Every employer has a movie or two in the making based on the outrageous tales of its most incompetent employees.

Maybe the employee harmed a patient, lost a million dollars, angered a valued client, missed a critical deadline, or did something so dumb it put the company’s reputation at risk. Once an employee has demonstrated such incompetence, the employer usually loses confidence in the employee’s ability to do the job and is keen to terminate employment.

Unfortunately, it’s not enough that your employee has been dumb, or even dumber than most; only the employees who have demonstrated "gross" or "serious" incompetence can be terminated following a single mistake or incident.

It’s well-established that employers can demonstrate just cause for terminating poor performers if they can show that:

  1. Job performance standards were communicated to the employee;
  2. The employee was given suitable instruction to enable him to meet the standard;
  3. The employee was incapable of meeting the standard;
  4. The employee had been specifically warned that failure to meet the standard would result in dismissal; and
  5. The employee was given a "real opportunity" to improve his performance before termination.

It’s also established that warnings may not be required when the employee has demonstrated "serious" incompetence – when performance is so grossly deficient that it should be obvious termination is the only outcome.

Defining gross or serious incompetence

Courts have not provided a clear explanation of the difference between "serious incompetence" and mere "incompetence", making it difficult to determine when an employee has acted so incompetently that summary dismissal may be justified The Newfoundland Supreme Court in Murphy v. Sealand Helicopters, after finding it impossible to set down a comprehensive definition of "serious incompetence", suggested considering:

  • The act committed;
  • The employee’s duties and responsibilities to the employer;
  • The nature and consequences of the breach; and
  • Whether the act prejudices the safe and proper conduct of the business.

The Nova Scotia Supreme Court, in Dowling v. Halifax, added:

  • Whether the allegations have been clearly proven;
  • The length of service of the employee (with greater leeway given to longer serving employees);
  • The employee’s previous record; and
  • Reasonable and feasible alternative methods to deal with the situation.

Incidents that in isolation may not demonstrate serious incompetence, might cumulatively justify dismissal. Such was the finding in Penney v. Labrador Inuit Development Corp., where the employee, who was responsible to implement programs to improve the economic welfare in an Inuit community, not only failed to implement any programming, but hired incompetent bookkeepers, failed to maintain financial statements and was late filing corporate taxes. In Roberts v. Colchester YMCA, however, the Nova Scotia Labour Standards Tribunal found that the combination of poor management skills, poor staff relations and use of funds without specific authority wasn’t sufficient to justify terminating the general manager for serious incompetence.

Courts and tribunals are reluctant to uphold terminations for gross or serious incompetence

There are few examples when terminations for serious incompetence have been upheld. Several courts have said it’s a difficult task for an employer to prove that an employee has shown serious incompetence. Many behaviours that seem to be both serious and demonstrate incompetence fail to meet the bar. For example, courts have found that the failure to follow employer policies, even where it results in loss of business or income, isn’t serious incompetence. Likewise, failure to grow a business or develop a new business framework, even where the employee was specifically hired to perform those tasks, failure to meet a sales target and failure to identify a cash shortfall have all been found not to constitute serious incompetence.

Examples of gross or serious incompetence

Due to the fact-specific nature of the analysis, what justifies termination for serious incompetence will be different in every workplace.

Courts have, however, upheld terminations where the employee’s incompetence has put another person at risk of physical harm, for example where:

  • A nurse failed to follow policy when administering medication to patients.
  • A radiation technologist, charged only with performing scans, approved a patient for a scan, putting the patient at risk of harm.
  • A helicopter pilot failed to follow flight policy, which caused or contributed to a serious accident.

Where significant money or inventory has gone missing, the employee may or may not have demonstrated serious incompetence, depending on the surrounding circumstances. A termination was upheld where the employee’s habitual refusal to follow several policies resulted in a shortfall of $120,000 on the quarterly inventory. On the other hand, an employee who acknowledged responsibility for the loss of an entire shipment of goods was found not to have demonstrated serious incompetence.

What this means for you

To make sure you’ll get a happy ending, proceed with caution before terminating an employee for a single incident of incompetence. If no significant financial or other harm resulted and no person was placed at risk of physical harm by the behaviour, the termination may not be upheld.

If you do decide to terminate for serious incompetence, ensure the behaviour and its consequences are well-documented and terminate as swiftly as a diligent investigation will allow.

If you want to terminate but are unsure whether the employee demonstrated "serious incompetence", you have two options:

  1. Begin the process of warning the employee that he/she isn’t meeting standards and documenting the opportunities given to him/her to improve; and
  2. Alternatively, if your faith in the employee is so utterly destroyed that you just want them gone, terminate without cause and provide the employee with pay in lieu of notice. (Note, however, in Nova Scotia this option doesn’t exist for employees with 10 years’ service or more).

With the right approach, both your dumb and dumber employees can be removed from the workplace without you starring in a courtroom drama.