Threshold for dismissal after employee theft

Dismissal not always automatic

Tim Mitchell

Question: If an employee is found to have committed theft of the employer’s property, is there a standard as to the value of the stolen property or number of incidences that meet the threshold for dismissal without other discipline?

Answer: Theft is one of the most aggravating forms of misconduct an employee can engage in. Theft implies deliberate intention to wrongfully take something that belongs to another. It is often referred to as a cardinal sin which goes straight to the foundation of trust necessary to maintain an employer-employee relationship. Historically, theft was viewed by arbitrators and courts as a repudiation of the employment contract and establishing theft could justify immediate termination of employment for cause.

Today, however, arbitrators and courts use a contextual approach to determine whether just cause for dismissal exists when employee theft is discovered. Similar to the analysis required when discipline is being considered for other types of misconduct, each employee theft case must be assessed on its own merits; and the nature and circumstances of the employee’s conduct must be weighed against possible sanctions: see McKinley v. BC Tel. Discipline must always be proportional to the employee’s conduct. Consequently, theft is no longer an automatic ground to terminate the employment relationship.

We generally recommend that in cases of alleged theft, employers conduct a thorough investigation into the employee’s conduct. Of note, employers seeking to discipline an employee for theft must prove on clear and compelling evidence, that: (i) the person misappropriated property or money not belonging to them; and (ii) that the employee did so with intent: see Brown & Beatty, `Canadian Labour Arbitration.``

In one 2017 Alberta arbitration — Sobeys Capital Inc. and UFCW — for example, the employer failed to prove a grievor had the intent to commit theft when the grievor’s explanation for their conduct was more probable than that presented by the employer.

There are ultimately multiple factors that employers should take into account when determining the appropriate discipline in situations involving employee theft:

• The nature and seriousness of the theft (including the value of the goods involved)

• Whether there was a single act of theft or a pattern of theft-related or other dishonest conduct

• Whether there was any confusion on the part of the employee personally or resulting from the employer’s rules or policies, or from the employer’s enforcement of same

• Whether theft is a problem in the workplace and the employer’s response to other instances of theft in the workplace

• Whether the theft was premeditated or the result of a confusion or an impulsive momentary lapse of judgement

• The employee’s reaction when confronted with the allegation of theft including truthfully acknowledging the wrongfulness of his or her conduct

• Whether the employee co-operated in the investigation including identifying any accomplice

• The employee’s length of service and disciplinary record with the employer.

As a best practice, employers should reserve termination for cause for serious misconduct (i.e., the value of goods was high or the theft was of a continuing nature over a period of time or employee did not take accountability for his or her wrongdoing), or where an employee has been disciplined previously and has been shown unlikely to change their behavior.

For more information see:

• McKinley v. BC Tel, 2001 SCC 38 (S.C.C.).

• Sobeys Capital Inc. and UFCW, Local 401 (B.(A.)), Re (2017), 279 L.A.C. (4th) 1 (Alta. Arb.).


Tim Mitchell practices management-side labour and employment law with McLennan Ross LLP in Calgary. He can be reached at (403) 303-1791 or tmitchell@mross.com.

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