One question we hear often is whether an employer can terminate employment solely for performance-related reasons. You may have this question after being placed on a performance improvement plan, or worse, after your employer has already terminated your employment.
Performance Related Terminations Without Just Cause
In Alberta, An employer can fire an employee for performance reasons without cause, but must provide notice or pay severance in lieu of notice. Even if the performance assessment is flawed or unfair, employers are free to terminate employment without cause as long as the termination is not discriminatory under Alberta’s human rights laws or is not somehow retaliatory towards the employee’s exercise of a statutory right.
Performance Related Terminations With Just Cause
Firing an employee for performance reasons for cause in Alberta is more complex. It allows the employer to avoid paying severance to the employee as long as they can demonstrate that the employee’s misconduct was serious enough to cause a breakdown of the employment relationship, making it no longer viable. This analysis considers the nature and extent of the misconduct; the surrounding circumstances, including the employee’s age, employment history, seniority, role, and responsibilities; the type of business; the employer’s relevant policies or practices; and whether dismissal is a proportional response following progressive discipline or alternative sanctions, except for the most serious circumstances.
To terminate for cause due to a performance issue an employer must prove:
- The level of job performance required was communicated to the employee in a sufficiently clear manner that allowed the employee to meet that standard;
- The employee did not meet or was incapable of meeting the standard, for reasons that were within the employee’s control; and
- The employee was warned that failure to meet the standard would result in dismissal for cause.
The recent Court of King’s Bench decision in McDonald v Sproule Management GP Limited, 2023 ABKB 587 demonstrates how these criteria are applied. In this case, the employer alleged numerous facts supporting just cause, based on insubordination, insolence, substandard performance, incompetence, and inability to perform. After reviewing the evidence filed by the parties, the Court accepted that the employee’s conduct displayed poor performance and some incompetence in his role.
However, the Court determined the employer did not have just cause to terminate the employee’s employment, finding the employer had failed to adequately inform the employee of the consequences of not meeting the expected level of job performance. The Court reviewed the history of the communication between the parties and found the employer never clearly warned the employee that further misconduct could result in termination for cause.
If you have been terminated for performance reasons, or if you have been placed on a performance improvement plan and are concerned that your employer may terminate you for cause, you don’t have to face it alone. Please contact Cashion Legal to schedule a consultation. We work with employees before and after termination to make sure their rights are protected and they are best positioned to take the next step in their career.
This article is intended to help educate the general public on the legal community on recent developments in employment law. Reviewing this article is not a sufficient substitute for legal advice. If you need legal advice, contact us today.