Canadian Employment Law Today

with Tim Mitchell Ask an Expert NORTON ROSE FULBRIGHT CALGARY Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com Canadian HR Reporter, a Thomson Reuters business 2017 2 | March 15, 2017 Canadian HR Reporter, a Thomson Reuters business 2017 Answer: Since the 2001 decision of the Supreme Court of Canada in McKinley v. BC Tel, it has been clear that an employer must show that dismissal was a proportional response to the act of misconduct relied on if it is to succeed in defending a wrongful dismissal action. e assessment requires a contextual approach. While certain categories of misconduct are clearly more serious than others (such as dishonesty, theft, and criminal acts) and thus more likely to be found suffi cient to justify a harsh employer response, the context in which the misconduct occurred will always be important in determining whether the threshold for summary dismissal has been met. In McKinley, the employee was a chartered accountant who was terminated for concealing information about his medical condition. e trial judge stated that the employer was required to prove not only that the employee had committed the dishonest act but also that the act was incompatible with his continued employment. e B.C. Court of Appeal held that the trial judge had erred in imposing the second requirement. e Supreme Court of Canada agreed with the trial judge. It held that BC Tel was also obliged to prove that the nature and severity of the employee's dishonesty justifi ed dismissal in the context of the facts and the employment relationship in which it occurred. is approach guarded against excessive punishment of an employee by the strict application of an unequivocal rule that treated all forms of dishonesty alike. Because this contextual approach focuses on specifi c facts in the context in which they occurred, it is not always easy to discern when an employee's act of misconduct has met the threshold for summary dismissal. e Supreme Court provided some guidance, suggesting that dismissal would be appropriate where a single act of misconduct gave rise to a breakdown in the employment relationship; violated an essential condition of the employment contract; breached the faith inherent to the work relationship; or was fundamentally or directly inconsistent with the employee's obligations to her employer. However, the diffi culty of predicting when the threshold is met on a specifi c set of facts remains. It is well-illustrated in the B.C. Court of Appeal decision in Steel v. Coast Capital Savings Credit Union. e employee was an IT helpdesk analyst who improperly used her comprehensive computer access to view a confi dential document without permission. e document designated a list of priorities for limited employee parking spaces; it also included pay grades and seniority dates. e employee accessed the document to determine her chances of getting a parking spot. e trial judge held that summary dismissal was warranted, relying on the fact that the employee worked autonomously in a position of trust in the fi nancial industry where trust was of central importance. She found that the employer had justifi ably lost trust in the emloyee when she violated confi dentiality policies of which she was aware for purposes of her own. e trial decision was upheld by the B.C. Court of Appeal, with one dissenting judge who would have allowed the appeal, believing that the trial judge had applied the McKinley test incorrectly. In his view, she had placed too much emphasis on the nature of the employer's business and too little on the employee's 21 years of discipline-free employment in upholding the summary dismissal. In the opinion of the dissenting judge, the trial judge had adopted an elevated standard of trust in a context in which it was not properly invoked. e higher standard was properly applied where the employee's misconduct related to the fi nancial industry — money or the aff airs of a client. It was not properly applied to an internal administrative issue that did not compromise the integrity of the employer as a credit union. In the dissenting judge's view, McKinley required employers to assess whether a single act of misconduct was suffi ciently egregious to violate or undermine the obligations and faith inherent to the employment relationship and to keep in mind the integral nature of work to the lives and identities of individuals while doing so. e majority of the Court of Appeal rejected the notion that it was necessary to balance the importance of employment to the individual against the nature and severity of the misconduct. e former factor was properly considered only in determining whether, as a matter of fact, the employment relationship had irrevocably broken down. e factors to be considered as part of the inquiry into the surrounding circumstances were described in Dowling v. Ontario (Workplace Safety & Insurance Board). e court noted that relevant factors relating to the employee included age, employment history, seniority, role, and responsibilities. Factor relating to the employer included its business or activity, relevant policies or practices, the employee's position within the organization, and the degree of trust reposed in the employee. McKinley does not preclude an employer from relying a single act of misconduct to justify a summary dismissal. However, it does require the employer to assess whether that act is suffi ciently serious in the context of the particular employment relationship to cause its irreparable breakdown. It is no longer possible for an employer to point to a category of misconduct such as theft, fraud or dishonesty, as suffi cient in and of itself to justify the dismissal. e contextual approach may also justify dismissal for what might be generally considered to be less serious misconduct. In Aboagye v. Atomic Energy of Canada, an employee was found to have been properly terminated for omitting reference to his current employment from a questionnaire he was fi lling out to obtain security clearance his new position. e omission occurred in an employment context where employees had access to nuclear facilities and information vital to the security of Canada. e employee admitted that he deliberately omitted reference to his current employment and lied when asked about his employment status in an email. In the circumstances, the court had no diffi culty determining that the employee's dishonesty was cause for summary dismissal in that case. It was dishonesty that was properly regarded as going to the core of the employment relationship. For more information see: • McKinley v. BC Tel, 2001 CarswellBC 1335 (S.C.C.). • Steel v. Coast Capital Savings Cred- it Union, CarswellBC 1979 (S.C.C.). • Dowling v. Ontario (Workplace Safety & Insurance Board), 2004 CarswellOnt 4923 (Ont. C.A.). • Aboagye v. Atomic Energy of Canada, 2016 CarswellOnt 20710 (Ont. S.C.J.). Tim Mitchell practices management-side labour and employment law with Nor- ton Rose Fulbright in Calgary. He can be reached at (403) 267-8225 or tim.mitchell@ nortonrosefulbright.com. Employee misconduct: The threshold for dismissal Question:Is there a threshold of how serious misconduct can be to warrant dismissal on its own without any prior misconduct by the employee? How can an employer determine this threshold?

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