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December 2007 Newsletter

The Bench
Crystal Gamble and Moira Goodfellow

Every newsletter we will present you with a fact scenario from a real employment law case. We’ll ask you what you would have done if you were on the bench, and then tell you what the real outcome of the case was. In this first edition, you’ll be asked to determine whether the employer had cause to fire their employee for incompetence and poor work performance.

Here are the facts: Christine Fanous started working for Total Credit Recovery Ltd. (TCR) in July 2000 in the company’s call centre. TCR gave Ms. Fanous several weeks of training, after which she dealt with incoming and outgoing calls independently. A supervisor listened in on her calls from time to time and made suggestions on how she could improve her performance.

In April 2001, after about 9 months of employment, Ms. Fanous received her first performance review. The feedback was positive, including the following statement: “GREAT WRAP UP TIME AND # OF CALLS – VERY GOOD CHRISTINE”. In August 2001, Ms. Fanous received her first formal performance review. Briefly, it stated that Ms. Fanous had exceeded expectations in terms of quantity of work, but had fallen short of expectations in terms of the quality of her work. She met all other expectations, such as knowledge, initiative, and judgment, but overall she had just met expectations.

In October 2001, Ms. Famous received a 9% raise. Just a couple of days later, still in October, Ms. Fanous received a certificate of recognition due to her performance the previous month. In February 2002, Ms. Fanous was asked to attend a meeting in the human resources department, where she was told that her employment would be terminated at the beginning of March after she had worked a fourteen day notice period. Ms. Fanous’ letter of termination stated she had continued to fall short of the company’s expectations and, despite efforts to help her improve, such as training and assistance, her performance continued to fail to meet the requirements of the job. Ms. Fanous left the human resources office in tears and returned to her desk. Security guards arrived to escort her out of the building. Ms. Fanous never went back to TCR, and TCR refused to pay her for the 2 week period.

What is your ruling from the Bench? Did TCR have cause to fire Ms. Fanous? If you ruled TCR didn’t have cause to fire Ms. Fanous, you’re right. The Ontario Superior Court of Justice held that TCR did not have just cause to terminate Ms. Fanous’ employment, despite the company’s evidence that her performance levels had declined since she had started and that she had failed to meet company targets for 3 consecutive months. The reasons for the Court’s decision were:

• the company had not set standards or targets against which they could accurately measure Ms. Fanous’ performance;
• the company had given her a raise and a certificate of recognition only 4 months before terminating her employment;
• it seemed as though the reason for terminating Ms. Fanous’ employment was that her performance levels did not increase monthly, which was insufficient to justify a termination;
• the Company had concentrated on too short a period of time; and
• even if Ms. Fanous’ conduct warranted instantaneous termination, she would still have required at least some warning;

It is notoriously difficulty to terminate an employee for cause based upon poor performance This case illustrates the importance of warning an employees if their performance is inadequate. In particular, employers must expressly warn an employee that her job is in jeopardy if their performance does not improve. Since Ms. Fanous had only been with TCR for such a short period of time, the Court held that she was entitled to 1 month’s notice. However, the Court added another month for the manner in which TCR terminated her employment.

For more information see: Fanous v. Total Credit Recovery Ltd., 2006 CarswellOnt 4527.

Crystal Gamble and Moira Goodfellow are members of McInnes Cooper’s Regional Labour and Employment Law Practice Group. For more information, or to contact Crystal, Moira or any member of McInnes Cooper, visit www.mcinnescooper.com.