Hard to know what you’ll find when checking allegations

In my column on April 6, I provided my top five don’ts of employment law.

Here are the dos:

1. INVESTIGATE BEFORE FIRING Some judges have stated that, if an employee is not provided the chance to respond to misconduct allegations, there cannot be cause for discharge. But even if that were not the case, such an opportunity should be provided! It is not a matter just of being fair, but of being self-serving.

The employee might admit to the misconduct, effectively ending any wrongful dismissal action. On the other extreme, she might have a reasonable explanation for the behaviour, avoiding both the costs of a wrongful dismissal and the loss of a valuable employee. The investigation might be revealing, pointing out the misconduct of other employees or flaws in your corporate systems. But even from the standpoint of solidifying the dismissal, the investigation itself may create cause for discharge when the ostensible “cause” was legally insufficient.

Employees are required to respond honestly to questions asked of them during a “misconduct” investigation. If they refuse to do so, that refusal, in and of itself, can be cause for discharge. I develop questions for my clients’ investigations of problem employees keeping in mind the issues of misconduct, the potential excuses the employee might raise and, not least, questions that employee is likely to refuse to answer.

2. DON’T PAY WITHOUT A RELEASE When their initial severance offer is rejected, too many employers make the strategic blunder of forwarding that money to the employee anyway. They think that will curry favour with the judge. Although that may sometimes be true, it is still strategically foolish. Doing so usually results in your having to fight cases that, if you had stuck to your guns, would ultimately have settled based upon that initial offer.

In addition, why should an employer fund litigation against itself? If the offer you make to an employee is rejected, you should pay that employee only the minimum statutory entitlement until a court orders otherwise or you settle the case. There are many reasons for this. If the employee already has your money, she has no incentive to reduce her demands. Given the inexorable pressure the system places upon litigants to settle, with mediations and pretrials, the only certainty, when the employee has already been paid, is that you will be pressured into increasing your offer until a settlement is reached, beyond what you would have paid if you had not made that upfront payment. In addition, if the matter goes to trial, a court may find that the employee is entitled to less than that offer, or the employee may find other work, reducing his or her maximum entitlement below the amount of the offer.

3. CONSIDER WORKING NOTICE Most employers (and employees) do not understand that wrongful dismissal damages are “pay in lieu of notice.” An employer’s primary legal obligation is not to pay termination pay, but to provide an employee with advance notice of the dismissal. For example, if an employee is entitled to 12 months severance, the employer can avoid that payment by providing, instead, written notice that the employment will be terminated in one year from that date. There are many instances where such notice would be wrong-headed, such as if the employee has access to confidential information, represents a security risk or if their continued, unhappy presence would impact upon the morale of others. On other occasions, however, it makes considerable sense. It is obviously of more value to the employer to obtain a year of work then to pay out those wages without offsetting return. Some employees are grateful to have the opportunity to look for other work with the appearance of being employed. But even from an entirely mercenary perspective, many employees, upset at working away their severance pay, will eventuallly approach the employer and offer to accept a discounted severance in return for being allowed to leave.

4. CONSIDER A CONTRACT Constructive dismissal is a claim by an employee that their terms of employment have been fundamentally breached. But since written terms prevail over legally implied ones, employers can avoid constructive dismissal claims, with impunity, by drafting employment contracts that eliminate any potential risk. It should consider what it might wish to do in the future that could be a constructive dismissal and then write an employment contract anticipating these potential issues. If an employer wants the ability to demote an employee, cut her salary, or transfer her to another geographic location, and it lists that in an employment contract, such changes will then not be constructive dismissals. As well, employment contracts can limit employees’ severance entitlement settlement, remind them of their confidentiality obligations and prevent them from competing.

5. BE CAUTIOUS OF REPRESENTATIONS Employers often have human resource policies, company manuals and booklets replete with “motherhood” statements as to dignity in the workplace, non-harassment, fair treatment, etc. They appear not to appreciate that these create the basis for lawsuits. Such representations will come back to haunt you if an employee’s perception of “good faith” and “non-harassment” do not coincide with yours, or, for that matter, a court’s.

If you, or someone you care about, is dealing with employment law issues in the Toronto, Ontario Region, contact Lang Michener LLP.

This article is taken from an interview with Howard A. Levitt,Employment Lawyer at Lang Michener LLP, a Toronto, Ontario Employment Law Firm. Note that laws vary from province to province. Please consult with a lawyer in your own area to be sure of the laws and specific issues in your own jurisdiction.