Can an employer terminate an employee with just cause for a
single incident which breaches the trust fundamental to an
employment relationship? The British Columbia Court of Appeal (the
"BCCA") suggested that the answer to this
question was yes in March 2015, and as of September 17, 2015 the
Supreme Court of Canada has tacitly agreed by denying leave to the
case of Steel v Coast Savings Credit
In this case the dismissed employee
was a Helpdesk Analyst who worked in the IT Department of the
Credit Union. The employer had established personal files for each
employee. If a Helpdesk Analyst was assisting another employee,
there was a specific procedure set out to protect the
confidentiality and privacy of these files and the other employee.
Ms. Steel, the dismissed employee, had a 21 year history with the
This 21 year employment
relationship came to an end with one poor decision by Ms. Steel.
Unfortunately for Ms. Steel she chose to abuse the access that she
had to the system as a Helpdesk Analyst, and in complete violation
of the established procedures, she accessed a manager's file.
Why did she access this file – to view her place on a list to
obtain a parking space. Wherever Ms. Steel was parking while she
waited to obtain a company parking space must surely have been less
costly than the price of losing her job. When the Manager attempted
to view his files and was unable as the documents were opened by
Ms. Steel her decision to violate Company policy was uncovered. She
was terminated with cause as a result as the employer cited that
the incident caused it "to lose faith in [her] judgment"
and "resulted in a serious loss of confidence."
Terminating an employee for just
cause is always a fine line for employers to walk as when an
employee is terminated with cause there is no cost to the employer;
however, if an employee is terminated without cause or cause is
erroneously asserted it is possible for an employer to have to pay
common law notice to an employee. A ballpark figure for common law
notice is about 1 month for every year of service – it is
therefore not surprising that Ms. Steel choose to sue her former
employer and claim wrongful dismissal damages.
This wrongful dismissal suit forced
the courts to revisit the Supreme Court of Canada decision in McKinley v BC Tel 2001 SCC
38. In this early case the Supreme Court of
Canada established the test used to determine if the employee
misconduct was sufficient to violate the essential condition of
faith and trust required for an employment contract. In
McKinley the Court indicated that the approach to be taken
in determining if the misconduct was sufficient was contextual and
that it required considering all factors such as length and quality
of service and the nature and severity of the misconduct. The BCCA
in Steel was required to determine whether a single
incident of dishonesty is sufficient to cause an irreparable
breakdown in the employment relationship such that just cause can
properly be asserted by an employer.
In a 2:1 split decision the BCCA
upheld the trial judge's analysis and accepted that Ms.
Steel's decision to breach procedure and read a personal file
without permission was sufficient to justify dismissal with cause.
The trial judge noted that her position was in an industry,
finance, where trust is of central importance; she had access to
confidential documents; and there were clear policies and protocols
known to Ms. Steel. Furthermore, the employer was not in a position
to monitor her access and therefore had to trust Ms. Steel to
properly obey its policies and access documents only with
permission. This was sufficient to establish that trust was
fundamental to the employment relationship. Consequently, she
breached the trust principle in two ways as she viewed a document
for her own purpose and she violated the policies in place. As a
result she was properly dismissed for cause according to the
Employers should take note of this
case for the idea that an employee can in limited circumstances be
successfully dismissed with cause based on a single incident that
establishes a breach of trust. Although the Supreme Court has not
directly ruled on this issue, its decision to deny leave can be
seen as a tacit endorsement of the position of the BCCA. Although,
this case can be viewed as a win for employers, when considering
whether to terminate an employee for cause caution should continue
to be exercised.
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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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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