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Employment & Labour

Key points for employers about condonation

By Arthur Zeilikman

Employers do not have to provide notice of termination or pay in lieu thereof if there was “just cause” to terminate the employee. Just cause exists if the employee has committed a serious act of misconduct such as an act of insubordination or incompetence.

So what happens when an employer does not do anything about the misconduct? Can it be said that the employer has condoned behaviour that would otherwise amount to cause for termination?

Condonation occurs when an employer fails to terminate an employee for just cause promptly after an act of misconduct made by the employee. This is because the employer’s failure to act in a swift manner may have occurred because the employer actually did not feel the misconduct warranted an immediate termination and, as such, they simply allowed or ignored the misconduct for a period. The jurisprudence sets out that condonation may be a defence that an employee may use when an employer attempts at a later time to terminate the employee for cause based on a previous act of misconduct.

If an employer learns of an act of misconduct by their employee warranting of summary dismissal then the employer should either 1) terminate the employee immediately for cause or 2) terminate the employee for cause after a reasonable time to consider its position. For instance, the employer may not be very clear of the set of circumstances leading up to the act of misconduct and, as such, may reasonably take some time to investigate the situation in order to gain a full grasp of what happened and its effects. The employer risks that the employee’s misconduct will be held to be condoned if the employer fails to either terminate the employee immediately or take a reasonable time to consider its position and then terminate the employee. 

Employers also should be aware that if they are not confident in their decision to terminate for cause that the employer has the ability (and often times the legal requirement) to provide a few warnings to the employee as an alternative. A few warnings to an employee should state that the employee’s misconduct is not acceptable and if the employee does not stop the behaviour that it could then result in termination for cause or further discipline. It is important to note that employers often find that providing a warning can be a bit difficult. This is because the warning to the employee must be carefully prepared in order to avoid any ambiguity. For instance, the warning should be clear with the misconduct fully stated and any prescribed discipline adequately described.

Another way in which an employer may condone the employee’s bad behaviour is providing the employee with a raise. The employee is entitled to assume that the employer is content with their behaviour if they are in receipt of a pay raise from the employer unless the employer is very clear that the pay increase does not relate in any way to the employee’s behaviour.  

The employer should not provide any commendation or risk condonation of the employee’s behaviour. For instance, the employer should not provide the employee with any positive (even neutral) performance reviews. 

Sometimes the employer may wish to “smooth things over” with a to-be terminated for cause employee by offering to provide a reference letter to potential new employees. This would be a mistake. There has been jurisprudence to suggest that the providing such a letter or even offering to provide such a letter may be enough to prevent an employer from claiming just cause upon termination of the employee for misconduct. 

So condonation boils down to these points:

  1. The employer should act immediately to terminate an employee for just cause if true cause exists. If that is not possible, the employer should act after “a reasonable time” to consider its position.
  2. If the employer is not confident in their decision to terminate an employee for just cause they may issue a few warnings to the employee as an alternate to termination. However, the employer must be clear in their warning to the employee and the warning should be in writing.
  3. Do not provide the employee with any bonuses, pay increases, positive (or even neutral) performance reviews, reference letters etc. because each of these acts can be considered to be acts of condonation. 

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