Tuesday, July 15, 2014

10 Tips for Managing the "Problem Employee"

I have seen a great many employment relationships as they have come to very sour endings, and in a great many cases there is fault on both sides for that - where there was some failing by the employee, in many cases it is also true that the employer failed to manage the employee, resulting in a scenario that the employee is not cognizant that his/her conduct is failing to meet the employer's expectations.

The result of this failure to manage is not simply that the employer may not be able to assert just cause for dismissal; in many of these cases, it is probable that dismissal would not have been necessary at all - thus saving the employer turnover-related costs.

Sometimes, an employer doesn't want to have to deal with an employee's failings.  That's generally fine, provided that the reason doesn't fall within the narrow scope of reasons you can't fire (think: ESA-protected leaves of absence; human rights grounds; union membership; reprisal for standing on certain statutory rights), but - in the absence of just cause (which can, in severe cases, be made out by a singular instance of misconduct, but the test is high), the employer has to be prepared to provide pay in lieu of notice.  And sometimes it's worth it; keeping a "problem employee" in the workplace, paying them despite their problems, and having them potentially impact workplace morale, can be very costly in some cases.

So if you just want to get rid of the employee, contact a lawyer, and that lawyer can advise you if you have an arguable case for just cause, or in the alternative what the scale of your liabilities are likely to be.

But if you don't have just cause, and don't want to pay out the employee, here are a few steps to bear in mind for managing the employment relationship once problems have arisen:

(1)  Set Clear and Consistent Expectations

Employees can't read your mind, and sometimes they're coming at an issue or problem from a very different perspective than you.  Maybe they don't realize that what they're doing is wrong, and their behaviour can be corrected by clarifying expectations.  Maybe they realize there's a rule against what they're doing, but they don't realize the importance of the rule, and their behaviour can be corrected by explaining to them the rationale behind the rule, or at minimum highlighting that it is important to you (and, by extension, to their continued employment prospects) that they comply with the rule.

Even if it seems like common sense to you, if you've never explained your expectations, assume that the employee doesn't know.

Likewise, sometimes they see other workers disregarding a rule without consequence, and therefore regard it as acceptable conduct.  You may want to accept your most productive employee taking a few extra minutes for lunch, or swearing in the workplace, but if tardiness and decorum are at all important to you, that's a problem:  Other employees will see this, and some will mimic the behaviour.  (And as for that top employee:  Rewarding excellence should be done in an express and direct fashion; never through condonation of what otherwise constitutes misconduct.)

(2)  Accept Feedback

If you're making the best use of your workforce, your employees should generally know their jobs as well as anyone (and certainly better than HR or senior management).  Sometimes there's a reason that an employee wants to perform a task a certain way.  Management should want to know that reason, and should listen with an open mind, for two reasons:  Sometimes, the employee's way might be better, and so everyone wins by taking the employee's advice.  Otherwise, having listened to the employee's concerns puts management in a position to much more effectively respond to those concerns.  If you're still convinced that your way is better, or that the employee's way will generate unforeseen consequences, or perhaps that both ways are equally valid but you'd rather the workforce do things uniformly, then you can explain your concerns to the employee.

In cases where the employee remains unconvinced, or protests that they think that your way will cause serious problems, then tell the employee, "I've heard your concerns, and I understand them, but this decision is my responsibility.  If there are consequences, that's my problem, and we'll address them when the time comes."

This is a particularly common issue involving long-term employees when a new junior manager comes in:  I've been doing my job this way for 30 years, and now you're telling me to change it?  Sometimes, it's just a matter of getting used to changes, and you're entitled to expect the employee to try it your way.  But there's some folly in failing to even try to understand the perspective of such an experienced employee.

(3) Be Constructive

"You made a mistake", on its own, isn't helpful.  It won't assist the employee in avoiding the mistake next time, nor will it help you down the road if you're trying to assert just cause because of a series of successive mistakes.

Telling the employee what mistake he/she made is a start.  You want to point out the specific error, help the employee understand how it arose, and coach the employee as to how to avoid it happening again.  And, again, that's a two-way conversation which includes accepting feedback - sometimes there's a legitimate reason that the employee made the mistake:  Lack of training in a specific area, lack of support from another department, or poor channels of communication with the rest of the team.  Work with the employee to develop a strategy to prevent the problem from happening again.

Performance improvement plans, properly implemented, should look very positive - they aren't about past failure; they're about future success, about establishing fixed short-to-mid-term goals, with a practical strategy for achieving them.

(4) Investigate - Don't Jump to Conclusions

I have seen a number of cases where a customer or co-worker complains about an individual, and the employer immediately assumes the allegations to be wholly true.  Sometimes, the allegation is partly or entirely false.  Sometimes, it's missing exculpatory context.  The precise nature of an investigation depends on the nature of the misconduct alleged, but the one thing that you need to do in almost every case is to get the other side of the story.

Failing to appropriately investigate complaints of misconduct can, and has, put employers into very bad situations with very significant liabilities, often because of marginal-to-non-existent misconduct.  (These are some very tragic cases indeed - consider the case of Correia v. Canac Kitchens, where 62-year-old Joao Correia, a long term employee, was dismissed from employment and charged with theft, following a third party investigator concluding that the thief was 20-something-year-old Joao Correio.  A unique case, certainly, but consider the result for the employer:  Firstly, they were on the hook for wrongful dismissal damages, as well as potentially significant additional moral damages.  Secondly, it resulted in lengthy and complicated litigation as to exactly what those additional moral damages were.  Thirdly, and here's the real kick in the teeth, they lost a good long-term employee.  Never forget the importance of attention to detail.)

(5)  Explain the Consequences of Continued Misconduct

"Don't do this again" is helpful, but you really do need to add an "or else" there before you can start thinking about a dismissal for just cause.

This is a hard one for many managers.  Threatening to fire somebody...well, it's pretty harsh.  Not nearly as harsh as actually firing somebody (especially without advance warning), but at least the manager doesn't have to deal with the employee at the office the next day after a dismissal.  A dismissal threat can strain the relationship between the employee and employer.

But it needs to be done, and when combined with the other tips in this entry, it's not quite so terrible:  If you've taken the necessary steps to identify the misconduct and provide the employee with the tools and understanding to avoid recurrence, then the termination threat is little more than an incentive:  If you want to keep this job, start doing it the way we've discussed.

This is also completely essential for most 'just cause' dismissals to stand up in court, incidentally.

(6)  Document Discipline, but don't "Build a Case"

I almost never recommend an employer "build a case" for cause.  If the employer already has a settled intention to get rid of an employee, hopefully you either already have cause, or can afford to provide pay in lieu of notice.  If you're starting the process with the intention of bringing the employment relationship to an end (whether because of misconduct you've already identified, or for other reasons entirely), that will bleed through to your disciplinary efforts, and bad faith will likely be apparent.  You'll be left in a situation where (a) you kept the employee on payroll longer than you wanted; (b) you incurred significant litigation costs following dismissal; (c) you may well be on the hook for bad faith damages; and (d) you still have to provide pay in lieu of notice.

The purpose of discipline is corrective.  If you're not interested in fixing the employment relationship, bite the bullet and just fire the employee.  (But, of course, call a lawyer first.)

When you're satisfied that an employee has committed disciplinable misconduct, it's important to actually discipline the employee.  The disciplinary notice should bear in mind all these tips - clarify expectations, be constructive, seek employee feedback, explain the consequences of continued misconduct, etc.:  Again, I have seen cases where employers have issued vague disciplinary notices, without meaningful investigation, and without specifying what the employee did wrong, but with the conclusion that they'll be fired if any of the misconduct is repeated.

Not only is such a disciplinary notice not likely to be effective to support a subsequent dismissal for cause, but it could be argued to constitute, or at least support, a constructive dismissal.  (Ever since I first read Justice Echlin's decision in Carscallen v. FRI Corp, that situation always evokes Voltaire's description of the banquet of Damocles.)

So disciplinary notices should be documented (even if it's just a verbal warning), should specifically indicate the misconduct and the corrective action taken and to be taken, and written warnings should be acknowledged by the employee - i.e. have the employee sign an acknowledgement field at the bottom.  (I have seen cases that turned in large part on a dispute as to whether or not the disciplinary notices in question had ever been given to the employee.)

(7)  Don't Overstep

Speaking of Carscallen, it's important to remember the limits of your entitlements as an employer:  By default, an employer does not necessarily have a right to issue, say, a disciplinary suspension.  There's not a whole lot of case law on this, but Justice Echlin's reasoning in Carscallen is pretty widely accepted:  If there's no contractual right to suspend, then a disciplinary suspension will constitute constructive dismissal, unless the misconduct constituted just cause for dismissal in the first place.

(This is a common mistake in unionized workplaces:  Most collective agreements do include provision for disciplinary suspensions, and so become a part of an employer's ordinary disciplinary practice...which they then apply to non-bargaining unit employees, and end up getting sued for constructive dismissal.)

Even aside from bright lines like that, an employer should be cautious not to appear to be too heavy-handed - as judges say in the criminal arena, sentencing is an art, which takes into account many factors.  If you issue a "final warning" the first time a long-service employee walks in 30 seconds late, that may raise questions about your true motivations for doing so.

(8)  Be Proactive

Managing difficult employees isn't something you should disregard until you have a difficult employee.  Set expectations from the outset of the employment relationship with a detailed and thorough policy manual.  (It's wise to either have a lawyer draft the manual, or at least review the manual if a non-lawyer drafted it.)  That makes it much easier to establish fixed expectations applicable to all employees, rather than having the line (or possibly various lines) drawn on an unpredictable case-by-case basis.

Don't wait until employee use of work equipment and/or personal use of work time (i.e. surfing Facebook from your work computer or taking personal phone calls on the work phone) becomes a problem before implementing a policy to set out the expectations in your workplace.  Don't wait until two of your employees become romantically involved before you think about a fraternization policy.  Don't wait until you start smelling marijuana in the lunchroom before you implement a drugs-and-alcohol policy.  Don't wait until you receive accommodation requests before implementing a human rights policy.  Absolutely don't wait until you start getting harassment complaints before implementing harassment and violence policies (these are legally mandatory under Ontario's Occupational Health and Safety Act).

As well, for cases where you can't (or don't want to) salvage the employment relationship, it's really important to have a good lawyer-drafted employment contract executed in advance of the start of the employment relationship, to control your liabilities on dismissal.  (It's easiest to implement such contracts at the start of the relationship, but if you haven't done that yet, it's not impossible to do so for continuing employment relationships.  Contact a lawyer to see how to implement written contracts for your existing employees.)

(9)  Never EVER try to get the employee to quit

This is another scenario I've seen far too often - an employer doesn't want to (or can't afford to) provide pay in lieu of notice, but really wants the employee out of the workplace.  So instead of firing the person, the employer just changes the terms and conditions of employment in such a way that will be unacceptable to the employee, or otherwise tries to make life difficult.

This is, almost by definition, constructive dismissal.

Don't get me wrong, there are situations where adverse changes to the employment relationship are necessary and justifiable.  If you've failed to take the "be proactive" advice, then sometimes you have to make changes after employees have started to act in problematic ways, and sometimes you might even secretly cross your fingers and hope that the problem employees will say "What do you mean I can't surf Facebook all day at work?  I'm out of here."  But if the court believes that part of the motivation for the changes was to drive the employee out, then that's probably going to be constructive dismissal, so especially if you're actually hoping for that result, you'd best make absolutely sure that the changes you're implementing are objectively justifiable.

(10)  Get appropriate help

Small and mid-size employers often fall into the trap of thinking that they can save a few bucks by taking care of their HR and legal needs in-house.  After all, business owners and entrepreneurs are, by and large, intelligent and sophisticated people - how hard can it be to put together an employment contract or policy manual?  How hard can it be to properly discipline an employee or implement a performance improvement plan?  How hard can it be to properly dismiss somebody?

And the answer is that it's not a question of intelligence, sophistication, or difficulty:  It's a matter of expertise.  It's a matter of knowing, through industry experience, what actions are needed and what pitfalls are to be avoided.

As an employer, you really do have a choice:  You can pay at the front end of your employment relationships, or at the tail end.  If you pay at the front end, you're talking about budgeting a relatively modest amount for legal fees and HR consultants to help with recruitment, policy development, employee relations, and dismissals.  If you opt not to pay at the front end, you're very likely going to pay at the tail end for legal fees and substantial liabilities, the amount of which would make the front end costs look like pocket change.

Not to say that getting good assistance at the front end guarantees that no employee will sue you, or even that no employee will sue you successfully - there are no guarantees in life (or litigation, for that matter).  But it's a very good gamble that the work and expertise you pay for at the front end will pay off, not only in terms of reduced liabilities later on, but also in terms of having a productive workforce, and maintaining freedom as an employer to appropriately manage your workplace.

In other words, employers may well claim that they "can't afford" legal assistance, but that's a lot like saying that you "can't afford" business insurance - the reality is that you can't afford not to get appropriate legal assistance (i.e. from a lawyer such as myself).


These tips are not legal advice, but are for general information purposes and are primarily aimed at non-unionized workplaces.  In unionized workplaces, different considerations may apply, as the specifics of labour relations tend to be governed in great detail by collective agreements.  I would encourage unionized employers to contact me for a consultation (service and fee information to be provided) regarding how to correct difficult behaviour within the scope of the collective agreement.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.

No comments:

Post a Comment