Enforcing the duty of loyalty

Asking employees if they're 'on board'

Colin Gibson

Question: Can a company legally ask all employees, including union representatives, to sign a statement confirming their commitment to being “on board” with the company’s objectives? If any employee refuses, can this be a factor in dismissal?

Answer: All employees, whether unionized or not, owe a duty of fidelity and loyalty to their employer. This duty has been found to be an essential term that will be implied into every contract of employment.

The duty of fidelity requires employees to serve their employer honestly and faithfully during their employment. Employees must act in the best interests of their employer at all times or conceal facts which ought to be revealed. They must not compete with their employer.

Because all employees owe a company a duty of fidelity, it is not necessary to have employees sign a statement confirming that they are “on board” with business objectives. Indeed, asking employees to sign off on such an agreement may actually send the message that employees can choose not to be on side with the company’s objectives. This could have the effect of undermining the company’s authority and causing confusion among the employees regarding their duty of fidelity.

As an alternative, you may wish to provide your employees with a written outline of your company’s business objectives, along with a statement to the effect that employees are expected to act in the best interests of the company by conducting themselves in a manner consistent with those objectives. This could be included in a policy manual, or it could be in a stand-alone rule or policy.

Employees who do not conduct themselves in a manner consistent with the duty of fidelity may be disciplined or even dismissed, depending on the circumstances.

For example, an employer may have grounds to discharge an employee for cause if the employee fails to follow a company rule or policy. In order to establish just cause, the employer must show the rule or policy was clear, reasonable, consistently applied, brought to the attention of the affected employee and the employee understood that failure to comply with the rule or policy would place her employment in jeopardy.

A rule or policy that is consistent with the employees’ duty of fidelity will usually be found to be reasonable, provided it is not used to control an employee’s off duty conduct in a manner not necessary to protect the employer’s interests. In implementing the rule or policy, the employer should ensure the rule is clearly communicated to all employees, consistently applied and that all employees understand their failure to comply would jeopardize their employment.

In addition, employees may provide their employer with just cause for dismissal if they refuse to follow a reasonable and lawful order within the scope of their job duties, provided the employee’s disobedience was willful and showed a flagrant disregard for the essential conditions of her employment. A rule that employees conduct themselves in a manner consistent with the employer’s objectives is consistent with the duty of fidelity and will be considered reasonable and lawful.

Employers with unionized workers should always review the terms of their collective agreements to ensure their rule or policy is not inconsistent with any provision of the collective agreement. Generally speaking, a rule requiring employees to observe their duty of fidelity should not be inconsistent with the terms and conditions found in most collective agreements.

It should be noted that in unionized workplaces, while shop stewards and other union officials owe a duty of loyalty and fidelity to their employer, they also have a representative role to the union and its members. As long as they are acting within their representative role, shop stewards will have considerably greater freedom with respect to their conduct, particularly conduct which can be critical of the employer. However, shop stewards are not immune to discipline for insubordination. They are subject to discipline for statements that are malicious, deliberately reckless or false, threatening or intimidating or which publicly attack their employer or a member of management.

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

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