Rules around conflict of interest should be consistently enforced to truly protect employer
By Jeffrey R. Smith
Conflict of interest can be a pressing concern for employers as it can be harmful to a business, both legally and financially. Employers want to be able to trust employees, but if employees are involved with something that works at cross-purposes to the employer’s goals, it can create messy situations.
As such, many employers have policies that prevent situations that could lead to conflicts of interest and require employees to report potential conflicts before moving forward.
Having clear policies dealing with conflicts of interest — among other workplace situations and misconduct — can go a long way to help employees identify and avoid such circumstances, and fpremployers tp take appropriate disciplinary action against employees who partake.
But while good policies are important, employers must apply them consistently. If employees are allowed to get into situations that could involve conflicts of interest with no consequences, it will be hard to prevent such circumstances later on.
People in the trades often perform side jobs for friends and family that are separate from their regular employment. As a result, it shouldn’t be surprising for businesses like plumbing and heating companies to learn employees are doing some work outside of their employment. And it shouldn’t be a problem, as long as it’s not interfering in their business.
However, if the practice has been condoned — even if it veers dangerously close to conflict-of-interest territory — it might be difficult to bring to an immediate halt.
A British Columbia plumbing and heating company learned that one of its plumbers was doing independent work for a former client in exchange for cash while the plumber was on vacation from the company. The company was a little concerned the plumber was working on his vacation, but since it wasn’t involved in the project, it said nothing — despite the fact the company had a conflict-of-interest policy prohibiting employees from doing work for anyone who did business with the company or using company vehicles and equipment for non-company work. Several months later, the plumber did some more work for the same individual, but didn’t mention it to the company.
Nearly two years later, the company was trying to get two clients to settle up their accounts. However, one of the clients said he didn’t owe anything because he had paid the plumber, and the other had also had the plumber do some work for him. It also turned out the plumber had used the company’s name in obtaining permits for the work.
Management proceeded to fire the worker for violating the conflict-of-interest policy. The problem was, they had never told the worker not to do these side jobs, even though they had known for years he was doing them. Not only was this contrary to the principles of progressive discipline, they essentially condoned what the worker was doing.
At some point, the worker knew the company was aware of his activities and, since they didn’t address it, he naturally assumed it was fine and he wasn’t breaching company policy when he continued to take side jobs.
In addition, though the worker had binders containing company policies in his office, they hadn’t been officially given to him or discussed when he was hired. A key element of good workplace policies is making sure employees are aware of them and the consequences of breaching them. This wasn’t done here: see Booton v. Synergy Plumbing and Heating, 2019 BCSC 276 (B.C. S.C.).
Companies have a vested interest in ensuring employees don’t find themselves in situations where there can be a conflict of interest, so clear policies prohibiting such situations — along with clear procedures on how employees can extract themselves from them — are important to protecting employers’ businesses. But, like all workplace policies, they’re not worth the paper they’re printed on — or screens they digitally appear on — if employers don’t communicate them effectively and enforce them consistently. Employers who fail to do so may find themselves in conflict with their own interest.