Employers’ Conduct Considered in Terminations For Cause

Arbor Tech Utility Services Ltd. o/a Arbortech Utility Services v Coderre, 2024 ABESAB 23 (CanLII), is an appeal of an Employment Standard decision, whereby it was determined that the Employer, Arbor Tech Utility Services LTD. (“Arbor”) did not have just cause to terminate its Employee, Stacey Lynette Coderre for performance issues.

This case is important because it serves as an example of the sorts of things employers will usually need to prove to terminate for just cause in work performance cases.

Facts

The following are the pertinent facts of the case:

• Arbor hired the employee in July 2022, in the position of Safety Administrator.
• During the employment relationship, Arbor alleged that it issued the employee multiple verbal and written warnings.
• Arbor gave evidence of the following warnings issued to the employee:

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• April 20, 2023: a verbal warning, regarding failure to follow the direction on who the Respondent is supposed to go to for certain issues (“Failing to Follow Chain of Command”). In the box for corrective actions to be taken it was written “[t]his verbal warning”. The warning form was signed by the Respondent and Mr. Bruce;

• Undated warning: it concerned an inaccurate personnel list allegedly provided by the Respondent, which included “employees” no longer with the Employer (“Inaccurate Employee List”). The Employer describes it as likely emanating from around April 26, 2023, based on the date when the list in question was noted as received from the Respondent. Nothing was written in the box for corrective actions to be taken. It was also unsigned by either the Respondent or Mr. Bruce. Additionally, no checkbox had been filled out on the type of warning it was, verbal or written, although Mr. Bruce’s evidence was that he only requires signatures on written warnings, and as it was unsigned this suggests it may have been verbal;

• May 4, 2023: a verbal warning regarding the Respondent not moving some boxes as instructed, (“Not Following Instruction re: Moving Boxes”). Nothing was written in the box for corrective actions to be taken. The warning form was unsigned by the Respondent and Mr. Bruce;

• May 15, 2023: a verbal warning regarding the Respondent not following office casual dress code (“Dress Code Breach”). Under the corrective actions to be taken it states, “No sweat pants”. The warning form was unsigned by the Respondent and Mr. Bruce; an

• August 14 2023: a written warning regarding the Respondent’s lack of accuracy in work product (“Inaccurate Work Product”). Under the corrective actions to be taken it states the Respondent will be issued this written warning and for her to ensure all work is double checked and accurate. The warning form was signed by the Respondent and Mr. Bruce.

• The employee acknowledged two of the warnings. An oral warning on April 20, 2023, and a written warning on August 14, 2023. The employee did recall having a verbal conversation with Arbor regarding her failure to move boxes and casual office dress.
• On August 16, 2023, Arbor verbally terminated the employee and alleged cause citing inaccuracies in her work.
• Arbor later provided the employee with a termination letter, stating she had been terminated for cause “based on poor performance and insubordination”.
• The employee filed a complaint with Employment Standards for termination pay.
• The complaint was investigated by an Employment Standards Officer. The Officer determined that Arbor did not have cause to terminate the employee; therefore, termination pay was owing to her.
• Arbor appealed the decision.

Analysis / Conclusion

The main issue before the Alberta Labour Relations Board (“ALRB”), was whether Arbor had just cause to terminate the employee Ms. Coderre.

In determining whether Arbor had just cause to terminate the employee, a contextual approach was to be applied, considering the surrounding circumstances and nature or degree of misconduct involved, as established by the Supreme Court of Canada in McKinley v BC Tel, 2001 SCC 38 (“McKinley”) at paragraph 34.

Generally, in determining whether an Employer has just cause to terminate, one of the two routes needs to be proven:

1. The conduct was sufficiently serious to repudiate the employment contract warranting immediate dismissal; or
2. The conduct was inconsistent with the employees’ duties, but does not warrant immediate dismissal, so there must be warnings leading up to dismissal.

In the present case, the second route was applicable, given the employee’s termination stemmed from performance and competency issues.

When an Employer alleges just cause for cumulative incompetence, the following test is to be applied as held in Lowery v Calgary (City), 2002 ABCA 237 (“Lowery”) (at paragraph 3):

1. The employee was given express and clear warnings about his performance.
2. The employee was given a reasonable opportunity to improve his performance after the warning was issued.

3.Notwithstanding the foregoing, the employee failed to improve his performance.

4.The cumulative failings “would prejudice the proper conduct of the employer’s business”.

In applying Lowery to the complaint at hand, the ALRB noted the following:

• There was no evidence of Arbor providing the employee with express and clear warnings. The ongoing discussions between Arbor and the employee surrounding accuracy improvement and reminders to double check her work, did not constitute an express and clear warning for the purpose of establishing just cause
• Arbor failed to provide definitive warnings and performance benchmarks of expectations. Merely telling the employee that there were deficiencies in her work without providing a means for her to improve (i.e., training) and/or performance reviews was insufficient
• Arbor’s policies surrounding instances in which an employee could be terminated for cause did not amount to sufficient warnings, as the policies were generalized statements
• The employee wasn’t provided with a reasonable opportunity to improve her performance following the August 14, 2023, warning, as she was terminated shortly thereafter, on August 16, 2023.

The ALRB ultimately determined that Arbor did not have just cause to terminate Ms. Coderre, as it failed to provide her with an express and clear warning of termination, and it didn’t provide her with a genuine opportunity to improve her performance. Therefore, Arbor was required to provide her with termination pay.

My Take

In determining whether an employer had just cause to terminate an employee, the employee’s conduct is only part of the story.  A great deal of emphasis is also placed on the employer’s conduct leading up to the termination. The accountability placed on employers is due to the severe consequences of a finding that an employer had just cause to terminate an employee; its sometimes called the “capital punishment” in employment law.

In light of the above, I am not surprised by this decision. I anticipate the outcome would have been different, had the Employer, Arbor, done the following:

• Provided the employee with clear warnings that should the performance issues continue, termination was a possible outcome. While Arbor did provide the employee with written and verbal warnings, said warnings did not indicate that she could be terminated in the future should the conduct persist;
• Provided the employee with additional training to address the performance issues; and
• Provided the employee with the opportunity to improve her performance.

Absent the above, an employer will usually have a hard time persuading a court or tribunal that it had just cause to terminate an employee for performance issues.

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