Just cause is not a lost cause: summary dismissals require appropriate investigations.
Many employers do not understand when employees can, and cannot, be dismissed for cause. In fact, "just cause is not a lost cause" is a message that 1 often convey to clients who are convinced no one can be dismissed for cause in Canada. Employers should not be afraid to summarily dismiss employees when it's justified. That said, I caution clients never to react in haste and to always consider the strength of their position in light of the law before taking action.
One often hears horror stories of employees sleeping on the job, stealing from their employer or engaging in other misconduct. Some people respond by simply saying "fire them," without any further consideration. The reality, however, is that Canadian employment laws are more nuanced. Summary dismissal requires a broader consideration of the issues and, in most cases, an appropriate investigation.
When can you dismiss?
Employees can be dismissed for cause when their misconduct or performance is so egregious that the employment relationship has been irreparably harmed. In such circumstances, our courts and arbitrators will find that just cause for dismissal existed and uphold a termination.
The difficulty is determining when that line has been crossed. In any situation where an employee engages in misconduct, the employer must take a contextual approach in assessing whether just cause for dismissal exists.
This approach involves considering not only the misconduct in question, but also the entirety of the employment relationship. This includes the length of the employment relationship, the nature of the employee's position and duties, any prior discipline and any other contextual factors relating to either the relationship or the misconduct in question.
For that reason, it's entirely possible that two employees will be guilty of the exact same misconduct but their penalties will differ. For example, a long-term employee with a clean disciplinary record will typically be given more leeway than a recent hire who has been in trouble several times.
And the misconduct can't be considered in isolation. It's only after all relevant factors have been considered that an employer, or a court, can determine whether the relationship has been irreparably harmed by the misconduct.
Investigation in progress
When faced with an employee's apparent misconduct, an employer should conduct an appropriate investigation. Doing so is important for a number of reasons.
In some cases, a proper investigation will reveal that the employer's initial reaction may have been unfounded and that there was a reasonable explanation for the employee's apparent misconduct.
This situation occurred to a client of mine who believed that a senior manager had engaged in a fairly blatant theft of company property. An investigation revealed that the manager had been moving property so that it would not be susceptible to theft when it would not be monitored. Had the employers reacted before investigating, as they were initially inclined to do, they would have not only opened themselves up to a significant wrongful dismissal claim, but also lost a valued member of their leadership team without good reason.
In other circumstances, the employer may confirm misconduct, but the investigation will reveal mitigating circumstances that would preclude dismissal. Learning of such information prior to dismissal will save the employer from a potentially costly wrongful dismissal claim.
Conversely, an investigation may provide the employer with additional evidence upon which to base a conclusion that she does have grounds for summary dismissal. The employee may essentially dig herself deeper into the hole she has created by engaging in dishonest and deceitful conduct which will further erode any remaining trust and demonstrate that the relationship has been irreparably harmed.
In assessing whether the employment relationship has been irreparably harmed, courts and arbitrators will often consider the employee's behaviour during the investigation. In many cases, this can make the difference between a finding of just cause and a finding that dismissal without notice was excessive. A nonapologetic, dishonest employee is less likely to be given a second chance than one who admits to wrongdoing and offers suitable apologies and assurances that it will not happen again.
In many circumstances, it will be appropriate for the employer to retain a third party to conduct an investigation, particularly where witnesses, including the employee in question, must be interviewed.
Employers should never leap to judgment upon learning of an employee's misconduct. No matter how egregious the conduct appears to be, it's crucial that employers engage in an appropriate investigation, consider all the contextual factors and then decide whether summary dismissal is warranted.
I regularly monitor just cause cases throughout the country and can comfortably say that courts and arbitrators will uphold summary dismissal in appropriate circumstances. However, the onus will be on the employer to justify the decision.
Stuart Rudner is a partner in Miller Thomson's Labour & Employment Law Group in Markham, Ont.