Northern Exposure

Disloyal conduct may justify termination

by Mohamed Badreddine

There is little dispute that senior employees owe a duty of good faith and loyalty to their employers. But what about junior employees—do they owe their employers the same duty? And if so, can they be fired if they violate that duty? Depending on the situation, the answer may be yes—at least in Quebec.

Article 2088 of the Civil Code of Québec makes it clear that all employees, regardless of level, owe a duty of loyalty to their employer:

2088. The employee is bound not only to perform his work with prudence and diligence, but also to act faithfully and honestly and not to use any confidential information he obtains in the performance or in the course of his work.

These obligations continue for a reasonable time after the contract terminates and permanently where the information concerns the reputation and private life of others.

In Provigo (Alimentation D.M. St-Georges Inc. – Saint-Michel-des-Saints) and Travailleuses et travailleurs unis de l’Alimentation et du commerce, Local 500 (Nancy Beaulieu), an arbitrator had to consider whether a cashier at a grocery store deserved to be fired when she violated her duty of loyalty.

Facts

The employer in this case operates a grocery store in Quebec. The employee had worked at the grocery store as a cashier for over 18 years. She had a clean disciplinary record.

On July 18, 2013, while checking out a regular customer of the store, the employee asked the customer whether he had been to Walmart lately, as their prices were lower than the employer’s. The employee went on to give some examples, such as the lower price of cheese at Walmart.

Shocked at the employee’s comments, the customer told one of the employer’s co-owners. The employer attempted to meet with the employee to investigate. The employee refused to meet and the employer terminated her employment for cause. The reason—breach of trust over a serious act of disloyalty.

Sometime after the termination, the employer learned that the employee had committed a similar act in February 2011. That time, she advised a customer to buy her products elsewhere, where they were less expensive.

Grievance

The union representing the employee filed a grievance. The union raised the employee’s many years of service and her clean disciplinary record as mitigating factors.

The employer claimed that the employee’s actions constituted serious misconduct and had resulted in a breach of trust. The employer claimed that this misconduct was all the more serious in light of the nature of the employer’s business activities and the competition it faced from competitors like Walmart.

Decision

The arbitrator agreed with the employer—the employee’s conduct constituted serious disloyalty. Because of the serious nature of the disloyalty, progressive discipline was not required.

In support of the decision, the arbitrator noted that the employee’s misconduct was all the more serious given the nature of the employer’s business activities and the protection of its best interests:

[63] [TRANSLATION] […] At the time in question, the complainant worked for the employer, a medium-sized supermarket in a small town far from the major centres. Not only do medium-sized businesses like the employer now have to count giants like Walmart among their competitors, but must also grant their unionized employees much better conditions of employment than those that big box stores offer their own un-unionized staff. In this context, a cashier’s disloyalty constitutes not just serious, but reprehensible professional misconduct. (Emphasis ours.)

The arbitrator listed the following aggravating factors in the decision:

  • The employer runs a medium-sized business in a remote town and faces stiff competition.
  • The employee had been disloyal before—in 2011.
  • The employee was in a position of trust.
  • The employee represented the employer to its customers.
  • The employee expressed no remorse or regret.

The employee’s many years of seniority or faultless disciplinary record did not change anything.

What does this mean for employers?

Misconduct that directly undermines an employer’s best interests constitutes serious misconduct and may breach an employee’s duty to act faithfully—at least pursuant to Article 2088 of the Civil Code of Québec. And at least for now—since the union has applied for judicial review of the arbitrator’s decision.

But employers in the rest of Canada must remember that there is no similar statutory duty of loyalty. Although employees are still required to act loyally vis-à-vis their employers, not every act of disloyalty will justify termination. As such, employers in other provinces must still assess each situation on a case-by-case basis before taking action.