Dismissals for incompetence: Are we moving backward or forward?

by Rhéaume Perreault and Michael Adams

It appears that employers in Quebec who wish to dismiss employees for incompetence may now need to accomplish an additional step before doing so. Indeed, the Superior Court of Quebec, in Commission scolaire Kativik v. Ménard, 2017 QCCS 4686, recently confirmed an arbitration decision in which an additional criterion was added to those established in 2005 by the Court of Appeal in Costco Wholesale Canada Ltd. v. Laplante, 2005 QCCA 788, and applied since by tribunals in Quebec.

According to the Superior Court, employers must now also verify if another more suitable position is available for the employee before proceeding with termination.

Facts

The employer, a school board, dismissed an employee for incompetence. The employee in question had productivity and efficiency issues and handed in work riddled with errors. In order to try to resolve the situation, the employer asked the employee to sign and participate in a performance improvement plan. However, his performance never improved.

Before terminating the employee, the employer offered the him a position as a receptionist. The employer asked him to provide an answer within three days, although the position was posted for other employees for a longer period. The employee declined the offer.

Considering that the employee declined the offer and was unable to improve his performance, the employer terminated his employment. The union filed a grievance on the employee’s behalf to contest the employer’s decision.

Decisions

Arbitrator Jean Ménard allowed the grievance. The arbitrator acknowledged that the employee was unable to adequately perform his duties despite the employer’s support. However, the arbitrator was of the opinion that the employer terminated the employee in an abusive manner, mainly because it should have considered a reasonable alternative to terminating his employment.

The arbitrator considered that it was unreasonable for the employer to give the employee only three days to consider the alternative employment offer. The employer applied for judicial review of the arbitrator’s decision.

The employer alleged that the arbitrator should have followed the criteria established in the Costco decision, which do not include the duty for an employer to attempt to find a suitable position for the employee within the business. Those criteria state that the performance issues must be brought to the employee’s attention, and in addition he must be:

  • made aware of the company’s policies and expectations;
  • provided with adequate support to correct his performance;
  • given a reasonable delay to correct his performance; and
  • made aware that in the event that his performance does not improve, he may be dismissed.

The Superior Court dismissed the employer’s application for judicial review and confirmed the arbitration decision mainly based on the arbitral decision Edith Cavell Private Hospital v. Hospital Employees’ Union, Local 180, (1982) 6 L.A.C. (3d) 229, rendered in 1982 in British Columbia, wherein it was decided that, in such circumstances, the employer must also demonstrate that “reasonable efforts were made to find alternative employment within the competence of the employee.” Furthermore, in 2004, the Supreme Court of Canada confirmed a decision from Alberta that applied the principles of the Edith Cavell case.

Therefore, despite the fact that these decisions were not rendered in Quebec and that in 2005 the Court of Appeal in the Costco decision did not apply this criterion, the Superior Court was of the opinion that it should apply in Quebec. It reasoned that it would be illogical that the rules in Quebec on dismissal for incompetence differ from those in other provinces.

The employer recently filed an application for leave to appeal with the Quebec Court of Appeal.

Other jurisdictions

In British Columbia, the Edith Cavell case continues to be frequently cited. It has been found to be fatal to the employer’s decision to terminate employment for incompetence where alternative available employment has not been offered. That being said, adjudicators do not always reinstate the employee in the event that the employer failed to demonstrate that “reasonable efforts were made to find alternative employment within the competence of the employee” (BC Ferry Services Inc. v. British Columbia Ferry and Marine Workers’ Union, 2013 CanLII 100803 (BCLA)).

However, the Ontario courts, arbitration, and labor boards do not consider the aforementioned criterion and apply a test similar to the one developed in the Costco decision.

Conclusion

In the event that the Court of Appeal grants the employer’s application for leave to appeal, it will be interesting to see whether it will ultimately add this additional criterion to the ones it applied in 2005 in the Costco decision. If it does, this will impose a new significant, and somewhat uncertain, obligation on Quebec employers who wish to terminate an employee for incompetence.

Also, if the Court of Appeal confirms the Superior Court’s decision, it will be interesting to follow how arbitrators, courts, and labor boards will apply this additional criterion and to see whether the Court of Appeal’s decision will influence the state of the law in other provinces that have been applying a test similar to the one in the Costco decision.

About Rheaume Perreault and Michael Adams:
Rhéaume advises clients on labour relations, labour standards, grievance arbitration, protection of personal information, certification, crisis management, human rights and employment injuries. He regularly intervenes to provide strategic advice to different organizations in complex situations involving human capital (ex., unionization campaign, drug problem, reorganization, harassment, theft of industrial secrets, etc.). He counsels a number of pan-Canadian organizations and federations. Michael Adams is a member of the Labour, Employment & Human Rights group in the Montréal office. He works in a variety of areas of labour and employment law, including labour standards, grievance arbitration, employment litigation and certification matters. Michael graduated from the University of Montréal in 2016 with a Bachelor of Laws.
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