Ontario court overturns just cause dismissal and awards over $97,000 in damages

On a recent Ontario summary judgment motion, Justice Kane considered whether a former employee of Algonquin College (the “College”) had been properly dismissed for just cause.

Prior to her dismissal in February 2015, the employee (“Edmond”) had worked for the College for nearly nine years as its Manager of Cooperative Education. Edmond brought a claim for wrongful dismissal, seeking 12 months’ salary and benefits in lieu of reasonable notice, as well as damages for intrusion upon seclusion and breach of good faith and fair dealing.

Events leading to dismissal

In May 2014, the College authorized Edmond to hire a full-time staff member into her department. Accordingly, a notice of competition for a Co-op Consultant was posted. The posting required that the successful candidate have “a minimum three-year diploma/degree in Marketing and Public Relations.” An earlier draft of the posting allowed either academic qualification or equivalent experience.

The College formed a selection committee (the “Committee”), which was chaired by Edmond. The Committee was required to sign a confidentiality agreement, prohibiting the disclosure of personal and confidential information which may come be obtained during the process. The Committee reviewed twenty applications and interviewed three candidates. Edmond forwarded the majority decision to senior management in favour of hiring one of the candidates, Mr. Noah (“Noah”).

The College rejected the recommendation that Noah be hired as he lacked the required academic qualifications. In response, Edmond wrote and submitted a summary justifying the reasons why Noah should be granted the position.

Despite Edmond’s efforts to have Noah appointed, the College refused his appointment as of January 2015. Noah, who was already working under Edmond, was extremely upset to learn this news. As such, Edmond reached out to a union steward at the College, requesting that she meet with Noah to discuss his options. Edmond also, at the union steward’s request, forwarded on a number of documents from the selection process. The union then filed a grievance on Noah’s behalf, on the basis that the College had failed to award him the Co-op Consultant position.

On February 4, 2015, a Labour Relations Specialist at the College interviewed both Edmond and Noah, then immediately suspended Edmond with pay. Six days later, the LR Specialist submitted a report recommending that Edmond be dismissed for just cause, asserting breach of trust, breach of confidentiality and conflict of interest.

Dismissal for cause

Algonquin accepted the recommendation that Edmond be dismissed for just cause and terminated Edmond’s employment a week later. The College provided Edmond with a termination letter stating that it had made its decision in this regard due to her misconduct in:

1. failing to disclose a personal relationship with Noah to the Selection Committee;
2. breach of her duty of loyalty and insubordination in seeking the cooperation of the union to have Noah hired;
3. disclosure of confidential information to the union to assist it in its grievance against the College on behalf of Noah;
4. failure to be forthright about her personal relationship with Noah, when interviewed; and
5. breach of the College’s confidentiality agreement.

In deciding that the College had failed to establish just cause for dismissal, the Court determined that the recommendation to dismiss Edmond for cause was predicated on inaccurate and misleading statements, unsupported conjecture and speculation. Essentially, Justice Kane found that the College’s allegations largely lacked any reasonable evidentiary basis. The Court rejected that Edmond had a personal relationship with Noah (in this regard, the College relied solely on a perfunctory email sent between Edmond and Noah wishing each other a merry Christmas), or that this alleged relationship somehow tainted her subsequent actions in seeking to have Noah hired.

That said, Justice Kane did find that Edmond had acted inappropriately in providing documents about the selection process to the union steward. His Honour, however, determined that termination for cause was a disproportionate response to misconduct of this nature.

Significantly, Justice Kane noted that Edmond was a “very dedicated” manager with no prior discipline and the College had alternative, less severe, options for discipline at its disposal including a reprimand, suspension with pay, or a without cause dismissal.

Justice Kane awarded Edmond 12 months’ pay and benefits in lieu of reasonable notice and ordered that the College pay her costs on the motion. The issues of intrusion upon seclusion and breach of fair dealing were left to be addressed through a summary trial.

Lessons for employers

It is acknowledged by the courts that a just cause dismissal in employment law is tantamount to “capital punishment in the criminal justice system.” While just cause dismissal does require that a high threshold first be established, it will, in certain circumstances be an appropriate and necessary response. These circumstances may include incidents such as theft, fraud or repeated and serious insubordination. With these thoughts in mind, when considering a termination for cause, employers should look to:

1. Act quickly: In asserting cause for dismissal, an employer is stating that the trust essential to the employment relationship is irreparably damaged. As such, once aware of the allegations that form the basis for this allegation, an employer should immediately withdraw the employee from the workplace. This does not necessarily mean that employment is immediately terminated. Instead, it may make better sense to place the individual on a paid suspension while an investigation is completed and appropriate action confirmed.
2. Ensure consistent treatment of all staff conduct: Employers will likely fail to prove cause for dismissal, where they have previously condoned similar misconduct by another employee. For example, if one employee is given a verbal warning for knowingly submitting improper expense claims, the employer would likely fail to demonstrate cause for dismissal of another employee for the same actions.
3. Conduct an objective investigation: The importance of a prompt and objective investigation cannot be overstated. In the Algonquin decision, the College’s assertion of just cause was largely rejected by the Court on the basis that the report upon which it relied to reach this decision was replete with inaccurate and misleading information. In conducting an investigation, an employer must not set out to prove a desired outcome. Instead, the evidence should be collected and objectively considered, before a conclusion is reached.
4. Get legal advice: As the financial implications of failing to prove just cause can be great, it is best practice to retain an employment lawyer to help navigate this process and provide advice as to the salience of asserting cause, and the cost risk, if wrong. Part of this process may also include, as noted by Justice Kane, consideration of alternate disciplinary options.
5. Ensure that all grounds for cause are asserted and properly plead: In this case, the College sought to rely on additional allegations of cause, beyond those that it set out in its statement of defence. Justice Kane properly found that the absence of such allegations in a pleading prevented the employer’s reliance on the same.

This article was originally published on April 17, 2018 at First Reference Talks.

Vey Willetts LLP is an Ottawa-based employment and labour law boutique that provides timely and cost-effective legal advice to help employees and employers resolve workplace issues in the National Capital Region and across Ontario. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca