts checked by a lawyer before deciding whether it is actually enforceable.

A court will not enforce a termination clause that excludes minimum statutory entitlements upon dismissal as set out in the ESA or Canada Labour Code. It is illegal for an employer to provide less than the minimum standards of the ESA or Code, even if the employee has voluntarily agreed to accept a lower amount. Additionally, a court will not enforce a termination clause if it has not been properly drafted. Poorly drafted clauses are very common and any ambiguity in the language in the termination clauses usually acts against the employer.

Termination Provisions must use the clearest possible language when trying to limit an employee’s rights upon termination. Failing to use explicit language leaves the door open for varying views and interpretations of intention and, therefore, the clause may be set aside by a court for ambiguity.  Courts resolve drafting ambiguities in favour of employees.

Laws on termination clauses continue to evolve. It is important to keep abreast of changes and consult with employment lawyers when employers are drafting clauses or when you, an employee, are terminated


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.

Discipline at Work in Ontario

Being fired or getting terminated for “just cause” is only one form of discipline available to Ontario employers. Often, though, termination for cause is too harsh in the circumstances and therefore not available as an option. It is important for both employees and employers to understand what other types of discipline are available and how to act in accordance with the principles of “progressive discipline”.

This article will be focusing on discipline in the workplace aside from termination. For more information on termination see one of my earlier articles: Termination of the Employment Relationship in Ontario » Legally Speaking.

What is Progressive Discipline?

Progressive discipline is a process used to deal with any job-related behaviour that does not meet expected and communicated standards or policies regarding job performance, absenteeism or lateness, or other minor misconduct. The primary purpose of the progressive discipline doctrine is to help an employee understand that a performance problem exists and to offer opportunities for improvement. The concept behind progressive discipline is that where an employee repeatedly fails to meet the expectations of the job, the disciplinary action against him will begin with mild correction action and gradually move to more serious actions as each incident occurs — eventually permitting an employer to terminate for cause.

The law does not require employment contracts to include the employer’s approach to progressive discipline however, best practices suggest an employer should set out their approach to progressive discipline in a well-written and well-communicated policy. In this regard, they are able to refer to it specifically as necessary.

Levels of Disciplinary Action

Basic progressive discipline policy provides for four levels of discipline: verbal warning, written warning, suspension and termination. There is no one single approach applied — approaches vary depending on the company and collective bargaining agreement. For example, the discipline for a first offence may be counselling in one company yet a warning in another.

Overall, effective discipline helps to correct employee behavioural issues, increase productivity as well as help to protect a company against wrongful termination lawsuits.

Levels of disciplinary action are as follows:

  • Verbal warning
  • Written warning
  • Performance improvement plan
  • Temporary pay cut
  • Loss of privileges
  • Suspension
  • Demotion
  • Termination

Termination for cause should be considered as a last resort. It is challenging to prove terminations are justified and courts only do so in the clearest of circumstances. In exceptional circumstances, immediate termination for an act of significant or severe misconduct may be appropriate but in almost all cases, employers should be guided by the principle of progressive and corrective discipline.

Rather than straight dismissal, the goal of progressive discipline is correcting poor behaviour and creating a better and more productive employee.

What should employers do?

In instances where an employee’s performance or conduct is at issue, the employer should clearly provide the employee with the following:

  • A clear explanation of the problem
  • A list of steps that should be taken by the employee to address and correct the problem
  • Assistance to the employee to help him address and correct the problem
  • A reasonable time frame in which the problem is expected to be corrected

This process applies to any of the disciplinary action levels – i.e. Verbal or written warnings, performance improvement plans etc. Employers must give employees clear messages, actionable steps, assistance and reasonable time frames to show improvement during any stage of discipline.

What Forms of Discipline Are Not Appropriate?

Employee discipline is not about dominance or punishment. As a result, in most instances, discipline that is punitive is contrary to employment law. For example, withholding pay or suspending an employee without pay is not appropriate. Subjecting an employee to humiliation in front of coworkers, demotions or cuts in salary/pay are also considered inappropriate forms of discipline. Bullying usually involves repeated incidents or a pattern of behaviour that is intended to intimidate, offend, degrade or humiliate a particular person or group of people. It has also been described as the assertion of power through aggression. In this respect, it is punitive and not an appropriate form of discipline.

Suspension is a common form of punitive disciplinary action.

Unpaid Suspensions

According to the Ontario Court of Appeal, an unpaid administrative suspension generally triggers a constructive dismissal “unless it (is) an express or implied term of the contract that the employer (can) suspend an employee without pay.”

The Courts will assess unpaid suspensions with a higher level of scrutiny than paid suspensions. Accordingly, employers should not impose unpaid suspensions unless they are expressly permitted to do so by a contract of employment or the circumstances are such that an unpaid suspension is reasonable. In other words, if an employer imposes an administrative suspension that is neither expressly permitted by contract nor reasonable in the circumstances, they run the risk of liability for constructive dismissal damages.

Courts often look at whether the employee had the opportunity to challenge the suspension before the person who imposed the suspension in the first place. Failing to allow for this may render the suspension a constructive dismissal, wherein the employee may claim for notice for the termination of their employment and the potential for any unpaid wages during the suspension period.

A clear and well-drafted employment agreement or workplace policies and handbooks regarding suspensions will provide both the employer and employee with information on their rights.

How is the appropriate level of discipline determined?

Courts and tribunals expect employers to apply disciplinary measures fairly and consistently, taking into account any specific circumstances of the situation on a case-by-case basis.

Aside from the strict facts of the case, adjudicators consider both “aggravating” and “mitigating” factors in determining the most appropriate type and severity of disciplinary action — especially when an action as serious as dismissal is being considered. Arbitrators weigh the presence, or absence, of mitigating factors in deciding whether to uphold, reduce or rescind a disciplinary sanction.

  • Aggravating factors lead to a more substantial (harsher) penalty
  • Mitigating factors lead to a more lenient (lesser) penalty

Some examples of employee related factors that affect the level of disciplinary action taken include the following:

  • Clean employment record
  • No other disciplinary record on file
  • State of mind of employee when behaviour came into question (i.e. medical condition; emotional problems, harassment, violence etc.)
  • Whether an employee shows remorse during the investigation — i.e. admitting responsibility, offering an apology etc.
  • Wilful or Intentional insubordination and/or misconduct

Examples of some of the case related factors adjudicators consider are as follows:

  • Was the misconduct intentional?
  • Is the employee accepting responsibility for his/her actions?
  • Was the infraction an isolated incident?
  • Is this a long-term employee?
  • What is the work history of the employee?

From Policy to Practice

Policies communicate expectations to staff and guarantee that fair and consistent treatment is served to all. It is important for staff to know from the start what is expected and how their performance will be addressed should it fall short of workplace standards. Policies hold everyone accountable and need to be supported by accompanying procedures.

The following are procedures to support progressive discipline:

On-going operational procedures:

  • Hold regular manager training, and make progressive discipline policy review a prominent part of that training
  • Create a standardised form for all managers and departments to use when they write up an employee for a disciplinary infraction. Be sure they fill out the form in full.
  • Develop a system that allows easy review of disciplinary write-ups.
  • Practice early detection of issues with equal treatment of employees by different managers. Make it a point to ask about this issue during employee reviews.
  • Discipline managers if they fail to uphold company policies.

Procedures involving incompetence: Employee lacks the skills or ability to do the job.

  • Set out clear, reasonable job expectations in company policies
  • Clearly communicate job expectations to all employees
  • Bring unacceptable work to the attention of the employee promptly
  • Provide reasonable supervision, training and instruction
  • Give reasonable warning that failure to meet these expectations could result in dismissal
  • Allow for time and opportunity to meet the job expectations
  • If not improvement has emerged, dismiss the employee
  • Keep complete written records

Procedures involving misconduct: Employee breaks rules for keeping the work place efficient and safe.

Suggested steps:

  • Give the employee an opportunity to tell his/her story about the misconduct
  • Collect all the relevant facts surrounding the misconduct
  • Give a verbal warning
  • Give a written warning
  • Suspend the employee
  • As a final step in the process, dismiss the employee
  • Keep complete written records

Summary Comments

Termination of staff should be considered a last resort. The incorporation of progressive discipline in the form of policies, procedures and practices can provide effective corrective strategies to mitigate many behaviour issues and avoid disputes being taken to court. Progressive discipline is a doctrine upheld by Ontario courts, which should be part of a company policy and should be clearly communicated and adhered to.


Contact Justin W. Anisman

Contact Justin W. Anisman, the author of this blog, about any employment law related questions or issues you may be facing. Call 416-304-7005 or email him at janisman@btlegal.ca.

Justin W. Anisman is an Employment Lawyer at the Toronto law firm Brauti Thorning LLP. Justin advises both companies and individuals in all aspects of employment law including wrongful dismissal, human rights and discrimination.


The publications made on this website are provided and intended for general introductory information purposes only. They do not constitute legal or other professional advice, or an opinion of any kind. Speak to a professional before making decisions about your own particular circumstances.