Canada: A "Well-Intentioned" Breach Of Employment Policy Is Not Just Cause For Termination


The recent decision of Barton v. Rona Ontario Inc. (Rona, 2012 ONSC 3809 (S.C.J.) [Rona]) re-affirms the approach to be taken by Ontario Courts in assessing claims for wrongful termination.

In this interesting case, a forklift was used by Rona staff to lift a wheelchair bound employee to the store's second level. Kerry Barton, the store manager and plaintiff, argued that the lift, while technically against Rona's safety rules, was with the best of intentions and merely a misguided attempt to accommodate the employee and allow him to participate in a training program being held on the second floor. Rona disagreed, terminating Barton for breaching his employment contract and the company's health and safety policies. Barton sued Rona for wrongful dismissal. Rona defended, arguing there was just cause for the termination.

After analysing all of the facts, Justice Lauwers of the Superior Court of Justice held that, although Barton had clearly breached his employment contract and the health and safety policies of his employer, the misconduct did not justify his dismissal. As a result, Barton was awarded damages equivalent to 10 months' notice.

The Facts

Barton had been employed as an assistant store manager at Rona's Barrie, Ontario location. In that position, he was responsible for managing about 140 employees, including Kai Malmstrom, who used a wheelchair (Rona, para. 3).

The Barrie store had scheduled a training program for April 17, 2009. Malmstrom wanted to attend the training and management wanted to accommodate him. The problem was that the store's training centre was on the second fl oor and was not wheelchair accessible (Rona, para. 4). To accommodate Malmstrom, Barton had spoken to Malmstrom a few days before the training was scheduled to occur, and undertaken to have Malmstrom trained on the main level at a later date (Rona, para. 4).

However, on the day of the training, Malmstrom and a colleague decided to strap Malmstrom and his wheelchair to a skid and use a large forklift to lift him to the second floor, thereby accommodating Malmstrom and allowing him to attend the training program as scheduled. Malmstrom was later lowered back to the main level in the same manner (the Incident) (Rona, para. 5).

While Barton did not personally participate in the Incident and did not give permission for the lift or descent (Rona, para. 26), Malmstrom had approached Barton about using the lift to attend the training earlier that day. Barton "tried to convey his discomfort" with the idea and reminded Malmstrom about the plan to train him later. However, Barton did not expressly forbid the lift scheme (Rona, para. 31).

Upon learning of the Incident, Rona's human resources department conducted an investigation. Following the investigation, Rona terminated Barton and the employee who had operated the lift (Rona, para. 3-7). Malmstrom was not disciplined for his participation in the breach of employer policies

Positions of the Parties

At trial, Barton admitted that he was familiar with Rona's safety rules and applied the rules in the store. However, he stated that the intention was to accommodate Malmstrom and provide access to the training. Barton stated that he was confident that Malmstrom would be safe, but subsequently admitted to Rona's HR investigator that, in hindsight, he would not do it again.

Rona argued that Barton failed to uphold its safety expectations and so breached the employment contract, justifying his dismissal. Rona submitted that, as a managerial employee, Barton was held to a higher standard, and ought to set an example for the other employees and ensure their subordinates behaved properly. Rona argued that, as a result of Barton's breaches of its health and safety rules and policies, Barton revealed that he was unsuitable as a "role model and authority figure" and the employment relationship was therefore irreparably harmed (Rona, para. 3-7). Rona also correctly identified that Barton's actions may have exposed the organization to regulatory liability under the Occupational Health and Safety Act (Section 66(4) of the Occupational Health and Safety Act, RSO 1990, c. O.1 provides that an employer may be held liable for acts or neglect of its managers and supervisors. Specifically, "in a prosecution of an offence under any provision of this Act, any act or neglect on the part of any manager, agent, representative, officer, director or supervisor of the accused, whether a corporation or not, shall be the act or neglect of the accused.").

The Decision

In this case, Justice Lauwers noted that Rona is "culturally committed to workplace safety" and such commitment is well reflected in Rona's documentation and practices. Among other things, Rona's employee handbook contains a number of rules designed to ensure employee safety, including that power equipment must be used in a safe manner (Rona, para. 16). In fact, according to the handbook, using power equipment unsafely is cause for immediate dismissal (Rona, para. 17).

Even though the health and safety policies were not explicitly incorporated into Barton's employment contract by reference, Justice Lauwers held that these policies, including those contained in the employment handbook, formed part of Barton's employment contract and were binding (Rona, para. 22 – 24).

Accordingly, Justice Lauwers recognized Barton's misconduct was serious (Rona, para. 54), holding that "Mr. Barton breached his obligations as a manager in failing to take the steps that he could have taken to prevent the lift and to prevent the descent. He did not instruct Mr. Stirk and Mr. Malmstrom not to undertake the lift when he had the opportunity to do so [...] nor did he take steps to prevent the descent" (Rona, para. 26).

However, Justice Lauwers also recognized that the analysis to be applied by the Court when evaluating cause for termination was more nuanced than Rona suggested (i.e. a breach of the safety rules justifies dismissal). While Rona may have formed the view that Barton lacked the character required of senior management and decided for business reasons to make an example of him, this was a business decision that did not necessarily meet the contextual test required by past jurisprudence.

In particular, Justice Lauwers noted that Barton had historically been a good employee, he did not give permission for the lift and he "tried however ineffectually to prevent the lift" (Rona, para. 54). Applying the principle of proportionality and bearing in mind that termination was the most severe sanction available to an employer, Justice Lauwers held that "this is a situation in which a stern warning to Mr. Barton never again to permit a safety infraction by an employee would have sufficed" and termination was not justified (Rona, para. 54).

Therefore, Justice Lauwers held that Rona was entitled to dismiss Barton for its own business reasons, but that doing so was a breach of the employment contract, which entitled Barton to damages equivalent to 10 months' notice (Rona, para. 56 - 66).

Gowlings' Analysis & Recommendations

The Rona case highlights the consequences of well-intentioned, deliberate acts of employees that are nevertheless contrary to employer policies and procedures. The outcome is consistent with the current state of the law in Ontario, which allows an employer to discipline employees for failing to comply with policies and procedures, but which does not recognize the universal enforceability of "zero-tolerance" clauses in such policies and procedures.

In applying this contextual approach to cases of wrongful termination, Justice Lauwers recognizes the severity of Barton's behaviour, but concludes that Barton's actions, while certainly misconduct, did not warrant termination – the capital punishment of employment law. One wonders, however, whether the Court's conclusion would have been the same if Malmstrom, another employee or a bystander had been injured during the lift. After all, safety rules are designed to minimize risk and employers, rightfully, ought to expect strict compliance from their employees.

The decision also appropriately recognizes that an employee handbook, and the policies and procedures contained within, can form part of the employment contract even when they are not specifically referred to or incorporated by reference in a contract of employment and even when the policies are modified during the course of employment.

In light of this decision, employers are reminded of the following best practices:

  • "Zero Tolerance" clauses are not universally applicable. When considering whether to terminate an employee for failing to comply with an employment policy or procedure, the employer must use a contextual approach to balance the severity of the incident with the sanction imposed. As in Rona, this often includes a review of the employee's past disciplinary record. It is only in the strongest of cases where a Court will treat an employee's failure to comply with a policy or procedure as just cause for termination.
  • Employers should respond to violations of employment policies or procedures with progressive discipline. In Rona, the Court suggests that Rona should have disciplined Barton prior to dismissing him. Employers should regularly monitor compliance with employment policies and procedures, and discipline employees (including supervisors) found to be in contravention. Enforcement of occupational health and safety policies and procedures is particularly important, given the maximum penalties to an organization of $500,000 for each contravention of the Occupational Health and Safety Act and/or regulations made under the Act.
  • The duty to accommodate requires respect for dignity. The needs of persons with disabilities must be accommodated in a manner that most respects their dignity, to the point of undue hardship. This may prevent an employer from excluding an employee with a disability from a team event if attendance can be facilitated without causing undue hardship on the organization. As in Rona, however, attempts to accommodate should never trump the basic principles of employee safety.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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