How much carelessness must an employer tolerate? That’s a question Justice Randall Echlin of the Ontario Superior Court posed in a recent case where he found an employer was justified in firing a worker for cause who had a history of documented problems.
Daley v. Depco International Ltd.
provides employers with an interesting look at how a progressive discipline policy should work. It also provides insight into how courts view material in an employee handbook and how important it is that they are worded properly and reflect the employer’s true intention.
The case: Daley v. Depco International Ltd.
In his opening commentary in
, Justice Randall Echlin quoted 18th century English poet Alexander Pope, who is credited with having said “to err is human, to forgive divine.”
, a more appropriate alternate ending to Pope’s famous saying as it applies to the employer’s relationship with the plaintiff might be “to forgive is not company policy,” Justice Echlin said.
Gian Daley was born and raised in India. He immigrated to Canada, attended college and obtained certification in injection moulding. On Jan. 8, 1990, he was hired by Depco International Ltd. He was dismissed for cause on Dec. 11, 2002, at the age of 58 after nearly 13 years’ service. As a co-extrusion operator he earned $50,470.40 per year comprised of an annual salary of $44,470.40 plus an average annual overtime pay of $6,000.
Starting on Aug. 21, 2000, Depco embarked upon a campaign of corrective discipline with Daley as outlined in its employee handbook. The handbook contained a five-step disciplinary regime which included:
Over the next 28 months Depco documented, counseled, verbally warned, gave a warning in writing, suspended and finally dismissed Daley for just cause. In that time period there were nine incidents documented by Depco, including:
•using the wrong materials in production;
•staying home without calling in to let Depco know he would be absent;
•causing the production line to go down;
•not using a machine properly;
•challenging a co-worker to a fight in the parking lot;
•showing up at work with alcohol on his breath and staggering; and
•abandoning his workstation and spilling lubricant on the floor, causing a workplace safety hazard.
The employee handbook says what it says
Depco distributed an employment handbook to its employees and obtained employee sign-off acknowledging receipt and evidencing an agreement to abide by the company’s rules, policies, terms and conditions.
It also acknowledged a realization by the employee that “failure to do so may result in disciplinary action and/or dismissal.”
Carol Jong-Lee, Depco’s human resource manager, testified that she rewrote certain terms of the manual after she became the HR manager. Notably she altered the time after which disciplinary action would be removed from the employee from 12 months to 18 months. No other terms of the corrective discipline policy were modified.
Daley’s lawyer argued the court should throw out the first four incidents dating from Oct. 2, 2001, back to Aug. 21, 2000, as having been expunged by Depco’s own policy. Counsel for Depco urged the court to read into the policy the words “incident free” during the time period preceding removal of offences from the record and that to find otherwise would be contrary to the parties’ intentions.
But the court said it was not prepared to imply a provision into the employee manual “which the employer specifically chose not to include in its recent overhaul of the manual language.”
Justice Echlin said the provision as it stands was clear and simply worded.
“It provides relief to employees by way of offering to expunge their records after a period of time without condition,” said Justice Echlin. “If the employer wished to create a new regime whereby employees ‘earned back’ their clean records, Depco ought to have expressly stated such a requirement … in the absence of clear language requiring a period of good conduct in order to have prior misdemeanours removed, I am unable and unwilling to create such a restriction to a term otherwise favourable to employees and as drafted by Depco.”
As a result, the court only considered the five incidents after May 8, 2002, in deciding whether or not Depco had just cause to dismiss Daley, tossing out the first four indiscretions.
The first incident the court considered was a verbal altercation between Daley and another employee. Daley challenged his co-worker to a fight in the company parking lot. Daley was suspended for one day as a result. The court found such a challenge was issued by Daley.
Justice Echlin also found Daley was acting strangely and had consumed alcohol on July 24, 2002. “In an industrial setting, this is truly a potential threat to workplace safety,” he said, adding that such conduct need not be countenanced by any responsible employer. At this point Depco gave Daley a memo indicating it would end his employment if he didn’t shape up.
Two months later, Daley’s actions resulted in a production line stoppage. He candidly admitted responsibility and although Depco did not discipline him for this, it did conduct an investigation and created internal documentation.
On Dec. 6, 2002, Daley again shut down the production line by forgetting to drop a coil and later caused a workplace safety hazard when lubricant flooded the floor around three production lines. The judge said it “wasn’t surprising” that Depco took the step of ending his employment as it said it would in the July 24 memo.
Justice Echlin said those five incidents of employee misconduct in a seven-month period amounted to just cause, posing the question of “how much workplace carelessness must an employer tolerate?”
“Depco was confronted with workplace altercations, alcohol-related unsteadiness and production line stoppage resulting from inserting a breaker plate and screen in reverse, a failure to drop the coil, and a significant lubricant spill which occurred while Mr. Daley was absent from his workstation,” he said.
And while any of the five incidents on their own would not have amounted to just cause, cumulatively they amounted to enough “bricks to constitute a just-cause wall,” he said.
“These incidents are not a series of minor or trifling transgressions,” said Justice Echlin. “Nor are they mere insubstantial allegations. Each one is documented. Each one involved a threat to workplace safety, a line stoppage or an act of misconduct … when not viewed in isolation they clearly fell below any reasonable standard of conduct that this employer was entitled to expect.”
He ruled Depco was justified and dismissed the claim, awarding costs to the employer in the amount of $11,000.
|Depco on the right track: judge|
While Justice Echlin was critical of the fact the handbook didn’t clearly state that records would not be expunged until 18 months of “incident-free” conduct, he said Depco should not be “unduly chided for taking the time and trouble it did to create a corrective discipline regime containing five progressive steps.”
He said this is particularly so in a non-union environment and he patted Depco on the back for routinely providing documentation to the employee upon the occurrence of an incident meriting discipline.
“Depco took care to clearly lay out the facts, the penalty if any, and notably, as the employee proceeded through the various progressive discipline steps, specific reference was made to the prior warnings given, the dates of the offences and the prior transgressions,” he said. “By doing this the employee was clearly reminded of prior warnings, while at the same time advised as to the consequences of future violations of company policy.”
The employee was also asked to acknowledge receipt of copies of such notices in writing, while not necessarily being asked to admit an error. The employee’s additional comments were also solicited.
“This court encourages employers to adopt clear and forthright disciplinary procedures and to apply them fairly. By clearly setting out employer expectations and creating a fair and clearly documented regime of discipline, fewer misunderstandings will occur. In short, such a process is more transparent. However, in this instance, if the employer intends that its policies be interpreted in a fashion different than I have found, then it ought to immediately revise and properly give notice of such changes to their policy to provide further clarity.”
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