Canadian HR Reporter

CANADIAN HR REPORTER FEBRUARY 2018 INSIGHT 27 Is all employee dishonesty the same? Factors employers should consider in determining discipline when a worker lies Question: If an employee is caught lying to his employer, should the employer factor in what the lie was about when determining discipline, or can all employee dishonesty be treated similarly? Answer: All employees owe a duty of faithfulness and honesty to their employer. As with other misconduct, the level of discipline will vary and must be measured in the context of the particular employment relationship. However, case law generally recognizes that dishonesty goes to the heart of the employment rela- tionship, which makes dishonesty particularly serious. e magnitude of the lie is a fac- tor to take into account in deter- mining discipline. Dishonest con- duct that is prejudicial to the inter- ests of the employer, or is incom- patible with the employee's duties, may be just cause for dismissal. At some workplaces, employee dishonesty is an extremely serious off ence. Employees in the retail indus- try, for example, work indepen- dently, handling cash and mer- chandise on a regular basis. In this type of workplace, ter- mination is often viewed as the appropriate penalty unless the decision-maker can be confi- dent the trust relationship can be repaired. The importance of honesty also increases with the degree of responsibility and discretion at- tached to an employee's position. For example, integrity and hon- esty are critical to an employment relationship between an employer and a supervisor or manager. In cases involving theft by a su- pervisor, even if the item stolen is of little value, this will not neces- sarily save someone with a higher standard of conduct and integrity. It is also less likely that the trust relationship can be repaired if the employee refuses to accept responsibility for the misconduct in question. A lack of candour and forth- rightness can also lead to an in- ference that the act was premedi- tated, as in UFCW, Local 401 and Sobey's West Inc. Saskatchewan case All of the above factors were re- cently before the Court of Appeal for Saskatchewan in Wholesale Department Store Union v. York- ton Cooperative Association. A supervisor closed a retail gas store early and falsifi ed her time sheets on several occasions. She also directed a subordinate to fal- sify his time sheets. When the employer investigat- ed, the supervisor lied and denied any wrongdoing. An arbitrator set aside her ter- mination, but both the Court of Queen's Bench for Saskatchewan and Court of Appeal upheld the termination. The supervisor worked in a position of trust, according to the Court of Appeal, frequently worked without supervision, and was responsible for operating the store independently and ensuring other employees followed the em- ployer's policies. e court was particularly in- fl uenced by the fact the supervi- sor refused to take responsibility for her misconduct throughout the employer's investigation and continued to deny the misconduct. e Court of Appeal found her ongoing dishonesty fractured the trust relationship and made it im- possible for the employer to have any confi dence it could ever be repaired. In those circumstances, termination was the only reason- able conclusion. e level of discipline imposed should refl ect the context within which the dishonesty occurred. In this way, what the lie was about does indeed matter, and will often indicate how much damage was inflicted on the trust and confidence between employer and employee. For more information see: • UFCW, Local 401 and Sobey's West Inc., Re, 2017 CarswellAlta 1612 (Alta. Arb.). • Retail, Wholesale Department Store Union v. Yorkton Coopera- tive Association, 2017 SKCA 107 (Sask. C.A.). Meghan McCreary is a partner practising labour and employment law at MacPherson Leslie & Tyerman in Regina. She can be reached at (306) 347-8463 or mmccreary@mlt.com. Government passes buck in fi ghting poverty Ontario forces business owners to fi nd ways to make up for new minimum wage If you're in Ontario, please spare a thought for the local coff ee shop owner or dry cleaner if they're looking a little more stressed than usual to start of the year. 2017 was a tough year for governments coming down on business owners, and there haven't been many signs that 2018 is going to be much brighter. As soon as the clock struck mid- night on Jan. 1, the news was dominated by reports that a Tim Hortons franchise outside Toron- to had cut back on some employee benefi ts, such as a paid day off for birthdays and paid breaks, in re- sponse to a provincewide increase to the minimum wage. e wage fl oor, which had been pegged to infl ation and was $11.60 in 2017, shot up to $14. Minimum wage increases hap- pen all the time across the country, with plenty of warning — regular- ly scheduled, tied to infl ation, or done after consultations with the people who sign the paycheques. Most businesses can cope with this kind of predictable increase. In fact, many of our members support the government's wage increase in principle, but say the accelerated timeline "goes too far, too fast." Of course, if you listen to the premier, labour minister and la- bour unions, they dispute any data that shows minimum wage hikes would have any negative ef- fects on workers. ey claim all CFIB (Canadian Federation of Independent Business) and aca- demic reports suggesting a scal- ing back of benefi ts, hours and jobs are hogwash. But faced with evidence that these exact, predictable outcomes are happening — and happening fast — they accuse business own- ers of heinous crimes, suggesting they will sic the labour cops on any fi rm making any changes to accommodate the increase. Governments and unions can't have it both ways. ey can't keep claiming a minimum wage in- crease will have zero negative ef- fects, and then say the sky is falling the second these exact negative eff ects happen. Job losses It wasn't just employer groups raising alarm bells. e Bank of Canada predicted more or less the same result. In a report released in December, it said minimum wage increases across Canada between 2017 and 2019 would cost about 60,000 jobs. TD bank put the number be- tween 40,000 and 80,000, and the Financial Accountability Offi ce of Ontario pegged it at 50,000. So, what are the early eff ects of Ontario's giant minimum wage experiment? In a December sur vey of nearly 3,000 Ontario business owners by CFIB, more than half said they were scaling back hir- ing plans, particularly for young people. About one-third said they were either reducing the number of hours they off er employees or reducing the number of staff. Nearly one in fi ve said they were cutting employee perks. No employer takes joy in roll- ing back benefi ts or hours. ey aren't gleefully cutting costs to put more money into their pock- ets; they are being forced to sud- denly and dramatically increase their payroll. The increase isn't limited to people who were making $11.60 previously: In addition to raising wages for anyone earning under $14, many workers earning $14 or slightly more will expect a similar 21 per cent increase. e Tim Hortons franchise in Cobourg, Ont., is just one exam- ple of how business owners are trying to cope with the increase. Impact on young workers, prices I'm even more concerned by the fi nding that half of small busi- ness owners will have to reduce opportunities for young or inex- perienced workers. Minimum-wage jobs have long been an on-ramp into the labour market, with owners happy to pro- vide on-the-job training to prom- ising teenagers and young adults. I started my career making $3.33 per hour (then Manitoba's minimum wage) washing dishes at a Winnipeg pizza place. If you put too high a price on providing those training oppor- tunities, employers may opt for someone with more experience. Not only does this hurt business owners, who take great pride in training new employees, but it could be devastating for the next generation of workers. Businesses owners are also starting to increase prices — you might have seen a sign taped to the till at your local coff ee shop. Proponents of the hike say the price increases will be off set by minimum wage earners' greater purchasing power, which sounds nice but doesn't hold water. Only eight per cent of the popu- lation earns the minimum wage, according to the same Bank of Canada report. Everyone else has just seen the cost of groceries and other goods go up, without enjoy- ing the same pay bump as those earning minimum wage. While some people say they are happy to pay extra for their morn- ing coff ee, we're already hearing stories of daycare fees rising by $360 a month due to the cumula- tive eff ect of the minimum wage hike. Reports of large hikes in personal care home fees are also starting to hit the news. Irresponsible approach ere is no question the objec- tive behind a minimum wage increase — to reduce poverty by lifting up those in the lowest in- come bracket — is a noble one. It's one that business owners share; in fact, most of our mem- bers were already paying staff above $15 per hour. But the idea that poverty can be legislated away by imposing a rushed, arbitrary wage increase on employers is both wrong and irresponsible. ere are other ways of ad- dressing poverty that don't punish business owners. Gov- ernments could, for example, increase the threshold people have to cross before paying in- come taxes. While the vast ma- jority of minimum wage workers are students or secondary in- comes, more support for train- ing should be off ered to those who feel trapped in a minimum wage job while trying to support their families. But those ideas don't sound as nice at the ballot box. So, while some workers may be better off due to this pre-election goodie, struggling small business owners and other low-wage earners will pay the price. Dan Kelly is CEO of the Canadian Federation of Independent Business (CFIB) in Toronto. For more information, visit www.cfi b-fcei.ca. Question: If an employee is caught lying to his employer, should the employer factor in what the lie was about when determining discipline, or can all employee Meghan McCreary ToUgHest HR QUestioN If you're in Ontario, please spare a thought for the local coff ee shop owner or dry cleaner if they're looking a little more stressed than usual to start of the year. 2017 was a tough year for governments coming down on business owners, and there haven't been Dan Kelly GUest CoMMeNtarY If you put too high a price on training opportunities, employers may opt for someone with more experience. This could be devastating to younger workers.

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