Conviction for off-duty behaviour

Employee's off-duty behaviour raises trust issues at work

Question: An employee has gotten into some legal trouble outside of work. His sentence didn't affect his ability to report to work, but it has called into question his honesty and trustworthiness. His position involves a lot of responsibility and exposure to sensitive information and if we can't be sure we can trust him, it will cause significant problems for the company. Can his off-duty actions be considered breach of trust and cause for dismissal?

Answer: In these circumstances, criminal activity in and of itself doesn’t form the basis for just cause. Many provinces have human rights legislation which specifically states an employee cannot be terminated for criminal acts wholly unrelated to her work. Dismissal is justified primarily if the activity reveals the employee’s character is not compatible with her duties. As Justice Roland Ritchie of the Supreme Court of Canada noted in Lake Ontario Portland Cement Co. v. Groner, “it is not so much the misconduct itself as the fact that he was capable of it which justifies the (employee’s) dismissal.”

This test, as recently applied by the British Columbia Court of Appeal in Clendenning v. Lowndes Lambert (B.C.) Ltd. is two-fold. First, the employer has to actually believe the employee’s character is such that it can no longer employ him. Second, a reasonable person must be able to conclude the character flaws raised warrant dismissal without notice.

The degree of dishonesty is also of importance. In McKinley v. BC Tel, Supreme Court of Canada Justice Frank Iacobucci set out the test for dishonesty amounting to just cause:

“The test is whether the employee's dishonesty gave rise to a breakdown in the employment relationship. This test can be expressed in different ways. One could say, for example, that just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee's obligations to his or her employer.”

Dismissal will be more readily justified if the criminal charge results in a conviction. This is likely because a reasonable person would be less reluctant to base a termination on a matter that results in a conviction, rather than what may prove to be baseless charges. However, this is not always the case — a conviction for a crime unrelated to dishonesty (such as marijuana possession) will likely not be enough for just cause, while a fraudulent act that does not result in a conviction could found to be reason for dismissal. This area of the law is rather murky, and cause for dismissal will depend on the level of responsibility of the employee, how related the act was to her duties and whether the criminal conduct caused prejudice to the employer.

That being said, a conviction for theft will frequently justify dismissal. In Thibodeau c. J.D. Irving Ltd., the employee was convicted of shoplifting while he was on vacation. The employee held the position of head chef with the accompanying supervisory duties. The New Brunswick Court of the Queen’s Bench found there was just cause for the dismissal, saying “when theft is involved, it matters little that the crime was committed during or outside work hours or whether or not the thing stolen was the employer's property.”

Conviction for other types of offences, such as impaired driving, only constitute just cause if the offence is related to the employee’s duties. In Reininger v. Unique Personnel Canada Inc., the Ontario Superior Court of Justice looked at disciplinary measures in the context of an truck driver facing charges for impaired driving. The court found the relevant issue was not whether the employee was guilty, but whether his continued employment presented a “serious and immediate risk to the legitimate interests of the employer.”

Prejudice to the employer can result from a loss of its reputation and goodwill in the community, and this prejudice may be sufficient for just cause. In Kelly v. Linamar Corp., a manager was charged and convicted of possession of child pornography. There was extensive press coverage of the arrest and the employer alleged this reporting had a negative effect on it. The employee interacted with suppliers and customers, as well as instructing those who were working under him, and the court found committing a crime of this “moral turpitude” would adversely affect these activities. Moreover, the company had built up a good reputation in the community and was known for promoting activities for young people. The employer was entitled to terminate the manager as a means of protecting its reputation.

However, an employer must be careful not to be too hasty to dismiss an employee on this basis. In Backman v. Hyundai Auto Canada Inc., a district sales manager was charged with drug trafficking and was summarily dismissed on this basis. He was later acquitted of all charges. The court found the employer had at all times believed the employee to be innocent of the charges and he was dismissed to avoid bad publicity. There was no evidence the charges and the associated publicity had affected the defendant’s business, so the court found the dismissal could not be justified.

Essentially, if an employee has been convicted of a criminal offence committed while off-duty, the employer will have just cause for dismissal if:

• the crime is of a dishonest nature, such that the employer can no longer place its trust in the employee; or

• the continued employment of the convicted employee would result in prejudice to the employer, through a loss of reputation or goodwill.

The more responsibility the employee has, the more likely termination will be justified. In your case, the employee is in a position with a lot of responsibility, with access to sensitive information. If the crime involved dishonest behaviour, termination will most likely be justified. However, if the crime was of a different nature, just cause will only be found if it has caused damage to your company’s reputation.

For more information see:

Lake Ontario Portland Cement Co. v. Groner, 1961 CarswellOnt 70 (S.C.C.).

Clendenning v. Lowndes Lambert (B.C.) Ltd., 2000 CarswellBC 2361 (B.C.C.A.).

McKinley v. BC Tel, 2001 CarswellBC 1335, 2001 CarswellBC 1336 (S.C.C.).

Thibodeau c. J.D. Irving Ltd., 1999 CarswellNB 236 (N.B. Q.B.).

Reininger v. Unique Personnel Canada Inc., 2002 CarswellOnt 2355 (S.C.J.).

Kelly v. Linamar Corp., 2005 CarswellOnt 6611 (S.C.J.).

Backman v. Hyundai Auto Canada Inc., 1990 CarswellNS 145 (N.S. T.D.).

Brian Kenny is a partner with MacPherson Leslie and Tyerman LLP in Regina. He can be reached at (306) 347-8421 or [email protected].

To read the full story, login below.

Not a subscriber?

Start your subscription today!