In Trump era, HR should get ahead of potential conflicts: Experts

Termination of B.C. manager highlights challenges of political differences

The Teahouse restaurant in Vancouver, where a manager was fired. Credit: Google Street View

The termination of a British Columbia manager for requesting that a restaurant patron remove his hat — which sported a slogan supporting U.S. President Donald Trump — has ignited debate around politics and the workplace.

“Nothing is black and white in the field of people,” said MaryAnn Kempe, spokesperson for CPHR Canada and past president of CPHR Manitoba. “From a people engagement perspective, going to the corporal punishment of termination should always typically be your last action.”

But with the topic of politics growing more divisive by the day, it would be wise for human resource professionals to get ahead of the issue, if they haven’t already, she said.

“We see the political divide happening in the United States — it’s very apparent,” said Kempe. “It’s on every news channel. It’s every night; you can’t get away from it.”

“So, how do we create cultures that allow for differences of opinion, differences of perspective, differences of religion? You don’t always have to agree, but you’ve got to bring some respect.”

Defending free speech

In terminating employee Darin Hodge, the Teahouse restaurants parent company said it did not support intolerance of any kind, according to media reports.

“It is because of these principles that we cannot discriminate against someone based on their support for the current administration in the United States or any other bona fide political party,” said Eva Gates, vice-president of operations for Sequoia Company of Restaurants in Vancouver.

The company’s actions in this case are understandable, according to Brian Kreissl, a human resources product development manager at Thomson Reuters in Toronto (publisher of Canadian HR Reporter).

“When you’re in a customer service kind of scenario, you’ve got to take the public as they are,” he said. “You have to be respectful and tolerant of differences of opinion — and I think that that does include political opinions.”

“As long as the person isn’t actually saying anything that’s hateful or racist… banning the person or not allowing them to be served might be a little bit much unless the entire organization has a political orientation,” said Kreissl. “If it’s just a general commercial organization, I think we have to be careful about that sort of thing.”

Going back to the first principles of the employer-employee relationship is helpful in this case, said Stuart Rudner, employment lawyer at Rudner Law in Toronto.

“As an employee, you can’t pick and choose which customers or clients you’re going to serve, the same way you can’t pick and choose which colleagues you’re going to work with.”

To decline working with colleagues or serving clients because of skin colour, religious preferences or sexual orientation is unacceptable under human rights legislation, said Rudner.

“From an employment perspective, it’s equally unacceptable to say, ‘I’m not going to serve this person because I don’t like their politics,’” he said, noting that would qualify as a fundamental breach of their duties as an employee.

“Unless there is some reason to fear for their safety or some other concern, you can’t refuse to serve a (customer) because of their political views and if you do, that should lead toA discipline.”

It doesn’t matter if the customer is your ex-girlfriend or a Trump supporter, said Rudner.

“It helps to go back to first principles… You are, as an employee, required to do your job, and you can’t pick and choose when and with who you do it.”

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Article written by: Marcel Vander Weir

Article posted in: HR Reporter Canada OCT 22, 2018

Article spotted by: Kathryn Benson and posted by Louise Burden

Does probationary employment give HR right to terminate?

This one is right up there with “two weeks’ notice” and “three strikes you’re out”. Some employers are baffled to learn that they do not have an absolute right to terminate an employee within the first three months of employment. One employer on Prince Edward Island found this out the hard way.

In Pound v iWave Information Systems, 2017 PECA 17(CanLII), the employee, “GP”, was hired as a marketing and communications manager. This was a full-time permanent position where part of GP’s contract indicated that he was subject to a three month probation period. The Company also had policies in part providing: "[on] a termination of employment … the employee will be given a letter detailing the reason for termination." It also formally set out a process for coaching and improving performance, progressing from a verbal warning to a written warning, and then a final written warning, following which the "[c]onsequences of unacceptable improvement will be termination without notice or payment in lieu of notice."

When the employer decided to terminate GP after only two months on the job, and one month before the expiry of his contractual probation period, it assumed that it was free to do so without restriction. Although the employer did not give a letter detailing the reason for termination, and did not apply its own policies regarding warnings and performance improvement, it justified its actions partially by telling GP that the company does "not take these types of decisions lightly" but that "[w]hen it finally became apparent that it would not work out, we felt it was time to part ways and go in another direction. That's what probationary periods are for….” The trial Court agreed with the company, but the P.E.I. Court of Appeal did not.

The Court of Appeal found that the employer’s policies also formed a part of the employment contract, and accordingly GP was entitled to the promised warnings and a full explanation on termination, even before the expiry of his probation period. The employer therefore wrongfully dismissed GP because it failed to provide the entitlements provided in the employment contract. And accordingly, the Court of Appeal ordered the employer to provide GP with three months’ pay in lieu of reasonable notice of termination at common law.

Yes. Three months’ pay. For a two month employee.

Hopefully this case will serve as an important reminder for all employers about how probation periods really work:

1. Your applicable legislation may only entitle an employee to notice of termination after accruing a certain amount of service (three months in the case of Ontario’s Employment Standards Act, 2000), but the strict terms of the legislation will only apply if there is a valid contract limiting the employee to those entitlements.Otherwise, the common law will apply.On this topic you may want to listen to Episode 5 of the Lawyers For Employers Podcast.
2. A valid employment contract with a probation period lowers the threshold for just cause terminations (without notice) to a basis that the employee is not suitable for continued employment.However, several criteria must still be met before you can terminate a probationary employee without notice:

• The employee must be advised of their shortcomings;
• The employee must be directed and coached on how to improve their performance;
• The employee must be given an adequate opportunity to improve their performance;
• The employee must be advised that failure to meet expectations will result in their termination during the probation period; and
• As always, an employer’s discretion to terminate during a probation period must be exercised in good faith.

It is also important to note the reasonable notice period assessed by the P.E.I. Court of Appeal in this case. Three months’ notice for a two month employee may seem excessive, but the reality is that in cases of very short employment terms where there is no just cause for termination, Courts are typically more favourable to employees.

Hopefully this case illustrates how important it is to understand your rights and obligations as an employer with respect to probation periods for employees, and dispels the myth that all employees can be terminated within the first three months of service. An employer must have the right policies and contractual terms in place, and follow proper procedure in order to avail itself of the right to terminate before the expiry of a probation period. However, it is no myth that the lawyers at CCPartners are experienced in advising employers with respect to their employment contracts, including probation periods, and terminations from employment. 

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Article published in:  HRD/Human Resource Director Canada-June 18,2018

Article written by: Michael Maclellan

Article Spotted by: Louise Burden

Former Walmart executive awarded $750,000 in extraordinary damages

Retail giant’s bad faith in removing executive and keeping her in limbo before terminating her warrants large award on top of salary and bonus damages. 

                        Photo credit: Sarah Dobson/ HR Reporter Canadain

In a recent decision that opens the range of extraordinary damages available to dismissed employees, an Ontario executive was awarded $750,000 in moral and punitive damages arising from her employer’s decision to unnecessarily prolong her dismissal, and form her employer’s post-termination conduct — one of the largest such damage awards ever given in Canadian employment law. Employment lawyer Rich Appiah discusses how this decision continues a trend for courts to compensate for the power imbalance between employers and emlpoyees when an employee is treated poorly both before and in the course of termination.

The Ontario Superior Court of Justice has awarded a former Walmart executive $750,000 in moral and punitive damages plus more than $400,000 in wrongful dismissal damages despite narrow contractual severance terms to which she agreed after the retailer marginalized and then fired her.

Gail Galea started working for Walmart Canada in September 2002 as a management trainee. In 2005, she was appointed General Merchandise Manager (GMM), reporting to a senior vice-president. In 2008, she was promoted to Vice-President, General Merchandising. She was repeatedly selected for exclusive executive development programs and expected eventually to be appointed Chief Merchandising Officer. Walmart leadership suggested that she might one day run a country division.

Matters changed dramatically in January 2010 when, due to a “cultural shift,” the president of Walmart Canada, David Cheesewright, relieved Galea of her executive role. At a meeting of hundreds of associates — including Galea’s former direct and indirect reports — he made an announcement confirming that she had been removed from the senior executive team and assigned a supporting role.

Although Cheesewright told Galea that he wanted her to remain with the company, he also indicated that he did not know what to do with her. In the ensuing months, with the company’s ostensible support, Galea actively sought a meaningful position. She travelled frequently, explored roles in overseas divisions, and even began Spanish lessons. However, during a meeting with a Walmart executive, she learned that in a recent performance review Cheesewright ranked her as “not currently promotable” without her knowledge. This was a downgrade from a prior rating. A second related metric of her performance had also been downgraded.

In November 2010, upon her return from an eight-week executive training program, Galea discovered that her belongings had been relocated from her office and her telephone had been disconnected. From her new office, she no longer had access to Cheesewright. Shortly thereafter, Cheesewright gave her the choice of running an e-commerce division on a probationary basis or accepting a severance package. Galea later heard that in the new position, she would report to an executive who did not want her in the organization, and her low performance rating would hinder her advancement.

Though these events seemed to demonstrate that Walmart did not have confidence in her, Cheesewright and others frequently expressed their support. Galea attempted to discuss the matter further with him and the company’s human resources manager. However, on Nov. 19, 2010, Walmart terminated her employment.

Galea’s extensive efforts to find other work at Walmart proved unfruitful. She never received a job description for the e-commerce role, and Walmart provided her with no viable options to remain employed. She concluded that Walmart prolonged her dismissal for nine months to her personal detriment. She commenced an action claiming damages for wrongful dismissal, and moral and punitive damages.

Non-competition agreement

Galea’s wrongful dismissal damages turned on a two-year non-competition agreement (NCA) that she signed when she was promoted to GMM in 2005. In exchange for her acceptance of the NCA, Galea was promised, for a two-year “transition period,” “transition payments” including her base salary, any incentive payable “in accordance with the annual incentive plan (AIP) in effect on the date of termination,” and Walmart’s portion of health and dental premiums.

When Galea signed the NCA, she was participating in one AIP. Walmart management also recommended that she receive stock options under a stock incentive plan. By January 2010, she was participating in four different incentive programs — a discretionary Management Incentive Program (MIP), paid as a percentage of her base salary; a Deferred Profit Sharing Program (DPSP), entitling Galea to four per cent of her annual salary, bonus and vacation pay; an Executive Retirement Plan (ERP), into which Wal-Mart made contributions on her behalf annually; and a Long-Term Incentive Plan/Performance Share Plan (PSP), under which Galea received a one-time award of shares vesting equally in January 2009, 2010 and 2011. One issue at trial concerned Galea’s entitlement to compensation associated with such programs during her transition period. At the time she signed the NCA, they did not exist. Walmart additionally argued that program terms disqualified her entitlement post-termination.

Citing the Ontario Court of Appeal’s decision in Paquette v. TeraGo Networks Inc., the court held that “damages in a wrongful dismissal case ‘should place the employee in the same financial position he or she would have been in had reasonable notice of that employee’s (dismissal) had been given.’” The court found this principle applied to an agreement, such as the NCA, providing for compensation over a prescribed term. Relying upon the appellate court’s decision in Wood v. Fred Deeley Imports Ltd., the court also preferred an interpretation of the NCA favouring Galea where it could reasonably be interpreted in more than one way.

In the court’s view, the term “any incentive,” in the NCA, suggested that more than one incentive might be made available to her upon her dismissal. The court thus read the word “Plans” into the term “Annual Incentive Plan.” On this basis, the court awarded damages of $437,434 for payments owing to Galea during the transition period under the MIP (although MIP terms excluded payments post-termination), DPSP and ESP, among other damages. Despite the award of MIP payments, Galea was not awarded payment in lieu of stock vesting under the PSP because plan terms prohibited vesting subsequent to Galea’s dismissal.....

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Article Written by : Rich Appiah in Canadian Employment Law Today

Article Published: Feb 20, 2018

Article Spotted by: Louise Burden