The ongoing saga between Gary Webster and the Toronto Transit Commission (TTC) provides a useful example to both employers and employees about the standard of misconduct necessary to terminate an employee for cause and the potential financial consequences of firing an employee absent just cause.
At a special TTC board meeting on Tuesday, Gary Webster, Chief General Manager of the TTC, was terminated "without cause." On Sunday, the Toronto Star quoted Frank Di Giorgio, a Toronto city councillor and TTC commissioner, as saying that up to five TTC managers could be removed for not "respecting the office of the mayor."
In Webster's case, the dispute centred around his level of support, or more accurately his lack of support for Mayor Rob Ford's transit plan. The plan envisions scrapping the above-ground light rail transit (LRT)-based Transit City plan in favour of building more subways and placing the LRT tracks underground.
At the special city council meeting on February 8, Webster answered questions from councillors and expressed his disagreement with Mayor Ford's plan, stating that above-ground LRTs provided a better value for money than subways and would fully accommodate anticipated passenger loads.
This stance appears to have upset Mayor Ford and his supporters on the TTC board, who considered Webster's future with the TTC and decided that he didn't have one.
Putting aside the subway vs. streetcar debate, one question that many people might have about this situation is: Can the TTC fire Gary Webster for disagreeing with the Mayor?
The short answer to that question is "Yes." The slightly longer answer is "Yes, but it is going to cost them."
The reality is that under Canadian law, an employee can be fired at any time, for any reason, except if that reason violates legislation, such as human rights. The caveat to this is that if an employer decides to terminate an employee's employment without just cause, the employee is entitled to reasonable notice of their dismissal, or (more often) pay in lieu of notice.
An oft-quoted description of the circumstances that can amount to just cause is found in the Ontario Court of Appeal's decision in R. v. Arthurs, ex parte Port Arthur Shipbuilding Co.:
serious misconduct, habitual neglect of duty, incompetence, or conduct incompatible with his duties, or prejudicial to the employer's business, or if he has been guilty of wilful disobedience to the employer's orders in a matter of substance...
While some might argue that Webster has been disobedient to Mayor Ford by not supporting Ford's transit plans and building a case for subways, that argument would be unlikely to succeed in court. The obligation to prove cause falls on the employer and is a heavy burden to meet, especially in the case of long-service employees such as Webster, who has been with the TTC since 1975.
It is also important to consider that Webster, as Chief General Manager, is not accountable to Mayor Ford, but to the TTC board and city council as a whole, who, incidentally, supported Webster's opinion. While some TTC commissioners may disagree with the opinion provided by Webster, it appears that he provided it in good faith and in accordance with his duties.
In these circumstances, Webster's conduct falls well short of establishing just cause for his dismissal. It appears that the TTC board agreed with this analysis because the motion removing Webster from his post stated explicitly that he was being dismissed without just cause.
While the TTC is entitled to fire Webster, he will be entitled to financial compensation. In this regard, the estimates thrown out by Councillors Josh Matlow and Karen Stintz of $500,000 are likely not far off the mark. There is no set formula to determine the notice or pay in lieu of notice to which an employee is entitled upon being dismissed without cause.
Instead, the court balances a number of factors including the employee's age, position, salary, years of service, and the availability of similar employment. Given Webster's age, his 36 years of service, salary of $281,931.37, senior position of Chief General Manager, and the lack of similar jobs, Webster is likely entitled to compensation comprising his salary, bonus, and benefits, that he would have earned over a period of reasonable notice which would be at or near the maximum period typically awarded by the courts of 24 months (two years).
The lesson for employers and employees about this situation is that it is important for both parties to understand their rights. While an employer has the right to manage its workforce and dismiss employees even without cause, employees have a corresponding right to reasonable notice, or pay in lieu of notice, which in the case of long-service, high-salaried employees such as Gary Webster, can be significant .