Dismissing staff in ‘employee-friendly’ legal environment

Think you’ve got a slam-dunk case to dismiss an employee for just cause? Think again

Stuart Rudner
Can you dismiss someone for cause in today’s “employee-friendly” legal environment?

The simple answer, not surprisingly, is “yes.” But it is followed immediately by a number of qualifications because it’s not as easy as some employers think. In many cases what seems like more than “just cause” to an employer will not be seen the same way by a judge. And, as a recent case shows, sometimes employers may be precluded from using powerful evidence in support of the allegation.

Last fall Justice Pitt heard the case of Black v. Robinson Group Ltd. Mary Black was employed by Robinson as its accountant, responsible for payroll among other things. In 1995 she asked for a raise in salary and was refused. Subsequently she gave herself annual raises without having any authorization to do so. The judge found the employer knew of the raises to some degree, although the company’s evidence was to the contrary. Justice Pitt characterized Black’s actions as “indiscretions” rather than dishonesty and found the company had not shown just cause to terminate her employment.

The decision in Black has already been relied upon. In Graham v. Cuddy Food Products, a small claims court case, the plaintiff was employed as national account manager. He started that job in 1999. As part of his job he submitted expense reports and he acknowledged the company had to trust these reports were accurate.

Concerns were raised regarding his expenses and the company retained an investigator to conduct surveillance of him starting on March 19, 2001. He told the company he conducted sales calls to Gravenhurst and Barrie hospitals on March 20, 2001. But he later admitted at trial he was snowmobiling on that day with a client and a competitor’s salesman.

The investigator retained by the company confirmed he never attended at the hospitals. The company did not immediately confront the plaintiff. It was hoped he would not compound his dishonesty by misrepresenting his activities on his expense report.

When he did, his employment was terminated for cause. The employer relied upon Cosman v. Viacom Entertainment Canada Inc. in which just cause was found as a result of the falsification of expense reports. But the deputy judge found there was some “tension” between the sales department and the accounting department, and that although the plaintiff repeatedly lied to the defendant, “there was some aspect of protection of the defendant in the lie.” Therefore the defendant did not have just cause to terminate its dishonest account manager. In other words the plaintiff lied in order to somehow protect the company and therefore was not deserving of dismissal for cause.

Cases involving an allegation of just cause for dismissal almost invariably refer to McKinley v. BC Tel., which requires an analysis not only of the specific acts in question, but upon the entire context of the employment relationship. By way of extreme example, the plaintiff in Redfearn v. Elkford (District) was a clerk-administrator of the municipality. He was dismissed for cause after threatening to kill the mayor. However the Court of Appeal agreed with the trial judge, who found just cause did not exist because the plaintiff suffered from depression and a substance abuse problem. In looking at the facts as a whole, the court found just cause did not exist.

A recent decision of an adjudicator in a claim pursuant to the Canada Labour Code provides an example of how it may not be possible to show just cause even with what seems like ideal evidence. In Ross v. Rosedale Transport Ltd., Michael Ross allegedly suffered a back injury that prevented him from performing his duties. He was therefore assigned to light duties. His employer, suspicious of his injuries, arranged to have surveillance of Ross over the weekend when he had stated he would be moving.

The company caught the claimant, on video, lifting furniture onto a truck. He was ultimately fired but the adjudicator ruled the surveillance was unacceptably intrusive and therefore inadmissible. Without that evidence the employer was unable to support its allegation of just cause and was forced to pay the claimant 58 weeks’ salary plus costs.

I do not want to leave employers with the impression just cause cannot be proven. But organizations should speak with counsel before dismissing someone on that basis. Particularly where the cause relates to performance issues, it is important that proper steps, including warning the employee and providing sufficient opportunity to improve, are taken. There is little purpose served in rushing to dismiss on an employee for cause only to have to pay out substantial damages in the future.

For more information see:

Black v. Robinson Group Ltd., 2002 CarswellOnt 3463, (Ont. S.C.J.)

Cosman v. Viacom Entertainment Canada Inc., 2002 CarswellOnt 1569 (Ont. S.C.J.)

McKinley v. BC Tel, 1996 CarswellBC 1005, 20 C.C.E.L. (2d) 169 (B.C. S.C. [In Chambers])

Redfearn v. Elkford (District), 1995 CarswellBC 159, 9 C.C.E.L. (2d) 52 (B.C. S.C.)

Ross v. Rosedale Transport Ltd., 2003 CarswellNat 3620 (Can. Arb. Bd.)

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

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