Scope of last chance agreements

How far can an agreement go in stipulating what will result in dismissal?
By Stuart Rudner
|Canadian Employment Law Today|Last Updated: 07/06/2016

Question: Can a last chance agreement stipulate that any misconduct, regardless of whether it’s similar to past misconduct, will result in dismissal?

Answer: Last chance agreements are one of the specific issues that I address in my book, You're Fired! Just Cause for Dismissal in Canada. As is discussed at great length in the book, whether or not summary dismissal is appropriate will depend upon not only the specific misconduct in question, but a number of factors which will include the employee’s history of employment, disciplinary history, nature of her position, and response when confronted. While disciplinary history will be a factor, it is not the only factor. Ultimately, a court or arbitrator will attempt to determine whether the relationship has been irreparably harmed, in light of all the relevant circumstances.

Last chance agreements are typically entered into in situations where just cause for dismissal already exists, but the employee is being offered a “last chance” to keep her job. In exchange, the employee agrees that any future transgressions will result in summary dismissal. For that reason, courts and arbitrators are often willing to concede some of the discretion which they normally retain and agree that any future transgression will be sufficient to warrant summary dismissal. That said, every case must be looked at based upon its own particular circumstances, and trivial transgressions, or transgressions that occur years after the last chance agreement was entered into, may not warrant summary dismissal, despite the existence of the last chance agreement.