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Terminating an employee for cause

Alberta case a cautionary tale for employers that dismissing an employee for cause can be very costly if they haven’t conducted a proper investigation
employment law
The case of Beaudoin v. Agriculture Financial Services Corporation, is a cautionary tale for employers that dismissing an employee for cause can be very costly if they haven’t conducted a proper investigation before termination. Google Street View

By Stuart Rudner and Anique Dublin

The case of Beaudoin v. Agriculture Financial Services Corporation, is a cautionary tale for employers that dismissing an employee for cause can be very costly if they haven’t conducted a proper investigation before termination.

This case involves the wrongful dismissal of an employee who was alleged to have been insubordinate and willfully disobedient. Ultimately, the Alberta Court held that the employer did not meet the burden of proving it had just cause to dismiss the employee.

The court concluded that had the employer given the employee an opportunity to respond to the allegations of misconduct, it would have been able to assess that she did not deliberately and intentionally disobey her supervisor.  

Stuart has said it in his text on just cause for dismissal, and repeatedly over the years, that when an employer suspects misconduct, they must not act hastily. Rather, an investigation should take place which will include confronting the employee and providing them with an opportunity to respond to the allegations and explain their actions. In many cases, the employee’s response will be the determining factor in assessing whether or not the employment relationship has been irreparably harmed.

Background

Sandra Beaudoin was employed by Agriculture Financial Services Corporation (AFSC), for 15 years, first as an administrative support worker and later as a lender.

In June 2015, Beaudoin was asked by a client to provide a written opinion regarding the value of land belonging to a company owned by the client’s daughter and son-in-law, who were going through a divorce. Beaudoin asked her supervisor whether she could provide the information and her supervisor advised her that they were not allowed to share their opinions on land values with outside parties, as this could have serious implications for AFSC. Beaudoin, therefore, advised the client that she could not provide her with written documentation regarding AFSC’s opinions of land values.

In August 2015, Beaudoin noted on file that she provided the same client with copies of asset values, for loans previously approved, to give the client an idea of land values to support the client’s daughter in her divorce. The information she provided was only with respect to the client’s own land.    

In November 2015, Beaudoin’s supervisor was reviewing her files when he discovered the note. As a result, he sent her an email inquiring about the note and asking her to provide documents. Beaudoin replied to the email and provided her supervisor with the requested documents. The email from her supervisor made no mention that her employment might be in jeopardy.  

On November 30, 2015, her supervisor provided her with a letter terminating her employment for cause. The termination letter alleged that Beaudoin had violated AFSC’s Code of Conduct and Lending Policy Manual by providing the appraisal to the client. The termination letter also alleged that her behaviour amounted to wilful disobedience and insubordination and that AFSC had lost all trust in her.

Beaudoin brought an action against AFSC for wrongful dismissal.

Decision

The court held that Beaudoin’s employment was wrongfully terminated.

At trial, AFSC argued that Beaudoin must have known that she was in breach of the code because of the communication between her and her supervisor in June 2015 addressing the release of appraisal information.

Beaudoin explained that she did not intend to disobey her supervisor or breach the code but her understanding was that the land assessment information she gave the client was not subject to the code because it was not up-to-date or a formal opinion as to value.

AFSC never challenged Beaudoin’s evidence on her belief that she did nothing wrong. The court concluded that had AFSC provided Beaudoin with an opportunity to respond to the allegations of misconduct, she would have provided them with the same explanation. The court held that “as a matter of good human resources practice as well as AFSC’s own Code of Conduct, the employer should have performed an appropriate investigation before dismissing her for cause.”

The court also found that Beaudoin was not insubordinate as her actions were not deliberate and intentional. The court concluded that Beaudoin was transparent about what she did and the note, which was there for all to see, suggested that she clearly misunderstood what she was allowed to do.

The court reiterated that had AFSC conducted a proper investigation, giving Beaudoin an opportunity to explain, it would have realized that she did not know she was doing anything wrong. The court noted that this would have been an excellent opportunity for AFSC to have a candid discussion with Beaudoin about her duties and the importance of appraisals and why they should not be disclosed.

The court also noted that AFSC made the common error of acting too hastily. It reached conclusions without completing an investigation and without giving Beaudoin an opportunity to explain her actions.    

Beaudoin’s damages were assessed at 14 months.  

Takeaway

This case reinforces the importance of:

  • thorough workplace policies with clearly defined terms
  • ensuring that all employees are aware and properly trained on workplace policies
  • a properly conducted workplace investigation.

The case also confirms that in many cases, the employer’s response to an allegation of misconduct can make the difference between a finding of just cause and a conclusion that the employee deserved another chance.

Anique Dublin is a law clerk and billing clerk at Rudner Law in Toronto.

© Copyright Canadian HR Reporter, HAB Press. All rights reserved.

Stuart Rudner

Stuart Rudner, Employment Lawyer and MediatorStuart Rudner is the founder of Rudner Law (RudnerLaw.ca), a firm specializing in Employment Law and Mediation. He can be reached at stuart@rudnerlaw.ca, (416) 864-8500 or (905) 209-6999, and you can follow on Twitter @RudnerLaw.
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