The battle to prove just cause doesn't end with termination.
Employers can rely on new grounds and win in court even if those
grounds are discovered months, or even years, after the
termination. But it requires doggedness and determination.
Shelly Harrigan demonstrated that tenacity and won.
After inheriting Vancouver-based Harrigan Rentals and
Equipment from her late father, Shelly Harrigan, who had little
experience in the business, relied on Kenneth Campbell, its
financial controller. His compensation for this was a company
gas card that Harrigan told him was for personal use.
Several years later, Harrigan stumbled upon evidence Campbell
had been using the gas card for his wife's vehicle. When she
confronted him, he said he believed he understood the card to be in
lieu of a pay increase. Harrigan asked him to leave the workplace
She began scrutinizing Campbell's expenses and discovered he
had also submitted medical expenses on behalf of his wife, although
they were separated. Harrigan believed the wife did not qualify for
payment of these charges and that Campbell would have known
She fired Campbell for just cause, but kept digging for evidence
of wrongdoing. Constance Henry, Campbell's successor, was asked
to review his accounting records. Henry discovered Campbell had
taken two salary advances. She also found that despite being aware
of a significant variance between the accounting records and the
inventory count, Campbell directed staff to accept the higher
figure, inflating the inventory's value, thereby undermining
the integrity of the company's financial reporting.
Campbell, meanwhile, sued for wrongful dismissal and went to
trial. But Harrigan's persistence paid off.
Of the original grounds for dismissal, Mr Justice William Ehrcke
of the British Columbia Supreme Court found Harrigan's
direction on the use of the gas card was ambiguous. Even she had
used her gas card for personal use, so Campbell could reasonably be
excused for doing likewise. Similarly, the allegation of
mischarging medical expensesdid not hold up: Campbell had
reasonable grounds to believe his spouse, albeit estranged, could
still claim medical expenses to be re-imbursed by the insurer.
However, the judge did find that the new grounds of unapproved
salary advances and inflated inventory were so serious they
amounted to just cause. And it did not matter that they had been
discovered after termination. The court was outraged Campbell had
advanced his salary without authorization. While the advances
appeared on the records and were repaid, it did not diminish the
gravity of his offence.
The court was unsympathetic to Campbell's claim that the
practice of inflating the inventory had been approved by the
deceased owner. Even if that were true, he had an obligation to
draw it to Harrigan's attention when she took over.
Campbell's lawsuit was dismissed.
The lessons for employers speak to the importance of a strategic
approach to firing for cause and an aggressive stance in defending
wrongful dismissal actions:
Anticipate the defences Harrigan should have
thoroughly interviewed Campbell before dismissing him. This would
create an objective transcript, reducing the element of surprise in
the trial and eliminating newly developed excuses after the
employee retains counsel.
Record interviews In this case, the court was
faced with divergent versions as to what Campbell said in his
defence to the gas card allegations. In the absence of a recording,
the court sided with the employee.
Do the legwork before termination The court
determined there was no evidence that an employee could not claim
insurance benefits for a separated spouse. That issue should have
been sorted out before the dismissal.
Take a hard look The courts require employers
to apply a principle of proportionality to an employee's
wrongdoing. Even if the employee has misbehaved, it must be
sufficiently serious to amount to cause. Harrigan assumed a
considerable risk by relying on her original grounds for
Follow the pattern Harrigan instinctively
understood the old Quebecois saying that "Three follows
two." Because dishonesty is rarely isolated, every aspect of
an employees's work, including expense claims and work reports,
should be scrutinized even after firing. I maintain that if you
find dishonesty in one area, you are bound to find it in
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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