Can You Terminate an Employee Solely for Poor Performance?

Written by on October 4, 2020 in Employment Law Blog, Focus on Canadian Cases

Many employers consider poor performance to be just cause to terminate an employee. And while this is technically correct, the threshold for just cause for poor performance under the Employment Standards Act is higher than you might think.

If the terminated employee sues the employer for wrongful dismissal, and the judge finds that the employer in fact did not have just cause, then the employer may be ordered to pay damages to that employee.

Defining poor performance

In order to justify terminating an employee for poor performance, the employer must show that the employee has failed to perform the essential duties of their job. This must also be an ongoing pattern of behaviour and not one or two isolated incidents.

For the termination to be justified in court, the employer must be able to show objectively that the employee was unable or unwilling to meet the requirements of their position. Furthermore, the court will also take mitigating factors into account such as workload, training, etc.

Steps that should be taken before termination for poor performance

Before an employer terminates an employee for cause for poor performance, they must take reasonable steps to help the employee improve. This may include additional training if needed. It should also include written warnings which outline the areas in which the employee needs to improve along with the consequences of what will happen if improvement is not made within a given timeframe, being termination of employment for cause. Seldom though do courts uphold terminations for cause based on poor performance unless there are additional factors.

By taking these steps, the employer creates an objective standard which will be more likely to be viewed favourably by the court, should the employer find themselves being sued for wrongful termination.

Sample case

In 2019, in Cottrill vs. Utopia Day Spa and Salons Ltd., a skin care specialist was fired for poor performance. Prior to her termination, the salon had warned her of her poor performance and had set performance targets for her to achieve within the following three months. Despite the plaintiff’s increasing her sales however, the salon fired her anyway stating that she had not met all of the performance standards and that she exhibited a bad attitude.

The Court ruled however that failure to meet all performance standards did not constitute just cause in this case. Further, they noted that the employer was relying only on vague statements of poor attitude.

Ultimately, the Court ruled that the plaintiff did in fact meet the necessary performance standards when she increased her sales and that her employer did not have just cause for terminating her. This resulted in the salon being ordered to pay the defendant damages in lieu of notice as well as aggravated damages for the salons breach of their duty of good faith.

Contact Minken Employer Lawyers today

Are you considering terminating an employee for poor performance? Before you do, contact Minken Employment Lawyers to ensure that you have taken the necessary steps for your decision to hold up in court. And if you are an employee who has been terminated for poor performance and wish to challenge this decision, you can also contact our legal team for help.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. If you have any questions, please contact us or call us at 905-477-7011. Sign up for our newsletter to receive up-to-date Employment Law information, including new legislation and Court decisions impacting your workplace.

Please note that this article is for informational purposes only and does not constitute legal advice.


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