High profile terminations for COVID-19 misconduct can be costly

Employers hoping to send a message with executive level terminations for COVID-19 breaches could get more than they bargained for, says Toronto civil litigator Stephany Mandin. 

A series of high profile dismissals involving pandemic travel have hit the headlines in the last few months – often at healthcare organizations, where adherence to COVID-19 protocols and travel rules has been a particular focus of management. 

In one case, a Hamilton, Ont. hospital parted ways with its CEO shortly after it emerged he had holidayed in the Dominican Republic in the face of government warnings against non-essential travel. 

However, both the hospital and the former CEO faced a fresh wave of outrage when it emerged that he could be due a further payment of more than $1 million, thanks to a clause in his contract that provided for 24 months’ salary if he was terminated without cause.

“There’s no doubt employers send a strong message when they part with a high-level employee, but they have to be careful what they wish for,” says Mandin, principal of Mandin Law. “Whatever moral outrage you may have about a person’s behaviour, their employment is still always governed by the their employment contract, applicable legislation (in this case the Employment Standards Act) and the common law.” 

“If you’re not terminating people for cause, then you could be exposing yourself to very high notice and severance payments, because people at that level typically have very large salaries,” she adds.

In those cases where an organization seeks to avoid a payout by claiming the Coronavirus-related misconduct justified the termination on its own, they should steel themselves for a fight, according to Mandin, who explains that the threshold for “just cause” is very high.

“Unless there is something in the employment contact that explicitly states this kind of travel constitutes just cause, it’s going to be very difficult to prove,” she says. 

While one-time incidents can constitute cause for termination, Mandin explains that case law indicates it is typically reserved for worst types of workplace misconduct.

“The person has to know what is expected of them and have an opportunity to fix their behaviour, unless their actions are egregious,” she says. 

In misconduct cases involving employees in leadership roles, Mandin says organizations – especially those in the public sector – should give serious consideration to options other than termination, including suspension without pay or a written warning. 

“Morally reprehensible behaviour will not always rise to the level of cause, so if you’re making a big payout to someone for notice and severance, from the public’s perspective, it can look like they’re receiving a windfall for an apparently warranted termination,” she says. “Some people will find it even more offensive for public money to be spent that way.”