Canada: Non-Union Termination Issues

Employee with 21 Years of Service Terminated for Single Violation of Privacy Policy

By Matthew M. Larsen

In a recent decision, Steel v. Coast Capital Savings Credit Union, 2015 BCCA 127, the B.C. Court of Appeal upheld the termination of a long service employee who was terminated for a single violation of the employer's privacy policy.

Facts

At the time of her termination, Ms. Steel was a 21 year employee of Coast Capital Savings Credit Union ("Coast Capital"), working as part of the IT Helpdesk team. Steel's position provided her with unfettered access to every document in Coast Capital's database, which included access to the personal electronic folders of other employees on Coast Capital's network. These personal electronic folders contained both confidential personal information and business-related documents.

Employees, including Steel, were forbidden by Coast Capital's privacy policy from accessing any other employee's personal folder without that employee's consent. Coast Capital had a detailed protocol in place that was to be followed in the event that Helpdesk employees were required to access another employee's personal electronic folder.

When Steel became curious about the assignment of highly sought after parking spaces, she accessed a document in her manager's personal folder that contained a parking priority list. Steel's actions came to light after her manager attempted to access the parking document and learned it was being remotely viewed by Steel. Steel acknowledged that she opened the document without permission and Coast Capital dismissed her for cause. Steel sued, alleging that she had been wrongfully dismissed.

Trial Court Decision

The trial judge dismissed the case. Applying the Supreme Court of Canada's (SCC) decision in McKinley v. BC Tel, 2001 SCC 38 (McKinley), the court found that Steel's actions amounted to just cause. The trial judge emphasised the importance of trust in the banking industry and noted that Steel's conduct violated this trust in two ways. First, she opened a confidential document in another employee's file for her own purposes, not as part of her duties and not at anyone's request. Second, she violated the protocols that governed situations in which remote access of such documents was undertaken. Steel appealed.

Court of Appeal Decision

The Court of Appeal dismissed the appeal.

The Court began its analysis by reviewing the trial court's application of the SCC's decision in McKinley. The Court noted that accessing confidential documents in accordance with Coast Capital's privacy policy was a fundamental obligation of a Helpdesk employee. The Court agreed with the trial judge that this fundamental obligation placed Steel in a position of substantial trust and made the continuing existence of that trust fundamental to the viability of the employment relationship. It was open to the trial judge, based on the fundamental nature of this obligation, to find that the misconduct had resulted in a fundamental breakdown of the employment relationship.

Takeaways for Employers

This is the second decision this year in which the Court of Appeal has upheld the termination of a long-term employee for a single act of misconduct (see Roe v. British Columbia Ferry Services Ltd., 2015 BCCA 1).

This decision is encouraging for employers who are faced with an employee who has engaged in actions that undermine the trust necessary for a working employment relationship. Such actions could include the violation of an important employment policy, particularly where the employee is in a position of trust.

While the Court of Appeal did not address the level of trust required of employees in the banking industry, it also did not overturn the trial judge's broad application of this principle. Thus, the question regarding extent of this obligation in this industry remains open.

Don't Forget to Check Those Text Messages! After-acquired Cause Upheld for its "Criminal" Nature in Safety Sensitive Industry

By Julie Menten

In Van den Boogaard v. Vancouver Pile Driving Ltd., 2014 BCCA 168, the B.C. Court of Appeal unanimously affirmed that a supervisor's conduct of procuring drugs from an employee under his/her supervision will support a finding of just cause, even when the employer discovers the misconduct after the supervisor had already been terminated on a without cause basis.

Facts

Mr. Van den Boogaard, a senior project manager, was responsible for the safety of a job site in a safety sensitive industry. His core duties included workplace safety and the enforcement of drugprohibition policies.

After approximately two years of employment, he was terminated on a without cause basis and provided four weeks' salary in lieu of notice. When he returned the company's property, the employer discovered a series of text messages on his company cell phone. These text messages were sent to a unionized employee he supervised for the purpose of soliciting and procuring drugs.

After Van den Boogaard was terminated, he brought a wrongful dismissal claim, alleging he had been provided with inadequate pay in lieu of notice. The employer responded to the claim by alleging after-acquired cause. It alleged, in part, that Van den Boogaard had used the company cell phone to procure and solicit drugs from an employee he supervised. At trial, Van den Boogaard admitted to this misconduct and admitted that he "may" have used drugs with this particular employee, but only after work.

The employer argued that this conduct amounted to a gross breach of the trust required of him as a senior manager. It said that soliciting illegal drugs from an employee went to the heart of the employment relationship.

Trial Court Decision

The trial judge agreed with the employer and found that procuring illegal drugs is misconduct that goes to the root of the employment relationship.

Court of Appeal Decision

On appeal, Van den Boogaard argued that the trial judge did not apply the McKinley contextual approach properly, but instead took a strict and inflexible approach when determining whether there was just cause. He argued that the employer had a lax attitude towards drugs and the trial judge should have considered that this was largely off-duty conduct with a subordinate who was also a friend. Van den Boogaard asserted that had the employer discovered this conduct while he was still employed, he would not have been terminated for just cause and noted that the employer did not submit evidence to the contrary. By ignoring this evidence the trial judge made a blanket ruling that soliciting and procuring illegal drugs was automatically incompatible with a supervisorsubordinate relationship.

Van den Boogard did not find a a sympathetic ear at the Court of Appeal. The Court found that the trial judge did not make a blanket ruling, but clearly gave more weight to the fact that Van den Boogaard was in a position of responsibility on a dangerous job site.

Van den Boogaard also argued that the trial judge had made a palpable and overriding error when he found that there was afteracquired cause to terminate his employment. He argued that there was no evidence that his actions affected the safety of the workplace or that any misconduct took place during work hours. The Court of Appeal disagreed. The Court held that the employer is not required to provide evidence of actual negative consequences: it is sufficient to show a risk of harm.

Van den Boogaard then argued that because the employer did not expressly state that procuring drugs from a subordinate could lead to termination, just cause could not be upheld. The Court of Appeal disagreed again, noting that the McKinley test has an objective element. The question the court must answer is whether the misconduct is something a reasonable employer could not expect to overlook, having regard to the nature and circumstances of the employment.

The fact that the employer only learned of the misconduct after Van den Boogaard was terminated was of no consequence. All the employer was required to show were facts subsequent to the dismissal that were sufficient to warrant termination for cause.

Takeaways for Employers

Employers can rely on misconduct discovered after terminating an employee to change a without cause termination to a termination for cause. A termination for cause negates an employer's obligation to provide notice or pay in lieu of notice.

When terminated employees return company devices, take the time to look through the text messages, emails and internet history. You never know what you might find.

Any criminal conduct that you discover could be used to protect yourself from liability for a wrongful dismissal claim. This is particularly true for employees who are in positions of authority or where the misconduct could impact safety.

"But I Didn't Even Fire You!" Intention to Terminate not Determinative where Employer Prevents Employee from Performing Job Duties

By Jennifer A. Hogan

In Thompson v. Cardel Homes Limited Partnership, 2014 ABCA 242, the Alberta Court of Appeal Confirmed that preventing an employee from working during a purported "working notice" period can constitute constructive dismissal.

Facts

Thompson was first employed as the Regional President, Calgary with Cardel Homes Limited Partnership ("Cardel") in September 2008 pursuant to a two year written contract (the "2008 Agreement"). The parties entered into a new written agreement in September 2010 (the "2010 Agreement"). The 2010 Agreement was for a oneyear term and did not provide for a severance payment in the event of non-renewal. Cardel had absolute discretion to terminate the 2010 Agreement at any time with four weeks' written notice in which case Thompson was entitled to a 12-month severance payment for early termination.

One month before the 2010 Agreement's term expired, Thompson was advised by letter that his contract would not be renewed and that he was not required to work for the remainder of the term. The letter also advised him that he would be paid until the end of the term and instructed him to immediately return certain workplace items, including his keys.

He was further advised by Cardel's President and CEO that he (the President) would be assuming all of Thompson's duties effective immediately and that his service with Cardel would end that day. The narrow issue at trial was whether Cardel had terminated Thompson's employment or whether it had simply given him advance notice that the 2010 Agreement would not be renewed.

Cardel argued that it did not terminate Thompson's employment before the end of the fixed term. It submitted that the letter was Simply notification that his contract would not be renewed at the end of the term, and that it had relieved Thompson of his duties as a favour to him so that he could start looking for new employment.

Trial Court Decision

The trial judge found that Thompson was terminated without cause by way of constructive dismissal, entitling Thompson to the contractual severance payment of 12 months' salary.

Court of Appeal Decision

The Court of Appeal dismissed Cardel's appeal. The Court found that the letter, viewed objectively, constituted a termination on the basis that Thompson was not permitted to:

  • Continue his employment;
  • Discharge his duties or exercise his powers;
  • Come to the office.

In the Court's view, these facts Supported a finding of constructive dismissal and termination. The Court noted that the test for constructive dismissal is not merely objective. It has a subjective aspect to it, namely what a person in a position of the employee, acting reasonably, would have considered. The Court held that the immediate and substantial change to Thompson's status and employment-related powers gave rise to a reasonable inference that his employment had been terminated.

The Court went on to observe that "contracts of employment are mutual contracts. If they are to be terminated early or there is to be a unilateral change in their terms, both parties must agree, regardless of the duration of the contract." In this case, Thompson had not agreed to an early termination or to a change in the terms of his employment.

The Court noted that, typically, the damages for the early termination of a fixed term contract would be amount the employee would have earned until the end of the term. However, the parties in this matter had contracted otherwise and agreed that Thompson would be entitled to 12 months' salary. The Court held that there was no reason to depart from this agreement. Therefore, Thompson was entitled to the 12-month severance payment notwithstanding the fact that he was only dismissed one month before the end of his fixed term.

Takeaways for Employers

An intention (or not) to terminate an employee's employment is not determinative where an employer makes a unilateral, fundamental change to the terms of an employee's employment. In this case, this change was preventing Thompson from working and altering his employment status.

This case highlights the dangers of preventing an employee from working and emphasizes the importance of carefully drafting employment contracts.

Upcoming Events

Our 2015 Workplace Law Education Series continues with the following upcoming topics:

  • Emerging Accomodation issues: Family Status and Aging Workforce Issues, June 2015
  • Managing (claims of hybrid Conduct): Where Performance Issues and Medical Issues Intersect, September 2015

Our registration form can be found on our website.

RG Spotlight - Jennifer Russell

Jennifer Russell joined the partnership in March 2015. She is a skilled and loyal advocate who builds strong relationships with her clients by developing a deep understanding of their businesses and unique challenges.

You have been practicing employment and labour law for over 10 years. What aspects of this area of law do you findchallenging and rewarding?

There is never a dull moment in this area of practice; clients are always calling with a new and interesting issue or a great story. It is an area of law that is constantly changing so intellectually it keeps me on my toes. Labour and employment law is also practical and relevant. It is about the things that happen on the shop floor, in the classroom and in the boardroom. The cases we deal with affect the daily lives – and livelihoods – of employees and employers.

What is your favourite part about practicing labour and employment law?

I enjoy the fact that lawyers get to play two clear roles in this area of practice: we are both advocates and advisors. I love the challenge of litigating tough cases and the process of crafting and defending a successful argument in court or at arbitration. The other satisfying side of our practice is that we get to be proactive and partner with our clients to develop solutions and strategies to address workplace issues before they even become disputes. In other words, we both get to fight-the-fight and help keep the peace.

You have recently returned to full time practice after a year of maternity leave. How has that experience changed your life?

How hasn't it changed my life? My world was completely transformed for the better last April. I laugh every day and see the world though a different and more joyful lens. It is so fun to have Ozzie's adorable little face to come home to at night. On a practical level, I thought I was a good multitasker before Oscar was born, but you should see me now!

What's New

In April, we were extremely proud to see Thomas A. Roper, QC presented with an Honorary Life Member Award at the Human Resources Management Association (HRMA) luncheon. This award is granted to a person who has made an outstanding contribution to the human resources profession. With a career spanning 40 years, Tom has long been an advocate for the highest standards of employment practices.

Tom serves as a role model for young lawyers and is a significant contributor to the education of both lawyers and business professionals in the human resources and legal communities. In May, we participated in the 2015 Rope for Hope challenge to raise awareness and funds for our local Make-A-Wish® chapter. Ropers Ropesters raised $5450 and rappelled 36 storeys down the Hyatt Regency hotel. Thank you to everyone who generously donated.

We also welcomed, new associate, David Louie to the firm. David joined the firm as a Summer Student in 2013 and was called to the British Columbia bar in May 2015.

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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