Hiring Life: A NEW RECRUIT OVER PROMISES & UNDER DELIVERS..

A recent decision 1 by the Commission des relations du travail (“CRT”) highlights the plight of an employer faced with an employee who oversold his abilities during the job interview and later proves incapable of delivering on his promises. In this case, Laurentian Bank Securities inc. (“Laurentian”) successfully defended against a claim for dismissal without good and sufficient cause filed by a former employee.

The facts of the case are commonplace. The employee had
been a highly successful Investment Adviser with Desjardins
Wealth Management (“Desjardins”) for a number of years.
During a job interview with the vice-president of Laurentian, the
employee estimated that he could transfer to Laurentian 75% of
his portfolio, the total of which was worth $37 million of assets
under managements. His performance potential led to an offer
of employment from Laurentian and enabled him to negotiate a
generous compensation and benefits package.
During the first days of his new employment, days which prove
crucial from the perspective of client retention, the employee
made minimal efforts to retain the client base he had built over
the years and, ultimately, few clients transferred their assets to
him at Laurentian. Several months into his employment, he was
far from reaching his initial earnings objectives.
The disparity between his performance and projected earnings
became amplified with each annual performance review. Efforts
made by Laurentian to support the employee’s progress –
encouraging him to utilize his business development budget,
prepare a business plan, etc. – proved unproductive. After three
years of service with Laurentian, the employee was dismissed
for a failure to meet job requirements.

From the employee’s perspective, his lack of success was the result of a number of external factors unrelated to his abilities (for example, he was placed in an open-plan office that did not permit the requisite confidentiality to call his clients; he was denied a transfer to another branch; Laurentian hired the very Investment

Adviser whose book of business he had bought several years
earlier, and this new employee unfairly solicited his clients; he
was defamed by his former Desjardins partner, which explained
why his clients broke off their relationship with him after his
transfer to Laurentian). Moreover, the employee raised his health
condition as a mitigating factor; the pressure at work caused him
to develop depression, which left him unmotivated to solicit new
clients.

The constellation of explanations given by the employee torationalize his poor performance did not sway the CRT. Ultimately,the employee was regarded as an industry veteran, well aware of performance expectations. This factor appears to have been decisive in the CRT’s weighing of the evidence, as can be seen from a summary of its analysis below.

In cases of administrative dismissal, it is the onus of the
employer to demonstrate good and sufficient cause. In keeping
with the principles developed under applicable case law, the
CRT must verify that the employer’s action was not arbitrary,
discriminatory or unreasonable, and that the employer fulfilled its
obligations imposed by applicable case law. The CRT’s findings in
respect of the applicable criteria are summarized below:
Whether the employee was informed of the company’s
policies and the expectations set by the employer
The employee was experienced in the financial services industry
and familiar with the job requirements of an investment adviser.
Moreover, the goals set for him by Laurentian were standard
for such a position. Under the circumstances, the CRT concluded
that Laurentian’s expectations were reasonable and sufficiently
transparent.
Whether the employee’s shortcomings had previously
been identified.
The employee was repeatedly informed, both formally and
informally, that his performance was inadequate. He had even
been notified in writing that he was required to prepare a
business plan to improve his job performance.
Whether the employee received the necessary support
to address his shortcomings and achieve the performance
objectives.
The employee received appropriate support from Laurentian in
order to meet his objectives (e.g. by utilizing a business development
fund, launching an advertising campaign, working alongside
other advisers, etc.).
Whether the employee received a reasonable time to adjust
The employee was employed by Laurentian for three years and
was advised of his shortcomings at least as early as his first
annual evaluation. He benefited from a reasonable time to adjust
his performance.
Whether the employee had been advised that a failure
to improve would lead to dismissal.
The employee could not claim that he did not see the dismissal
coming. He was clearly informed that his job was in jeopardy
following his second annual evaluation.
The case serves to remind employers of the importance of
setting firm and reasonable performance objectives early on
in the employment relationship. Should a dismissal for lack of competence prove inevitable, what will serve the employer well in the event that litigation arises is evidence that the employee was advised of his performance deficiencies, that resources were offered to support the employee in realizing his objectives, and that
the employee was notified that a failure to improve would jeopardize
his employment. While the process may require time and
patience, it must be followed to avoid possible liabilities stemming
from an un-favourable ruling of unjust dismissal.

1 Daniel Denis v. Valeurs mobilières Banque Laurentienne inc., 2014 QCCRT 0517.

This article was written by GUY LAVOIE and RHONDA GRINTUCH of Lavery Lawyers, February 2015 and sent to MindHR with permission to "re-print" by the authors March 2015