What do you do about a problem manager?

This question is really two different questions: What should an employee do when his or her supervisor is a nightmare? And what should the employer (i.e. upper management) do when it comes to their attention?

A recent Star article discusses a survey of HR professionals indicating that "bosses from hell" are a big problem. Most employees try to deal with it, look for another job, or just leave. But there are significant legal facets to the problem.

You've heard the term "constructive dismissal". Most employees have heard it, have a vague idea of what it means, but are understandably (and usually rightly) reluctant to put much reliance on it. Nightmare managers can result in a type of constructive dismissal. Or other problems. In fact, it can be a big deal.

Aside from the practical difficulties of having a nightmare manager - lower morale, increased attrition and recruitment costs, possibly lower productivity - such a manager exposes the employer to potentially significant liabilities, and even moreso as our society becomes more sensitive to mental illness.

In 2004, there was a ground-breaking labour arbitration in the TTC: A fellow who had historically been a good employee ended up working under a manager with whom, to put it mildly, there wasn't good chemistry. His performance reviews took a dive, his mental health and personal life suffered; he eventually transferred out to a lower-paying position in the organization. Again, his performance reviews were stellar, he was happy, things were good again...until the manager transferred too, and ended up supervising him again. Suffice it to say that it wasn't a good scenario. Led to debilitating depression and paranoia.

The Arbitrator found that the employer had breached its obligations under the Occupational Health and Safety Act, by creating such a hazard to the employee's health. The Arbitrator imposed onerous obligations on the TTC, even in addition to the financial award.

In the civil litigation field, Shah v. Xerox is the equivalent. The trial was in 1998, and the Court of Appeal dismissed the appeal in 2000. Mr. Shah worked for Xerox for over 12 years, and for most of the time was successful, receiving good performance reviews, bonuses, pay raises. Then a new manager came in, and was extremely and unjustifiably critical of Shah's performance. So Shah resigned, and was found to have been constructively dismissed.

This case was decided before the Supreme Court decided Wallace, which gave rise to a decade-long period in employment law where "bad faith damages" were routinely awarded. Shah-type cases typically attracted Wallace damages; that wouldn't happen now, but there remains the potential for aggravated damages where an employee can show illness or injury resulting from the misconduct.

Another recent shift in the law is Bill 168: Employers now have to have policies in place to deal with harassment, and are more expressly obligated to deal with harassment. (The TTC case used to be exceptional. With Bill 168, it might just become the norm.) There's a flip side to Bill 168, though: If an employer has implemented an anti-harassment policy, it may become more difficult for an employee to claim constructive dismissal on the basis of harassment unless he or she has availed herself of the recourse within the policy first.

A more recent case, Piresferreira v. Ayotte, involved a Bell Mobility employee who was pushed by her manager. She had a long history of good service, but this manager was highly aggressive and intimidating, and had been critical in his reviews of her. The 'push' amounted to constructive dismissal and battery. The trial judge awarded damages in excess of half a million dollars. (!!!) The Court of Appeal agreed that she had been constructively dismissed. found that the trial judge had erred in how it awarded damages, and reduced the award to pay in lieu of notice plus $45,000 for mental suffering due to the manner of her dismissal. The Supreme Court just dismissed an application for leave to appeal, this past week.

Large and small employers alike have problem managers (note the employers involved in the above cases), but a lot of these cases have similar earmarks, similar red flags. When a long-service employee with a solid performance history suddenly starts having performance or disciplinary issues, something's wrong. It could be something in the employee's personal life, and so an employer can't be too invasive in trying to find out what's up, but it could be that something has changed in the employment relationship itself - reporting structure, duties, etc. - and if that's the case, then the performance issues are often going to be the employer's fault. So an employer needs to watch for those red flags, because they might be signalling potential liability.

There should be clear expectations of how managers deal with employees; clear boundaries of unacceptable conduct. Managers can and should be disciplined for mistreating employees.

Sometimes it's just a personality conflict; nothing inherently wrong with what the manager is doing in general terms, but a lack of chemistry means that the employee and manager simply can't work well together. Where possible, this can be resolved by changing the reporting structure in a non-punitive way, which doesn't negatively affect the employee. Where that's impossible, it may be necessary to terminate the employment of either the employee or manager, but remember: A personality conflict is not just cause for termination. The termination must be on notice (or with pay in lieu thereof). Seek legal advice prior to doing so. It will usually be a better idea to terminate on notice early, ending an acrimonious relationship before it becomes toxic, rather than to wait and run the risk of a constructive dismissal claim with a claim for aggravated damages on the side.

An employee who feels that a manager is acting inappropriately and making the workplace intolerable should seek legal advice prior to taking any steps that may have detrimental consequences to his or her employment.

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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.