It’s not impossible to fire employees

Employers and employment lawyers often comment on how difficult it is to prove just cause. They bemoan the fact seemingly egregious behaviour is found not to be sufficient to warrant immediate dismissal. But recent cases show the concept of just cause continues to exist and will be applied where the court considers it to be appropriate

Stuart Rudner
Employers and employment lawyers often comment on how difficult it is to prove just cause. They bemoan the fact seemingly egregious behaviour is found not to be sufficient to warrant immediate dismissal. Particularly since the Supreme Court of Canada decision in McKinley and the widespread adoption of the “proportionality test” in assessing the appropriateness of dismissal, there is a common perception that it is virtually impossible to dismiss someone for cause. However, recent cases show the concept of just cause continues to exist in Canadian employment law and will be applied where the court considers it to be appropriate.

Human resources professionals, and anyone else involved in the discipline and dismissal process, should keep on top of the law as it evolves in this area. It is instructive to monitor court decisions where employers have alleged just cause in order to understand how the law is being applied, and what the threshold is. Since there are no hard and fast rules, the best we can do is compare a particular set of circumstances to previous court decisions. For that reason, I attempt to regularly review recent decisions of note in this area.

Below is another sampling of just cause decisions.

Refusing to follow directions

Two relatively high-level employees of the Toronto Humane Society were dismissed after they refused to carry out their duties as directed. They relied upon their belief the duties they were supposed to complete were illegal, and that the society’s code of business conduct stated that no one in the society “is ever expected to commit or condone any illegal or unethical act.”

The matter was discussed extensively over a period of several weeks and the society even quoted from five legal opinions that it had obtained, all of which agreed that it was acting lawfully. The society invited the employees to a meeting which it said was being held with “good intentions to resolve (their) concerns.”

The two plaintiffs confirmed they were not prepared to carry out their duties and they were handed letters of termination. They sued for wrongful dismissal.

The Ontario Superior Court of Justice dismissed the claim and found there was just cause to terminate the two employees based upon their “misconduct.”

The case was appealed to the Ontario Court Of Appeal, which confirmed just cause existed, although it clarified that the basis for such a finding was the employees’ repudiation of the employment contract, as opposed to misconduct.

It should also be noted that the courts confirmed the ability of an employer to allege just cause even if, at the time of termination, just cause was not relied upon. For more information see: Roden v. Toronto Human Society, 2005 CarswellOnt 4479 (Ont. C.A.).

Stealing company property and then threatening a supervisor

The plaintiff was dismissed for cause due to allegedly having stolen company property (two bolts) and for using threatening and vulgar language with a superior. The worker denied taking the bolts for his own use, and claimed he needed them to fix his work table. The trial judge did not find the worker’s version of events to be credible, particularly since he did not explain his actions in that way when initially confronted by a company representative.

The worker also claimed that the lead hand had instigated the confrontation between them, but this evidence was contradicted by the worker’s own application for employment insurance. Having accepted the company’s version of events, the court went on to find that the plaintiff’s behaviour, whilst deserving of sanction, did not warrant dismissal without notice. For more information see: Bravo v. Etobicoke Ironworks Ltd., 2005 CarswellOnt 5041 (Ont. S.C.J.).

Profanity-filled outburst directed at superior and colleagues

Santini had five years of service, was a valued member of the staff and generally well-regarded by both management and her peers. During the week of Oct. 18, 2004, the regional manager was out of the office and left a clerk in charge. The clerk apparently asked Santini for assistance with various tasks on Oct. 20 and Santini was not in a good mood by the time she left at the end of the day.

After leaving the office, she returned with her husband who was described as physically intimidating. She approached the clerk that been placed in charge, who was sitting with a male and female employee.

Santini launched into a tirade, primarily complaining about the absent regional manager. The tirade was profanity-filled and Santini pounded the desk while yelling.

At the same time, her husband apparently paced in a threatening manner and injected his own profanity-filled comments. The female employee that was present was so upset and frightened by the incident that she asked for an escort to the parking lot.

The regional manager returned to work the next day, but despite the opportunity to do so, Santini did not apologize or offer any explanation for her behaviour. When asked for a reason why her employment should not be terminated, her response was simply that she wanted to empty her own desk.

A claim for unjust dismissal was brought under the Canada Labour Code. The adjudicator found that termination would likely not have been appropriate if any of the following factors existed:

•the employee had offered a full and frank apology at the first opportunity after the incident;

•the employee understood and acknowledged the seriousness of the situation;

•the employee acknowledged that she had violated the rights of her fellow employees to a safe, quiet, peaceful workplace;

•the evidence of the employee was convincing that, if she were reinstated, a repeat of her behaviour was very unlikely;

•there was some medical explanation for the behaviour; or

•there was a post-incident enrolment in an anger management program.

The adjudicator found, however, that none of these factors existed and the dismissal was therefore warranted. For more information see: Santini v. Pacex International / C.J. Management Ltd., [2005] C.L.A.D. No. 238

Maybe you can lie and get away with it

In 2001 John Sampson was promoted to a managerial position after about four years as a pumping truck operator. Shortly thereafter, some concerns arose regarding his dealings with other employees. There were complaints that he was rude and difficult to work with. In October 2001 Sampson disciplined two employees who had not been doing their work.

One of these employees, MacKenzie, left work without telling Sampson, suggesting to a co-worker that Sampson would eventually realize he had left. The next day a member of senior management happened to be visiting and asked where MacKenzie was.

Apparently, Sampson lied and said he had taken a few days off. Over the next two days, Sampson went to MacKenzie’s house twice to figure out what was happening, but did not find him. In the meantime he again lied to a member of senior management about the situation. The company learned about the fact Mackenzie had quit only when his wife called to ask for documentation. Shortly thereafter Sampson was terminated for cause as a result of his dishonesty.

The court said MacKenzie had not specifically told Sampson he was quitting, and that apparently MacKenzie had taken time off in the past in order to deal with various problems and was sometimes hard to reach.

The court accepted that Sampson held off on telling senior management MacKenzie had quit because he believed that there may have been other reasons why he was not at work. While the court agreed Sampson was not completely forthright, it found his lack of candour was not egregious and did not amount to the kind of dishonesty warranting dismissal for cause.

As a result, he was awarded damages equivalent to six months’ salary plus bonus. For more information see: Sampson v. Melanson's Waste Management Inc., 2005 CarswellNB 37, 2005 NBQB 33 (N.B. Q.B.).

Diverting donations is okay… as long as they still go to charity

GAIL Arsenault was the parish secretary for 16 years. Part of her responsibilities was to take the envelopes containing weekly offerings from parishioners and process them, allocating money as indicated by the donor. In 2000 Arsenault apparently began diverting money to the St. Vincent De Paul Society despite the recipient indicated on the donation envelopes. Arsenault initially denied having altered the donation envelopes and was summarily dismissed.

A few days later Arsenault was admitted to hospital with a severe emotional disturbance and remained under medical care thereafter. Later, she admitted what she had done, but attempted to place the blame on the former parish priest, who she claimed had instructed her to divert funds to the St. Vincent De Paul Society.

The court found Arsenault had improperly diverted funds and agreed that her conduct was deceitful. However, citing McKinley, the court was not satisfied that the nature and degree of the dishonesty warranted dismissal. In particular, the court noted Arsenault did not profit from her actions, that she had a lengthy history of exemplary service and that her mental health issues appear to have pre-existed her dismissal and may have been a factor in her behaviour.

As a result she was awarded damages representing 40 weeks’ pay in lieu of notice. For more in formation see: Arseneault v. Roman Catholic Bishop of Saint John, 2004 CarswellNB 604, 281 N.B.R. (2d) 338, 736 A.P.R. 338, 37 C.C.E.L. (3d) 268, 2004 NBQB 427 (N.B. Q.B.).

Breaking the rules and lying about it, part one: Coming in late and falsifying time cards

Comitale repeatedly arrived late for his shifts and falsely completed his time records in order to conceal his tardiness. On Oct. 25, 2000, he was given a warning letter for doing so. On Jan. 11, 2001, he was given a second warning letter and a four-day suspension.

Comitale’s appeal of the suspension was rejected, and on Feb. 9, 2001, he was warned in writing that future instances of this type of activity would result in his termination. On Oct. 10, 2003, Comitale was again found to have arrived late and falsified his time card. He was placed on a paid suspension in order to allow the company to investigate.

The investigation revealed that from Sept. 30 to Oct. 10, 2003, he had arrived late and falsified his time card on eight of the nine workdays. In a subsequent meeting he was confronted with videotape evidence of his late arrival and asked what information he could produce in order to support his position he had not falsified his time card. Comitale said he would “rather not answer that question.” His allegation of unjust dismissal under the Canada Labour Code was dismissed. For more information see: Comitale v. Federal Express Canada Ltd., 2005] C.L.A.D. No. 159

Breaking the rules and lying about it, part two: Strip clubs and kickbacks

Over 32 years Paterson worked his way up the corporate ladder at DaimlerChrysler and its predecessor, ultimately reaching the second-highest seniority ranking in the company and being one of a small number of people reporting directly to the president. In 2001 Paterson went to the Airport Club, an adult entertainment club, with a group of people from DaimlerChrysler and two suppliers, Pentamark and API.

They were there for a lengthy period of time, spending time in a private room with a nude dancer and racking up a bill of more than $7,000, which was paid by API. API then billed this amount to Pentamark, which ultimately recovered it by padding its bills to DaimlerChrysler. Contrary to company policy, Paterson did not list his visits to the Airport Club in his log of entertainment expenses paid by a supplier.

In September 2001 the president of DaimlerChrysler expressed concerns regarding Pentamark’s billing practices and initiated an audit. The audit revealed, among other things, that Pentamark spent $35,000 at the Airport Club and then buried it in invoices submitted to DaimlerChrysler.

During the course of the investigation, members of the audit team met with Paterson, but he failed to mention his attendance at the Airport Club. Further investigation revealed a $50,000 loan from the owner of a Chrysler dealership to a close personal friend and direct subordinate of Paterson.

The loan was a clear breach of company rules. Upon being interviewed, and lying about the violations that had been discovered, Paterson was summarily dismissed. At trial the court found Paterson’s repeated dishonesty was a violation of trust, and summary dismissal was a proportionate response.

The court made particular note of the fact Paterson not only withheld information, but subsequently lied when asked direct questions. Paterson’s dishonest behaviour during the investigation process was an important factor in the court’s decision. Paterson v. DaimlerChrysler Canada Inc., 2005 CarswellOnt 4338 (Ont. S.C.J.).

There’s no use firing over stale potato chips

Donald Chester was a veteran sales representative working on commission. In 2000 he received several warnings from his supervisor regarding a failure to meet customer service standards. These warnings included a statement that failure to improve his performance would lead to further disciplinary action up to termination.

In 2002 a new supervisor developed concerns about Chester’s performance and accompanied him on his route on three occasions. Each time he found stale bags of chips on the store shelves, which was contrary to company policy. This led to three more disciplinary actions: a one-day suspension without pay, a five-day suspension without pay and a written warning of possible termination.

Later that year another supervisor purchased nine bags of stale chips at a store on Chester’s route. As a result, Chester was dismissed for cause, leading to his claim for wrongful dismissal. At trial the court found Pepsi’s evidence was that it had identified 39 stale bags of product between January and October 2002, during which time Chester would have handled just under 400,000 bags.

The court noted that no evidence had been provided as to whether other employees were performing at a higher level and found the standard imposed by Pepsi on Chester appeared to be unrealistic and likely unattainable. As a result Chester was awarded damages equivalent to 14 months’ pay in lieu of notice. For more information see: Chester v. Pepsi-Cola Canada Ltd., 2005 CarswellSask 130, 2005 SKQB 110 (Sask. Q.B.).

Stuart Rudner practices commercial litigation and employment law with Miller Thomson LLP's Toronto office. He can be reached at (416) 595-8672 or at [email protected].

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