Performance Management and Litigation: Why Documentation Matters

Municipal organizations face increasing challenges in protecting themselves without continually refining their performance management strategies. The evolving legal landscape highlights that even well-established processes leave room for improvement, particularly as it relates to communicating performance expectations and ensuring that those same expectations are properly documented. This article focuses on why documentation matters.

It is critical for employers to regularly provide their employees with timely, accurate feedback. This is not a new idea. However, given the fast-paced nature of municipal workplaces, it can sometimes be difficult to gather good documentation at the time of providing feedback and setting performance expectations. But the importance of this step should not be overlooked.

There are a variety of reasons why it is good practice to carefully document employee performance expectations. Obvious reasons include:

• Results: If employees better understand where they have gone wrong, how to succeed and consequences of failure, employees have an opportunity to improve.

• Good for employee morale: There are no surprises.

• Clarity: What people hear is not always what is said. Documentation provides clarity.

What is often missed; however, is how critical good documentation is for defending lawsuits and other workplace related claims.

Poor Performance and Termination

When an employer elects to terminate an employee for just cause, the employer has the burden of proving just cause in the case of both unionized and non-unionized employees. The evidentiary threshold required to sustain a “for cause” termination is high. The Supreme Court has said that the evidence must be “clear, convincing and cogent to satisfy the balance of probabilities test”.

Labour arbitrators take a similar approach with just cause terminations in the unionized context. Not only is the just cause standard high, it can be even more difficult to meet the standard under the Employment Standards Act, 2000 to terminate an employee without notice and without severance pay (where applicable) under that legislation.

Often times, employees are terminated for poor performance without any record of said performance issues. Not surprisingly, this can lead to disputes over the grounds on which they were terminated on. Where there is a lack of documentary evidence, the employer must then show that the employee had deficiencies worth termination without any record of such deficiencies. Without those records, it is next to impossible to persuade a decision maker that poor performance constitutes just cause.

Indeed, reported decisions show how difficult it is for an employer to rely on “poor performance” as cause where the employee has generally received positive performance reviews or where the employer has failed to communicate performance issues and expectations to the employee.

Courts have also demonstrated through damage awards that false or unsupported allegations of just cause can be costly for an employer.

Documentation is also relevant in defending other claims that may arise from a termination without cause that is based on poor performance which did not rise to the level of just cause. An employer may face allegations that the termination without cause was, for example, discriminatory under the Human Rights Code. Proper documentation regarding poor performance prior to termination can assist in defending against such allegations and therefore reduce an employer’s liability.

To protect from claims for damages and to avoid damage awards, employers must be diligent in consistently reviewing and recording performance of employees as well as expectations. It is also recommended that employers seek advice before terminating for cause.

Reasonable Management versus Harassment/ Bullying

In Ontario, the statutory definition of workplace harassment under the Occupational Health and Safety Act expressly excludes reasonable actions taken by the employer for managing or directing its work or the workplace. This would include, for example, imposing legitimate discipline or executing real performance management. But the line between harassment and performance management is not always clear. Repeated criticism, for example, may, depending on the circumstances, be harassment.

While employers are entitled to manage employees and impose discipline, many employees subject to performance management believe that performance management is a sham and that the process and/or discipline imposed constitutes harassment.

Indeed, there has been an increase in cases in which employees, rightfully or wrongfully, believe that they have been victims of workplace harassment and bullying as a result of efforts made by their employer to manage their performance. Employers are less likely to face, and are better able to defend, allegations of harassment and discrimination within their organization where decision makers and those responsible for performance management ensure that:

• the process for, and frequency of, performance management as well as discipline is clearly set out in a policy.

• performance management, and other forms of discipline, are carried out in a way that is non-discriminatory and is not based on stereotypes or discriminatory criteria.

• feedback is delivered to employees in a professional manner.

• employee privacy is respected and all information related to performance management remains confidential.

• formal and non-formal discussions regarding performance management and discipline are well documented.

Conclusion

Poor performance is a drain on municipal employers and negatively affects workplace morale. Performance management is a vital tool for employers to help ensure that employees are aware of job expectations and are able to perform their work. Assessing current documentation practices and procedures, along with implementation and consistent application, is critical for protecting the organization. Failure to do so can expose the organization to ongoing poor performance and/or legal liability.

Written by: Genevieve Cantin and André Nowakowski, Miller Thomson LLP