The Dingwall Paradigm?
I watched a bit of question period in the House on CPAC last night, not surprisingly the CPoC was hammering away at the government over David Dingwalls resignation and the severance package he is going to get – the answers the Martin government were giving did not satisfy me and should not be sufficient to satisfy the rest of Canada either.
In a nutshell Dingwalls expense claims included a number of items that are very questionable, there’s an investigation into that going on now, and Dingwall resigned over it all; however that’s not the point of this post and I’m not going to comment on that aspect of the affair. I am going to ask aloud if we are seeing the creation of “The Dingwall Paradigm” where the conduct or performance of an employee is called into question and, rather than stick around and defend themselves, that employee resigns and expects a severance package for doing so.
Harper brought up a very good point, if I quit my job I have little or no hope of receiving unemployment benefits, let alone a nice little severance package. If the Liberals are giving Dingwall the golden handshake because they really are concerned about a law suit by him let their hearts not be troubled – given the circumstances I have little doubt that average Canadians will agree with me that the risks are more than acceptable, and, that we’re not only willing to take that chance, but to fund with our tax dollars, government court costs for fighting any potential legal action arising from it rather than see life breathed into this sort of precedent setting practice.
I’ve done a fair amount of HR policy work in the last few years, and have seen a considerable shift in approaches to “severance”.
Originally “severance” was the amount your employer owed you under law if you were laid off, without just cause and without the required notice period. In other words, if your contract or employment letter entitled you to a month’s notice but your employer was laying you off immediately, you were entitled to a month’s severance: if you were going to work another week, you’d receive three week’s severance, and so on. If you got the month’s notice and worked to the end of the month, you received no severance at all.
Tnat only applied to termination without cause. If the employer had cause (documented failure to meet employment standards), they could usually terminate you immediately, without severance.
In the late 1970s and 1980s, the private sector, followed by Government, began to offer severance packages to candidates they really wanted to attract, usually as part of a larger package of incentives that could include hiring bonuses. Originally these were tied to merit, performance AND longevity of service; within a few years they simply became part of what a senior manager thought he/she was entitled to. This led to the grotesque spectacle of grossly incompetent CEOs rewarding themselves with the legendary golden parachutes, exiting their companies just before bankruptcy, having paid themselves handsome severance packages.
Having said all that, there is NO legal obligation in employment to provide a severance package in the case of a resignation, unless it’s part of a contract. Period. There have been lawsuits in the US, in the corporate world, where executives argued successfully that on the grounds of precedent and verbal commitments they were entitled to an exit bonus. That’s never been tried in Canada, and under the current circumstances Dingwall would be absolutely nuts to try.
I always read between the lines on these kinds of severance issues, and I think Harper has as well.
Balb is right that there is no legal obligation to provide severance if an employee quits providing that there is no contractual exit agreement in place.
In the corporate world, if you are going to accept a senior management role like CEO or even VP it is now rare to do so without demanding an exit package as a condition of employment. Dingwall was in a senior role, the most senior role at the crown corp and I would be amazed if he did not negotiate an exit package when he took the job.
The alternative is that the Martin Liberals fired him but are publicly putting a happy face to save Dingwall’s face by running with the “resignation” story to the press.
Harper, in all liklihood is trying to expose in fighting within the Liberal ranks (as this would be a good example) or he is trying to have the details of the exit agreement made public to be used as another example of pork barrel politics by the Liberals.
According to Bound By Gravity
If it’s “shut up and leave quietly” money the tax payers are under no legal obligation to pay it – and should not be forced to.
“David Dingwall’s contract was shown to contain no clauses pertaining to severance.”
If so, then I tend to believe he was fired and the “official line” is resignation.
If that is the case, and it probably was, there is still no legal requirement for severance.
au contraire, mon ami!
It depends on the circumstances of the firing. If it was for cause then you are right he should not be paid. If it was to avoid embarrassment or further scrutiny by the media and opposition then Dingwall deserves severance.
Don’t get me wrong, I agree with your sentiment here. I am just careful not to endorse any precedent (like refusing severance when the outrage meter, or most other reasons) is the motive for doing so. Employment law and precedent have evolved for a reason in this area: to avoid arbitrary dismissal of people by their employers without justification and compensation.
If he was simply let go then severance is part of that, if he was fired with some stated cause he could either accept that or launch a wrongful dismissal suit and see what a judge thinks, if he resigned under pressure it is still a resignation – the option to refuse and force the employers hand was always there.
Dingwall was appointed by Chretien. Dingwall is not cozy with the rather ruthless Martin camp. It is very conceiveable that they approached him and said something to the effect: “you are out buddy boy. In exchange for your resignation you will get severance. Oh, and btw, you WILL keep your mouth shut.
Just a theory of course, but there are several ways that this kind of thing can play out that are not quite as black and white as you suggest.