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CANADIAN HR LAW
Jun 12, 2012

When trust has been destroyed: Just cause for dismissal

Don’t react hastily to misconduct
    

By Stuart Rudner 

I write frequently on the issue of summary dismissal, and specifically how employers should assess whether they have just cause to dismiss an employee. One fundamental premise is that, in doing so, employers cannot focus solely on the alleged misconduct.

Our courts have clearly established a requirement that while misconduct may warrant discipline, in order to assess the appropriate level of discipline, a contextual approach must be adopted that takes into account all relevant circumstances.

This will require consideration of, effectively, the entire relationship, including:

• length of employment

• prior misconduct

• prior discipline

• the nature of the employee’s position

• the level of trust required

• any other relevant circumstances.

The courts will require that the severity of any discipline imposed be proportionate to the egregiousness of the misconduct. In other words, the punishment must fit the crime.

In the leading case of McKinley v. B.C. Tel., 2001 , the Supreme Court of Canada wrote:

“More specifically, the test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or indirectly inconsistent with the employee’s obligations to his or her employer.

In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonesty warranted dismissal.”

In recent years, there seems to have been an increased focus on the investigation of misconduct. When I wrote You're Fired!, my text on summary dismissal, I noticed that in many cases, a critical factor was the accused employee’s conduct when confronted with the allegations. Employees who were contrite, honest and apologetic were more likely to be given a second chance than employees who lied, covered up their misdeeds and generally behaved dishonestly.

In the recent case of National Steel Car Limited v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, Local 7135, arbitrator Peter Chauvin considered a situation where the grievor had previously been discharged for threatening violence to a co-worker and dishonesty during the investigation. Craven reinstated the grievor, but without pay and subject to a very long disciplinary suspension.

Not long after he returned the work, the grievor engaged in further misconduct including unsafe use of equipment, insubordination and dishonesty. In assessing the appropriate discipline, Chauvin considered the following factors:

• the grievor's previous disciplinary record

• the seriousness of the culminating incident

• whether the grievor was open and honest with the employer at the time of the investigation

• whether the grievor fully acknowledged the misconduct and showed remorse and apologized for it

• the likelihood of recurrence

• whether it is likely the grievor can be a productive and trustworthy employee in the future

• whether earlier attempts at corrective action have been successful

• whether the grievor was forthright and truthful at the arbitration hearing.

It is notable these factors focus on the relationship between the parties and not the misconduct in question.

“In particular, the grievor should have been fully aware that should he be dishonest to the employer in the employer's investigation of an incident, this would be particularly grave misconduct, and subject him to discharge. This is so because arbitrator Craven specifically found in his award that the grievor was dishonest to the employer in its investigation, and ruled that this was a serious aggravating factor that compounded the grievor's misconduct in that case,” said Chauvin.

The grievor has clearly not in any way acknowledged this misconduct, and has not shown any remorse or offered any apology for it. Again, and quite to the contrary, the grievor denied that he engaged in any such misconduct to Mr. Hastings, and chose to not testify at the arbitration hearing. In doing so, he certainly did not acknowledge his misconduct, or show remorse for it, at the arbitration hearing...

“For all of these reasons, it is also unlikely that the grievor would be a productive and trustworthy employee of the employer in the future. Rather, the grievor has a repeated course of dishonesty. He was dishonest in the employer's investigation of his threat that was the subject of the Craven Award. He was dishonest to arbitrator Craven at that arbitration hearing. He was dishonest to Mr. Hastings. These all indicate that the relationship of trust that is essential between an employee and an employer has been irreparably damaged by the grievor, thus rendering his reinstatement untenable.”

This case is a good reminder that employers must avoid the temptation to react hastily to misconduct without taking the big picture into account. It is also confirmation that “just cause is not a lost cause,” as I like to say; judges and arbitrators will find summary dismissal is warranted in some cases.

Stuart Rudner is a partner in the Labour & Employment Law Group of Miller Thomson LLP, a national law firm. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is author of 
You’re Fired: Just Cause for Dismissal in Canada, published by Carswell. He can be reached at (905) 415-6767 or srudner@millerthomson.com. You can also follow him on Twitter @CanadianHRLaw and join his Canadian Employment Law Group on LinkedIn.

    
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