Vol. 10, #2-April 9, 2018 ALLAN GOLD’S BLOG
Next blog post of weekly series over 3 months on contracts for
company executives & owners of family-small businesses
TODAY’S TOPIC: “EMPLOYMENT CONTRACT – The case of the bad hire, the good hire and the “probee”*
the terribly bad, the good who is psychologically abused & the ugliness of sexually harassed
SPECIAL ANNOUNCEMENT TO READERS
√ Hello Readers. Please be informed that I write a blog for my professional community – it’s titled “Gold’s Legal Minute*GLM*” . Because you do not have a lot of time and since time is money, I aim for a quick and easy read. Since I practice primarily in such fields as corporate and commercial law, civil litigation, etc., the subject matter is more or less in such areas. In addition, seeing that I am passionate about the well-being of older people, and as I also practice in the field of civil law relative to elder law, I write about this area as well. Furthermore, I write about topics in the news in order to highlight what’s then legally at issue.
√ In each blog post, I shall deal with a legal notion or raise a legal issue and deliver, strictly for informational purposes, some commentary respecting the same. As per the format, I shall first answer the question, “Why you should read this?” Next, in the facts section, to illustrate some of the things in play, I will recount a fictional story of imaginary characters or companies, not based upon any person or enterprise in real life. For fun, it will be titled “The Case Of The …”, this in the style of the vintage “Perry Mason” TV show (1957–66). And then, through the sections, “Judgment”, “Analysis” and “Lesson Learned Or Take-A-Way”, I shall provide my take on the facts and some thoughts thereon. At the finish, I will offer a “Closing Thought Of The Day” plus a preview of the next in the series.
√We have re-launched the blog, such with a series over 3 months on contracts, especially geared for company executives & owners of family-small businesses. Kindly note that as per our schedule, we will usually make new blog uploads each Monday. Some weeks, usually on Wednesdays, there will be one or more bonus uploads.
WHY YOU SHOULD READ THIS BLOG POST (next of weekly series over)
First, this blog post series is written especially for business people, ranging from proprietors of small-family enterprises through to executives of mid-to-large corporations. The assumption is that they routinely make contracts. The proposition is that it’s good business to make each contract sound and profitable. The premise is that a good contract can mean money and profit. And if you’re a member of this group, this is for you.
Second, you know that employment is an essential feature of economic activity. From the perspective of the employer, it’s all about productivity, cost of labour and ultimately profit. But in the view of the worker, it’s about making a living and advancing a career. The contract of employment is at the base of the relationship between the person employing and the person being employed. Dismissal is the end, or is it? Intrigued? Please continue reading.
A. FACTS OF THE CASE
Note to Readers: In this space, we will recount fictional stories of imaginary characters or companies, not based upon any person or enterprise in real life.
Scenario #1: The Adventures/Misadventures of Dick the Boss Man at MFG Inc.
Scene #1: Dick knew how to build and rebuild engines. With next to nothing, except for sweat equity, he started his business known as MFG Inc., He built it from the ground up with his bare hands. He soon had a showroom and a service department. Dick’s brother, Tom was Service Manager. Mr. Bean Counter had the title of Accountant-Office Manager. Dick tells everyone that he is the Boss Man. According to him, this gives him the right to yell and scream. At the best of times, Dick does not have boundaries. To further make his point, perhaps adding insult to injury, he likes slamming a door in the face of the target person of the moment. And here’s the kicker. If someone threatens to take him to court, he picks up the phone, saying that he’s calling Bob the lawyer, the company attorney. And he usually adds this little beauty: “Here’s a little warning from me to you. Regardless if right or wrong, don’t mess with me kiddo, … I’ll crush you!”
Scene #2: One day, a fellow named “Bad Guy” showed up unannounced, seeking a job. When asked his name, he responded “Good Guy”. (He did not offer his nick name which was “Trouble”, since that was what most people found when they dealt with him.) It’s noteworthy that Trouble had convictions for theft from prior employers. Dick gave him an application- Trouble filled it out in two minutes flat and returned it to Dick. Needing another set of hands that day, Dick hired him on the spot. He neglected to do a legal-credit check, call references, etc. – he didn’t even read the application. (N.B. If Dick would have verified his social insurance number, he could have discovered Trouble’s real name and his many misdeeds.) Trouble eventually worked himself up to assistant service man, answering to Tom, his direct supervisor. He was being paid $20 an hour. One Saturday morning, Junior, Dick’s 8-year old son, came to work with good old Dad. On seeing Trouble. Junior asks: “Do you steal?” Flabbergasted by the question, Trouble asked: “Why would you ask such a question?” Junior answered: “Last Sunday, my uncle, Tom, came to my house and told my father that he thought you were stealing.” Although, his shift was not yet over, Trouble packed up his back pack and left without another word. Dick was surprised, but later understood when he spoke with his son. The next Monday, Dick called some customers handled by Trouble, and while they suspected Trouble had stolen items from them, nobody had any proof thereof. Once several weeks had passed with Trouble not calling, reporting for work, Dick instructed Bean to record him as fired for being a thief , stopping his pay. Dick thought that with the dismissal, this would end the Bad Guy episode.
Scene #3: In 1987, Jane was hired as book-keeper at MFG Inc. She is thus a long time employee apparently because her work is more than satisfactory. The latest review from Bean Counter was excellent. Since January 1st , 2017, she has been paid $35 an hour. She received a great bonus last Christmas. Dick works with Jane; but she’s his preferred victim, especially yelling at her, nitpicking, criticizing her for every little thing. There’s usually, at least one big bout each and every week. And every other week, he even makes Jane cry.
On November 1st 2017, Dick called Jane into his private office and told her, in order to help pay for executive bonuses, she must start to record in the payroll book, one and one half hours less each day for every plant worker than that which was indicated on the time cards; in this fashion, she would short pay the blue collars. He also asked her to go back two months and “correct” the worker pay figures and make a charge back for overpayment, this in order to bump up the executive bonus amount. He also ordered her to record the short numbers in the official register, but the real ones in a private, black book only for him. Jane, not taking him seriously, returned to her modern desk, with a state- of- the- art computer, saying that this was not a good idea. A few days later, Dick asked again. Jane refused, saying it was illegal. Dick said he was the boss and what he says goes. On the Friday of the same week, Dick brought up the subject again, but Jane did not budge. On Monday, the next week, Dick met her at the door, saying that she was now in sales strictly on commission. Jane looked upstairs and saw another woman at her desk. Smiling, Dick asked her for $25 – the price of this year’s golf shirt with the embroidered company logo.( In past years, she was provided one, free of charge.) Dick directed Jane to her new work station in the cellar beside the furnace. She found her desk to be a dirty, beat-up metal hulk and the computer was her old one – it had been replaced two years ago. It was very cold and damp in the cellar. (She expected that it will be hotter than ever during the summer.) And there was a sound system pouring out top 40 hits at an extreme volume. And there was no desk phone – she had to use a wall phone in the factory. She stayed a few weeks, never receiving a pay check –since as she was repeatedly told, she had made no sales. On Monday, November 23, 2017, she called at 9:00 A.M. and spoke to Mr. Bean Counter and said that since she was in the cellar, she was not feeling well and going to the doctor. Fearing a claim for sick leave, Bean fired her. And Dick thought that with the dismissal, this would end the Jane episode. The next day, Jane called Dick. He scolded her for not doing what she was told. He even had the sheer effrontery to ask her if she liked being unemployed. Jane could not believe the whole thing. She said that she would sue the pants off MFG Inc.
Scene #4: April is a very pretty 21-year old brunette with great legs. She had her second interview last week. The job was receptionist-clerk. Dick told April that she needed to pass a week of probation. This was her first day. She was told to report to Cynthia, a clerk on the job the longest. On April’s arrival, she was directed to the antique wood desk at reception and asked to answer the phone. She wore a navy blue business suit, nothing sexy or revealing. (She was taught by her mother to always wear suitable office attire.) Yet, she still caught the eye of Dick; and he immediately started working his way over to her. Dick called April into his private office and closed the door. Staring at her, he said that he liked her blouse. He then said that it was office policy for pretty young girls to have their top button open. Putting his hand on her shoulder, he asked her out for lunch. But April shot him down nicely and politely. Dick was not a happy camper – he made a second overture, asking about a drink later, and while winking, saying that it would be a special happy hour. April stood her ground and said: “No thank you.” He fired her on the spot. Dick yelled: “Don’t ask for any pay – you did not even get through your first day.” April broke down in tears and ran to the ladies washroom. Cynthia ran to comfort her. Dick yelled some more and shouted: “Cynthia – you’re fired too.” The ladies then ran to call their lawyers. Dick thought that with the dismissal, this would end the April episode.
To make a further point, adding to the discomfort of others, Dick slammed his office door. Feeling very satisfied with himself, he called Bob the lawyer.
So readers, does MFG Inc. have a problem? 
B. JUDGMENT
No, MFG Inc. does not have a problem – it has many problems. Indeed, Dick is MFG Inc.’s worst enemy, creating problems when and where they don’t exist. And suffering from foot and mouth disease, Dick makes matters even worse by repeatedly putting his foot in his big mouth. And yes, Mr. Bean Counter also erred.
C. ANALYSIS
Let us put these cases under a microscope.
Mistake #1: Employer tolerating supervisor abuse, etc., bad workplace
Of course, if a boss, you should be businesslike and civil and courteous when dealing with people. But if an office bully out of control, making a worker cry, this is not a good thing. And if it happens often – it’s a good indicator that your bossy style might be too harsh, offensive. Indeed, know that it’s like ‘needles and pins’ and when you push …push …push, and eventually, when push comes to shove, an eruption will likely occur and the company will find itself at the wrong end of a lawsuit. And the aftermath could get real nasty.
At MFG Inc,, it’s anything but “Fun with Dick & Jane.” Dick is a loudmouth manager with anger management issues. He might be the boss, but he has no right to terrorize his staff, yelling and screaming at the office of MFG Inc. This contributes to making the work environment of MFG Inc. at the very least, unpleasant, if not more, hostile and badly in breach of the law. And a supervisor cannot browbeat a worker. Abuse has no place whatsoever in the work place. MFG Inc. could be held liable for the very bad behaviour and misdeeds of Dick.
Mistake #2: Employer failing to hire properly, doing due diligence beforehand
If a good company, you know how to hire people. Of course, you need to weed out problems before they occur.
Bad Guy was a bad hire. But, MFG Inc. did it to itself; and Dick was negligent. Of course, Dick was wrong in not reading the application. But more, Dick could have identified this quitter-thief beforehand, just by checking out references, making verifications, etc. Indeed, Dick should have known the hiring drill and carried it out. Here is the “Gold’s 10-Steps to Better Hiring”: (1) Identify and outline the position; (2) Write up a job description; (3) Upload job posting to company web site , key job sites and also advertize widely as needed; (4) Screen candidates by reviewing resumes whilst using specialized computer programs ; (5) Prepare well for interviews by making assessments and getting input from colleagues ; (6) Conduct the interview properly; (7) Verify facts in resume and also perform background checks; (8) Work the number of candidates down to a short list and then select the best one; (9) Make a detailed job offer in writing ; (10) Provide a new employee informational package in order to integrate the new hire as quickly as possible .
Mistake #3: Employer should not register Bad Guy as fired
While there are suspicions about Bad Guy, having stolen from MFG Inc., the firm does not, as of yet, have proof. Instead, it should note “voluntary departure” (i.e. , quitting) as the reason for his not now working at the company. You see, this is a fact. Indeed, Bad Guy has quit by not reporting for work without explanation for several weeks. However, it should also add a note in the paper work, that MFG Inc. considers him also dismissed for justifiable and sufficient cause – the reasons include: a) Departure (before the shift was over) without notice and permission; b) Not reporting for work (repeatedly) at the work place at the start time; c) Complaints by customers; etc.
Dick thought that with the dismissal, this would end the Bad Guy episode. While it’s not probable, it’s still possible that this would not be the last word heard about Trouble. As for example. once this departed employee applies for unemployment insurance, there could be some pushback against MFG Inc.
Mistake #4: Employer cannot ask employee to do something illegal
MFG Inc. doesn’t have cause to dismiss Jane. She knows that everybody has a choice; and “following orders” is not an excuse when breaking the law. She was justified to refuse Dick’s order to dock hours from workers. It’s illegal to take money away from someone and give it to someone else . Furthermore, it’s not possible to expunge history; and it’s against the law to have two sets of employment records- one that is real but hidden, another false to exhibit to the authorities.
Mistake #5: Constructive Dismissal
MFG Inc. is getting very close, if not actually getting there, when it comes to a constructive dismissal, this due to its replacing one job description for another, changing the job from an hourly paid worker to one strictly on commission, altering benefits, etc.
Mistake #6: Psychological Harassment
MFG Inc. is getting very close, if not actually getting there, when it comes to psychological harassment, this due to its moving her to inhabitable office premises, providing her deficient tools, suffering upon her undue temperature and high noise pollution, etc.
Mistake #7: Firing when worker going to doctor
MFG Inc. is not going to escape by firing an employee when alerted that she is going to a doctor, perhaps from a work –related illness or condition.
Dick thought that with the dismissal, this would end the Jane episode. But given the context, and the numerous breaches of the law, it’s probable that Jane will make one or more legal demands against MFG Inc.
Mistake #8: Sexual Harassment
Sexual harassment is against the law. Dick crossed the line. Asking for greater cleavage visibility is a BIG ‘No, No’. Invading the space of an employee and touching his/her body without permission is a BIGGER ‘No, No’. And pushing her to come out for a romantic interlude is one of the BIGGEST ‘No, Nos’. Firing her for not succumbing to his advances is another illegality.
Dick thought that with the dismissal, this would end the April episode. But given the new environment of corporate sensitivity for sexual harassment and women empowerment, and the numerous breaches of the law, it’s probable that April will eventually make one or more legal demands against MFG Inc.
D. LESSON LEARNED OR TAKE-A-WAY:
First, when it comes to employment matters, you should have learnt that business people need to follow the laws respecting labour standards, etc. Furthermore, for the sake of retention, making your company a great place to work will build loyalty and also pay dividends. Another lesson is that, if you don’t want things to go badly, you should have the better sense to always check out applicants thoroughly before hiring them. Indeed, you shouldn’t look for ‘Trouble’ because everyone knows, that it will usually find you soon enough. Another message is that you should never single out, attack and psychologically persecute an employee. While it will be daunting for that person, it will probably boomerang, stinging the attacker where it will really hurt…in the pocketbook. Instead, you should just leave well enough alone. And of course, there is zero tolerance for sexual innuendo/advances towards workers. Everyone at work needs to be respectful, minding proper manners, day in, day out. And if you follow these rules of engagement and staff management, this should contribute to your keeping your house in order. But if and when a manager crosses the line, take a hard line there against – this will bode well, in the long run, for better operations and profitability.
CLOSING THOUGHT OF THE DAY: Hiring is Good Business, Also Good For Business and Also Good For You!*
If self-employed or a micro-managing executive, running a “one man show”, this might work up to a point; but as sales increase and the enterprise-division grows , two things will likely happen.
You might become even more of a juggler due to increased demand on your time. And as pressure is brought to bear, you’ll soon stretch yourself too thin, until as the song title says, “Something’s Gotta Give.” On this topic, I look to Brian Dyson, the Coca-Cola CEO, who was quoted as saying: “Imagine life as a game in which you are juggling some five balls in the air. You name them – work, family, health, friends and spirit – and you’re keeping all of these in the air. You will soon understand that work is a rubber ball. If you drop it, it will bounce back. But the other four balls – family, health, friends and spirit – are made of glass. If you drop one of these, they will be irrevocably scuffed, marked, nicked, damaged or even shattered. They will never be the same. You must understand that and strive for balance in your life.” (Source: https://www.goodreads.com/quotes/92129-imagine-life-as-a-game-in-which-you-are-juggling)
In the alternative, you’ll eventually find that you really cannot do it all. But nevertheless, you’ll still try, thinking as the famous adage goes, “The show must go on”. This will probably produce one lousy show, for which the curtain will come down prematurely. And once permanently closed, it will leave you very disappointed, perhaps asking: “What did I do wrong?” Gary Keller (known for The One Thing: The Surprisingly Simple Truth Behind Extraordinary Results), has the answer: “ You need to be doing fewer things for more effect instead of doing more things with side effects.” (Source: https://www.goodreads.com/author/quotes/78754 .Gary_Keller)
The foregoing is why you should hire one or more good people. This is not a small thing. In contrast, it’s a big deal! But when building an enterprise, each good hire is like adding another strong structural post to your establishment, thusly making it even more sound from the centre out. And if your new hire works out really well, know that this employee will likely become a money maker in his/her own right!”
* ©/TM 2015, 2016, 2017, 2018 Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED
G. PREVIEW OF NEXT IN THE SERIES: ….. CONTRACT – “The case of the disappearing check book and bank statements”*
Next time, continuing on with the theme of entrepreneurship, and the overall subject of contract, we will look at another type of contract, this one being very common in the business world, notably, this time the one for stockholders in a corporation. This is where parties organize their association in a corporation, reciting in advance, their undertakings and expectations setting down their rights, obligations and recourses. It is known as an “ Unanimous Shareholders Agreement” (USA, for short). The deed starts with the designation of the parties. In this writing, there are money clauses delineating the remuneration. In addition, there is a default clause, a resolutory clause – this is the forfeiture of term, etc. There can also be special terms and conditions. Furthermore, there are standard form provisions, wherein the parties recite their usual declarations and undertakings. Of course, it could be crucial if and when you need to “divorce” your business partner, especially if he/she holds an equal shareholding. Not familiar with this? See you next time.*
* ©/TM 2015, 2016, 2017, 2018 Allan Gold, Practitioners’ Press Inc. – ALL RIGHTS RESERVED
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NOTICE-CAUTION-DISCLAIMER
The material provided herein is of a general nature, strictly for informational purposes. The interpretation and analysis is not to be misapplied to a personal situation with a particular set of facts. Under no circumstances, are the herein suggestions and tips, intended to bring a reader to the point of acting or not acting, but instead, the hope is that they are to be a cause for pause and reflection. It is specifically declared that this content is not to be a replacement of or substitution for legal or any other appropriate advice. To the contrary, for more information on these presents, related subjects or any other questions, it is the express recommendation of the author that everyone seek out and consult a qualified professional or competent adviser.