Lawsuit against current employer justifies dismissal

Telus employee poisoned employment relationship by challenging in court employer’s deductions for overpayment

When Huntley Zia disagreed with his employer’s actions in recovering money he had been overpaid, he took it to court. Zia’s lawsuit sent shockwaves around the British Columbia offices of Telus Communications, where suing his employer while he was still employed was regarded as more than inappropriate — it was the last straw.

As part of a team of Telus employees sent to Thailand to implement a large telecommunications project, Zia objected to his level of pay, indicating he would leave the company if his request for additional salary wasn’t met. Telus approved a “foreign allowance” increment for him while he was away.

Presumably satisfied with the additional pay, Zia didn’t say anything when he continued to receive it following his return from Thailand until Telus detected the error. After four years, the overpayment totalled almost $100,000.

After an investigation, Telus concluded the foreign allowance payments were never meant to continue past Zia’s work in Thailand. Telus proposed in writing to recover the money by making deductions from his pay over a period of time. Zia remained defiant, arguing the payments were permanent, refusing to respond to proposed repayment options and incorrectly assuming any deductions from his pay would be illegal.

Fed up with Zia’s unco-operative manner, Telus began making unilateral deductions from his pay. He responded by filing a court claim seeking a determination of whether could do so, all while continuing to work at Telus.

Zia’s lawsuit while he was still employed was the last straw for Telus and the company fired him for cause when he would not drop the suit. At trial, Zia sought to justify his silence when the payments continued after he returned from Thailand by claiming the allowance was always intended to become part of his permanent compensation package. The court disagreed, finding Zia knew from the outset the payments represented a temporary allowance, similar to money he received for an earlier overseas project.

In considering whether Telus had cause to dismiss him, the court concluded Zia knew the overpayments an error and by suing his employer while still working for it, he not only perpetuated the mistake but poisoned the relationship. Zia’s claim was dismissed and he was ordered to pay Telus the remainder of the overpayment.

Whether an employee’s misconduct is severe enough to warrant cause for dismissal is assessed by considering whether a lesser form of discipline would have been more appropriate. However, whether the punishment fits the crime in employment law is sometimes more of a function of the judge than the specific facts of any given case. In order to bulletproof exposure to employment lawsuits, employers ought to consider the following lessons taken from this case:

Lawsuits by employees who are still working may not always provide cause for dismissal. Courts will consider whether the employee was sincerely interested in resolving a legitimate dispute or whether she was simply trying to obtain compensation while getting out of a bad situation. Employees who have clearly demonstrated an intention to no longer be bound by their employment contracts are less likely to find judicial favour on their side.

Conduct a thorough investigation by a non-party to the dispute. Employees are required to respond truthfully to questions asked during an investigation and those that don’t come away with clean hands risk being disbelieved at trial. However, not only will a properly conducted investigation solidify a decision to impose discipline, the employer may uncover other skeletons in the employee’s closet, justifying discipline that it hadn’t even been seeking.

Don’t rush to judgment. By providing Zia with various repayment options and an opportunity to withdraw his lawsuit, Telus’ actions were considered more reasonable at trial.

Assess legislation with counsel. Although the court found Telus was entitled to unilaterally recover the overpayment by the Canada Labour Code, various jurisdictional issues and statutory exceptions can exist that could turn an otherwise simple dispute into a recipe for disaster.

For more information see:

Zia v. Telus Communications Inc., 2007 CarswellBC 2302 (B.C. S.C.).

Daniel A. Lublin is a Toronto employment lawyer specializing in the law of discipline and wrongful dismissal. He can be reached at dan@toronto-employmentlawyer.com or www.toronto-employmentlawyer.com.

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