Reversing a lower court decision, in Fernandes v. Peel Educational & Tutorial
Services Limited ("Fernandes"), the
Ontario Court of Appeal ruled that a school had just cause to fire
a teacher who had "committed acts of misconduct, including
the creation of false marks and inaccurate grades and then lying to
cover up the improprieties".
This case confirms what many employment lawyers (including the
authors) already thought: that serious and wilful misconduct
fundamentally and directly inconsistent with an employee's
obligation to his or her employer ought to constitute just cause,
especially when (a) it causes the employer harm, and (b) the
employee was dishonest when confronted with the allegations.
The decision is also a good reminder that in many cases fraud
will constitute just cause. It also provides some sound lessons to
Alberta employers who often forget the following:
Fraud, or similar type allegations
like theft, will usually need to be proven to a high standard.
Therefore, the standard of proof will be higher than the usual
balance of probabilities but likely lower than the criminal
standard of beyond a reasonable doubt;
These types of allegations are in
many cases very difficult to investigate and prove because they
involve complicated allegations beyond the understanding of the
average person. Allegations of financial fraud may require an
employer to engage outside and neutral experts, such as
Allegations of misconduct, fraud or
otherwise, generally require an employer to conduct an
investigation prior to executing a termination. Fulsome
investigations require (a) the employee suspected of misconduct to
be interviewed (sometimes several times) and confronted with the
allegations, (b) witnesses to be interviewed, and (c) evidence,
such as emails and video surveillance, to be reviewed and
While it is often prudent to have an
investigation done internally by a Manager or Human Resource
Professional, in many cases an outside investigator is a much
better option. Examples of when an external investigator might be
preferred include when the allegations are complicated, when an
employer's reputation is at risk, or when the internal
investigator could be seen to be biased. Remember that the
investigator may ultimately be required to testify at trial about
the investigation, so consideration should be given to whether the
internal investigator would make a good witness.
If an investigator does conclude that
serious and wilful fraud has occurred, an employer will usually
terminate the employee for just cause. However, there is still no
guarantee that a trial judge will agree. In Fernandes, the Court
sided with the employee and awarded severance, and it took a costly
appeal for the Employer to finally be vindicated. If a sound
investigation is conducted, the court might disagree with the cause
allegation however the damages will usually be limited to a typical
wrongful dismissal case as opposed to being increased to address
bad faith in the investigation.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).