Employment & Labour

How to effectively fire an employee for incompetence

By AdvocateDaily.com Staff

Vaughan labour and employment lawyer Arthur Zeilikman says it's vital to carefully draw up employment contracts to limit certain liabilities when facing wrongful dismissal lawsuits.

“When an employee is terminated for the cause of incompetence, a lawsuit is likely to occur,” says Zeilikman, principal of Zeilikman Law.

“The employer should set out the employee’s obligations right at the beginning when they are hired. Then they need to adhere to the terms of the contract.”

He says the obligations and objective standards outlined in the contract — and over the course of the employment relationship — must be reasonable. For example, a salesperson’s quota needs to be achievable as determined by the employment setting, Zeilikman tells AdvocateDaily.com.

“If you have an unreasonable sales quota that can’t be met, the company will not have cause for termination should it come to that,” he says.

If there are quarterly sales quotas, for instance, telling an employee in early January that you expect her to meet an improvement plan by mid-February is not enough time, Zelikman says. “You need to give her at least until March.”

Once clear standards and goals are set for each employee, the company must document in writing if they aren’t being met and come up with a plan to work toward improvement, he says.

“Some companies use employee improvement plans and they need to be reviewed with each staff member. It’s not like you can swing the axe and terminate employees summarily. You have to give them time to fix the shortcomings,” Zeilikman says.

And both parties must try to remedy any problems.

“The company needs to discuss the deficiencies with the employee and allow him time to correct them,” Zeilikman says. "The employer also has to be on top of the situation so as not to face the argument that the company was okay with the employee's less-than-satisfactory performance.”

He says the employer should be certain that firing an employee for just cause is going to stick in court.

“You don’t want a contrived cause for termination. That could result in an argument that the employee was dismissed in bad faith. It may expose the company to further liability,” he says.

“Discuss problems with the employee and then give sufficient warnings if issues are not addressed.”

Zeilikman says even if a company takes all the necessary steps for remediation, documents everything and there is just cause for termination, a lawsuit is still possible.

“You cannot prevent an ex-employee from launching a lawsuit, even if they do so erroneously.”

He says there are often cases of long-term employees being fired for just cause.

“Incompetence can happen in two years or 10 years. If you are an employee for 10 years, but your performance has been slipping, you can be terminated,” he says.

The longer the tenure, the more likely a lawsuit will be launched because it strikes a more personal chord, Zeilikman says.

He says long-term employees are also more likely to sue because it makes financial sense and they are more attached to their jobs after a long period.

If a lawsuit involves a short-term employee, Zeilikman says it is often because the worker feels he wasn’t given reasonable notice to improve or he wasn’t treated with fairness and respect.

But there are steps that can be taken to avoid a lawsuit or to minimize its impact if it does happen.

If an employer must terminate a worker, they should do so in a civil manner, he says. “It should not be hyperbolic at all. Just assert the fact that the employee is being terminated for cause.”

Zeilikman says if there’s tension between the employee and a supervisor, that person should not be responsible for dismissing the staff member. When possible, it should be done by someone familiar with the worker.

An employer should keep the matter private, he says, and if the company has a human resources staff member, that person should attend the meetings with the employee if termination is expected.

“If an employer truly feels there is just cause to terminate the staff member, they should make their case and stick by it.”

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