Court cites procedural fairness in CN’s ‘extreme’ just cause firing of 34-year employee
A recent decision by the Court of King’s Bench of Manitoba serves to highlight the importance of practicing procedural fairness when terminating employees — even if there seems to be clear and just cause.
The worker in this case was 61 years old at the time of his termination and had been an employee of CN for 34 years, during which time he had worked his way up to a management position.
Up until the incidents leading up to his termination, the employee had an “unblemished record”, having never been disciplined or charged with misconduct throughout the entire length of his employment. Still, he was terminated without notice and with just cause.
CN alleged this was due to his mishandling of sexual harassment claims and conflicts that occurred among employees on his team.
The employee sued CN for wrongful dismissal, and the court awarded him just over $200,000 in lieu of the pay he would have received over the 24 months’ notice period he was entitled to, plus the prescribed statutory interest rate.
Risky: Neglecting procedural fairness in just cause dismissals
Upper management had informed Slav Kozar there had been a sexual harassment claim made by one of his team members against another employee, both under his supervision. He was told that he did not need to take any action and that “it was now up to the human resources department at CN to resolve the issue,” the court said.
Unsatisfied, Kozar “on his own initiative … called the complainant into his office to discuss what the nature of her complaint was and before she left his office, he had the male co-worker briefly join them.”
This set off a series of events which led to complaints being filed against Kozar, an investigation, and his just cause termination without notice.
“Just cause is very difficult to establish, especially if it's a single incident and a person has an otherwise clean record of employment,” says Jensen Leung, employment lawyer at KSW Lawyers in Vancouver.
“Essentially, what CN could have done differently in this case is probably just not terminating the person, and instead disciplining them and issuing them a warning, for example.”
CN based just cause termination on hearsay statements
When a charge of wrongful dismissal is brought against an employer, the onus is on them to establish proof of cause of dismissal. In this case, CN failed to do so, the court found.
There were no witness testimonies from any other employees who were involved in the sexual harassment allegations, and even the individual who issued the termination letter stated to the court that they themselves did not agree with the action.
“Even though there's not a legal duty per se, it is extremely risky for an employer to not at least try to be fair and balanced in any sort of workplace investigation,” says Leung.”
“Having an unfair workplace investigation can not only lead to weakening a company's case of just cause, like in this case, but it can also lead to potentially aggravated or punitive damages … if a workplace investigation pre-determines the outcome and railroads someone, that can lead to increased liability for the employer.”
Based on the hearsay statements of the complainant and the defendants, and an independent investigator’s report, CN maintained throughout the proceeding that it was justified in terminating the employee without notice “due to credible allegations that he failed to meet the standard set for management employees at CN,” according to the court’s decision.
According to its own policy, CN management engaged a third party to investigate the allegations against Kozar. The investigators submitted a report that said, “five of the allegations were partially substantiated, five were substantiated and one was unsubstantiated,” the court said. However the report did not recommend terminating Kozar’s employment.
“CN took the most extreme option open to it (termination without notice) without being able to explain why this was proportional to the severity of the alleged misconduct. The reports themselves do not recommend a sanction for what the [worker] apparently did,” the court stated.
Procedural fairness means pausing, taking steps before termination
Since there is no legal duty of procedural fairness, but it’s a risk nonetheless to those who fail to consider fairness when terminating with cause, how can employers know what is best practice?
“I would describe it as being a good human and treating employees as people,” Leung says.
“It's sensible and advisable for employers to be as fair and reasonable as possible when conducting any investigation. Because if they are approaching an investigation with a predetermined outcome in mind, then that's going to lead them to be exposed to more damages.”
That means giving the subject of a complaint the opportunity to respond to allegations against them, and determining whether there had been an irreparable breach to the employment relationship or if the employee is redeemable, he says.
There should also be a clear procedure of disciplinary steps before terminating.
“Before a company fires someone, they should hit pause and seek appropriate advice,” says Leung. “Most of the time when loss has happened, it’s because someone wasn't talked to… If there is a biased or shoddy investigation, then not only can that mean that the employee could be entitled to severance, they could also be entitled to additional damages for failing to investigate in good faith.”
