Just cause and 'swipe and go' in spotlight with BCE dismissals

When BCE made headlines recently for terminating employees over alleged "swipe and go" attendance — workers who badged into the office only to leave shortly thereafter — it put a spotlight on a question many employers are quietly wrestling with: Can failing to comply with a return-to-office (RTO) policy constitute just cause for dismissal?

The short answer: “It’s complicated,” according to two employment lawyers speaking to Canadian HR Reporter.

"The standard for just cause for any form of misconduct is going to be extremely high — and it seems to be getting higher as more cases come out, especially cases that are referred to appellate courts," says J.P. Karam, partner at Willis Business Law in Windsor, Ont.

"I would caution an employer about assuming that a breach of a return-to-office policy automatically justifies dismissal or automatically meets that high threshold."

Coffee badging and ambiguity

The BCE case specifically involved allegations of employees swiping in at the office and then leaving — so-called "coffee badging." Does that constitute grounds for dismissal?

Only if the RTO policy addresses it clearly, according to Karam: "If you are going to terminate somebody because they fail to meet an expectation, and that expectation is ambiguous in your policy, then you're going to have an uphill battle in meeting the standard, plain and simple."

He notes the ambiguity runs deeper than it might appear, such as raising the issue of time theft.

"If you left in the middle of the day… say you have a 45-minute commute home — am I paying you for that commute or did you take a long lunch? Just so many questions arise that go back to… you have to have a clear policy,” says Karam, adding that if coffee badging is a behaviour an employer wants to prohibit, the office hours should be explicitly defined in the written policy.

Allegations of time theft

There’s been an increase in time theft cases, says Christine Ashton, partner at Wilson Vukelich in Toronto, where employers not only fire someone for cause because they weren't there when they were supposed to be, but they make “a pretty serious allegation” of time theft — that the employee essentially stole from them by claiming they were working when they weren't.

“The challenge though is that even if you can show that the employee wasn't in the office when head office thought they should be, that doesn't mean the employee was in the wrong. Because it does come down to ‘Did the employee actually understand that they were supposed to be there?’” she says.

“You can't assume that the employee knew what the expectations were — you have to make sure that they do. And you have to give the employee an opportunity to respond.”

It’s important to note that tracking data — such as swipe records and computer login times — don’t always tell the whole story, says Ashton.

"What if they swiped out, left their pass card in the car, came back in, someone else let them in, and they were there all day? What if their manager that day had decided to have a team meeting at a local restaurant?"

Managers: weak link in enforcement

Both lawyers point to inconsistent manager behaviour as one of the most significant threats to an employer's position.

Ashton says the BCE situation illustrated exactly this dynamic. Managers at some locations reportedly told employees not to worry about strict compliance, which muddied the employer's case significantly.

"You can have a situation where the manager or supervisor has essentially condoned that behaviour," she says.

“You might have a larger entity conveying that this is their expectation, but then individual managers and supervisors conveying that there's some flexibility or the expectation is actually something different entirely. And that goes to ‘What did the employee understand?’”

Her advice: in drafting RTO policies, give management teams an opportunity to provide feedback before the rollout, and be explicit about what managers are authorized to tell employees.

Managers that are going to make “on-the-fly decisions need to understand why those rules are in place, says Karam, because they will be asked those questions by employees, and if they don't understand the policy, they won't apply it consistently.

"If they don't agree with it and you don't know about their disagreement, then how the hell are you going to expect them to consistently apply it?" he says. "That's why you need to involve managers in the formulation of the policy."

Building a case: what just cause requires

For an employer to succeed on just cause over office attendance issues, Karam says the stronger cases involve "repeated and deliberate refusals to comply and repeated refusals after clear warnings have been issued by the employer or progressive discipline has been discharged."

But it goes further than warnings. The employer must also demonstrate that the policy itself was reasonable and consistently enforced — an element he says employers often underestimate.

"I have to dig a little bit deeper to see the policy and then start asking them those harder questions about whether the policy was appropriately prepared and then was it enforced consistently? And, oftentimes, that's where I get the blank stares."

Ashton echoes that the employer's obligations don't end with drafting a policy.

“Just cause dismissal is obviously going to be fairly difficult for an employer because they have to make it clear that it was clear to the employee that the conduct was not acceptable and about the potential consequences of them losing their job,” she says.

“They also have to make it clear that the alleged disciplinary-worthy conduct occurred.”

Responses recommended

Before terminating someone, she says, employers need to give the employee a genuine opportunity to respond to the specific allegations.

"It's important to actually say to the employee: ‘We've reviewed our records, we've determined that you weren't present on X, Y and Z days, and pursuant to our policy, you were expected to be there. What say you?’" says Ashton.

"‘And if you agree that you weren't there and didn't comply with our policy, do you wish to express any remorse?’"

That conversation can surface explanations an employer hadn't considered, she adds, such as accommodation needs that were never formally flagged.

“A lot of the time when the courts are hearing these issues, they focus pragmatically on ‘Did you guys talk through it like people should before jumping to any conclusions? Before making any accusations?’

“Because we're all supposed to be adults and we're all supposed to resolve HR issues that way.”

Willful misconduct vs. just cause

In Ontario, there are two thresholds to meet for cause — a statutory threshold under the Employment Standards Act and a common law threshold, says Karam.

To meet both, the employer needs to have offered the employee a genuine opportunity to correct the behaviour, he says, and to have issued clear, unambiguous progressive discipline with warnings before reaching termination.

The courts have made it very clear that there's a test for just cause and a test for willful misconduct under the Employment Standards Act, says Ashton.

“As the case law evolves, sometimes it can appear that the two are getting pretty close to having a very similar test,” she says.

"There are certainly always going to be instances where even if the employee didn't know what they were doing was wrong... it's definitely going to satisfy the just cause test."

But in talking about attendance, meeting just cause when it comes to attendance or time theft will often also satisfy willful misconduct, she says, “because part of what the courts are inevitably going to look at is ‘What did the employee know or understand about what was expected of them in returning to work?’”

When it comes to discipline, it’s not sufficient to just tell people there’s a new policy that they’re violating, according to Ashton.

“The warning would need to be specific to that individual — ‘We have reviewed this, you're not in compliance, turn things around or you'll be subject to further discipline.’ And depending on what's going on, it could be that the first warning is the final warning — ‘Do this again and you will be dismissed potentially for cause and for willful misconduct. ‘”

One strategy that Karam has recommended to clients is to assert cause while still paying out statutory entitlements.

"It automatically disarms a plaintiff from a very easy argument to make," he says. "It forces the plaintiff's lawyer to argue exclusively in the realm of common law, where I have more weapons at my disposal."

Constructive dismissal: the counter-argument

Despite rolling out a mandator RTO policy, some employees could take the position that working from home is a term of their employment, says Ashton.

“So, now you're heading to court: The position of the employer is they had just cause to dismiss, so the employee has no entitlements or possibly only their statutory minimums, and the employee's position is that they were constructively dismissed and are in fact entitled to their termination entitlements.”

Selective enforcement not a good idea

Both lawyers warn that inconsistency in the application of a policy is problematic; if, for example, employees see certain employees or managers being allowed to still work from home.

“Just be transparent with the rationale, says Karam. “The more transparent you are with the reasons behind this decision and communicating it appropriately, the better position you're going to be in… If there's an exception to the rule, explain why the exception exists and enforce the exception as consistently as you enforce the rule.”

Inconsistency in the enforcement of an RTO mandate can also create human rights exposure, particularly if certain groups — older employees, for example — appear to be disproportionately targeted.

"If there are 40 people being laid off and they just so happen to be the 40 oldest people in the workplace, one or all of them can introduce as evidence exactly that," says Karam, adding that the concept of seniority doesn’t exist in a non-union workplace.

He emphasizes that the legally defensible approach is to root termination decisions in operational need rather than personal characteristics. "Operational need sees no age, no race, no gender, no sexual orientation."

Just cause and accommodation

As an employer you want to be careful whenever you approach just cause dismissals, says Ashton.

"I always say, ‘Would you do this to your star employee?’ Because however you respond to misconduct from one employee, that response should be the same across the board for other employees."

The accommodation angle compounds the risk. An employee dismissed for attendance may later disclose — or may have already disclosed informally — a health condition that explained their absence, she says.

"It could be that it was expressed as 'I'm so glad I'm working from home because my hip has been a serious issue,' said in passing to their manager a year-and-a-half ago," says Ashton. "So, not only do you not have just cause, but [you] also now have a claim for discrimination."

Making the case for RTO

With more cases expected to reach the courts as RTO mandates continue to roll out, employers will likely need stronger rationales than expensive leases and a preference for in-person culture, says Karam.

The arguments that he considers strong include team collaboration, mentoring junior employees, quick decision-making in shared environments, access to resources and, particularly in regulated sectors, privacy and confidentiality concerns.

"I can tell you right now my [healthcare] clients are not thrilled with employees working from home where they have personal health information in their basement, and you've got somebody's kids over for a play date and you have somebody's medical records on your table,” he says.

A final recommendation: After a case is settled or resolved, look at that as a learning opportunity, says Karam.

“Oftentimes, I encourage an audit of policies and practices once the case is over — ‘Do we need to revisit these? Because they didn't really serve us well when we were trying to defend our position before the tribunal or labour arbitrator.’

“That's a really important opportunity to do some self-reflection and perhaps seek some advice on how to shore up these policies.”