This was a case where a 58 year old, co-extrusion operator with some 13 years seniority with Depco was terminated for just cause. Depco alleged that there were nine (9) incidents where progressive discipline was imposed (see paragraph 7 of the decision for a summary).
I'd like to highlight two (2) aspects of this case. First, the discussion of employee handbooks. Second, the discussion of "cumulative" just cause.
Justice Echlin made some helpful comments about an Employee Handbook that had been prepared and distributed by Depco and "signed off" by the employees. The Handbook contained a section entitled Corrective Discipline which contained the following:
Normal discipline will follow these progressive steps:
1) counseling (one time)
2) Verbal Warning
3) Written Warning
The specific disciplinary action to be taken will be related to the nature and seriousness of the offence, the employee's past record with the Company, and disciplinary action taken with other employees who have committed similar offenses. Any disciplinary action will be removed from the employee's record after one year.
The employee argued any discipline that pre-dated the termination had been "expunged" from the record because of the wording of the Handbook. Mr. Justice Echlin agreed stating that:
I reject Depco's argument that the wording as it stands requires a complaint-free period before past disciplinary action is removed from the record. If this is now truly Depco's intention, then it should say so in express terms. In the absence of clear language requiring a period of good conduct in order to have prior misdemeanours removed, I am unable and unwilling to create such a restriction to a term otherwise favourable to employees and as drafted by Depco.
A review of the wording of the manual gives no authority for acceleration the progressive steps as set out by Depco. If it had intended to confer such a discretion upon the Human Resources Manager, it ought to have done so expressly.
While the Handbook could have been more clearly written, and with respect, I'm not entirely sure that the Handbook could not be interpreted as the employer had argued in this case. The Handbook refers to "normal discipline will follow these progressive steps" and "the specific disciplinary action to be taken will be related to the nature and seriousness of the offence, the employee's past record with the Company, and disciplinary action taken with other employees who have committed similar offenses." Furthermore, one would have thought that the employer has some residual discretion in cases of discipline to determine the penalty. For example, if an employee is caught stealing, must the employer give the employee a written warning or can it simply terminate for just cause? Does the Handbook, in effect, tie the employer's hands into discipline by rote? I would have thought that the employer can, initially, determine whether the "punishment fits the crime" only to have that decision overturned by a court if it is of the view that the evidence does not support the employer's decision.
This Court encourages employers to adopt clear and forthright disciplinary procedures and to apply them fairly. By clearly setting out employer expectations and creating a fair and clearly documented regime of discipline, fewer misunderstandings will occur. In short, such a process is more transparent. However, in this instance, if the employer intends that its policies be interpreted in a fashion different than I have found, then it ought to immediately revise and properly give notice of such changes to their policy to provide further clarity. I should observe that there was an element of rigidity and self-granted discretion in the way Ms. Jong-Lee administered her policy.
It is evident that progressive discipline for minor, albeit disciplinable conduct, can culminate in a termination for just cause. The employer, in essence, relies upon the disciplinary record and says "this person is unable or unwilling to change" and the employer should not be expected to continue with the employment relationship in the face of that. What is apparent is that the employee clearly understand certain things including:
- The conduct that is not acceptable
- The expectations of the employer
- The time frame during which improvement must be show
- Follow-up by the employer
- Assistance, if necessary, in achieving the employer expectation
- A clear and unequivocal warning that a failure to improve will result in further disciplinary action up to and including termination.
Put another way, as was done in Duffett v. Squibb Canada Inc. (1992, Nfld. S.C.-T.D.):
Warnings are sufficient where they refer to the concerns of the employer and where, objectively, could be implied that the employee's job is in jeopardy unless the employer's concerns are satisfied. There is no requirement that the warnings be in writing; however, it must be given in clear terms and the employee must understand and appreciate the significance of the warning ...