Discipline for misconduct while socializing with clients

The extent of off-duty misconduct and potential harm to the employer

Colin Gibson

Question: Can an employer discipline an employee for off-duty behaviour that occurred while socializing with a client after their business was completed?

Answer: The employment and arbitral case law establishes a separation between an employee’s working and personal lives. An employer can only discipline an employee for off-duty behaviour that affects the employer’s legitimate business interests. Depending on the circumstances, conduct that occurs while socializing with a client could fall within that category.

The law on off-duty misconduct developed in the unionized context, and has been adopted by the courts in dealing with non-unionized employees. The general rule is that an employer must establish a connection between the employee’s off-duty conduct and his employment in order to justify discipline. According to a leading case, Re Millhaven Fibres Ltd. & Oil, Chemical and Atomic Workers I.U. Loc. 9-670, the conduct must either damage the employer’s reputation, affect the employee’s ability to perform her duties, cause other employees to refuse to work with her, or inhibit the employer’s ability to manage and direct its business. An employer may discipline an employee if any one of these factors is satisfied.

In the context of the question, the most relevant Millhaven factor is damage to the employer’s reputation. Even if business with the client has been completed, an employee’s behaviour may harm the employer’s reputation, expose it to potential liability, and/or influence the client’s choice to do business with the employer or recommend the employer to friends or colleagues.

In a legal proceeding, an employer bears the onus of proving that the employee’s conduct was sufficiently injurious to its business or reputation to justify dismissal or disciplinary action. However, the employer does not need to prove that actual damage to reputation occurred. Instead, the question is whether a “fair-minded and well-informed” person would think the conduct would damage the employer’s reputation. Further, in Langley, the arbitrator ruled that a degree of deference should be given to the employer’s assessment of the risk to its own reputation. To warrant discipline or discharge, however, a clear causal connection between the off-duty behaviour and the employer’s reputation or business interests must be proven.

The employee’s behaviour must also be assessed in relation to her specific position and the nature of the employer’s business as a whole. Senior employees, or those who occupy a position of trust, may have a greater duty to uphold the reputation of the employer. For example, in Northwest Territories, a “higher standard of off-duty conduct” was applied to a Juridical Officer in light of the employer’s “legitimate interest in protecting the reputation of the court system.” The nature of business carried out by a public sector employer may also attract a higher standard of conduct. This was the case in the Langley decision noted above, where the arbitrator considered the municipal employer’s interest in “the protection, promotion and advancement of the interests and public welfare of its citizenry” as justification for discipline.

Off-duty misconduct while socializing with a client could take a number of forms. The behaviour may have been witnessed by the client, directed at the client, or the client may have participated in that behaviour themselves. The behaviour itself could vary, ranging from such things as excessive drinking, harassment, or a verbal or even physical altercation with a person in attendance. All the circumstances would need to be considered in determining whether discipline is warranted.

For more information see:

• Re Millhaven Fibres Ltd. & Oil, Chemical and Atomic Workers I.U. Loc. 9-670, [1967] O.L.A.A. No 4 (Ont. Arb.).

• Langley, (1995) 46 L.A.C. (4th) 30 (Greyell).

• Northwest Territories, (1999) 83 L.A.C. (4th) 43 (Chertkow).

Colin Gibson is a partner with Harris and Company in Vancouver. He can be reached at (604) 891-2212 or [email protected]

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