by Keri Bennett
The Supreme Court of Canada tells Canadian employers that they must strike a balance between the severity of the misconduct and the sanction imposed when deciding whether to terminate employment for cause. So what happens when the misconduct is a single act? Can that justify termination for cause? According to the British Columbia Court of Appeal in Steel v. Coast Capital Savings Credit Union, the answer is yes.
A single incident of employee misconduct may justify termination of employment for cause—at least where the misconduct constitutes a fundamental breach of the employment relationship. The court of appeal also confirmed that employees with considerable autonomy are held to a high standard of trust.
The 21-year employee in this case worked as an IT helpdesk analyst. Because of her role, she was able to access any document or file in the organization. She also had a significant amount of autonomy in the performance of her job duties.
The employer took confidentiality and privacy very seriously and had policies in place with respect to access of information. The employee was aware of and had signed off on the various policies that governed her conduct and access to information in the workplace.
One of the managers maintained a spreadsheet that contained the priority list for the limited number of employee parking spaces. The employee did not have a parking spot and was affected by and interested in this priority list. The manager maintained the spreadsheet in a personal folder, which also contained confidential employee information such as pay grades and seniority dates.
The manager discovered that the employee accessed the spreadsheet without authorization. The evidence showed that the employee knew she did not have authorization to access the document.
The trial judge reviewed the Supreme Court of British Columbia’s contextual approach to the determination of whether an employee’s misconduct warrants termination for cause. In McKinley v. BC Tel, the Supreme Court of Canada stated that the court must strike a balance between the severity of the misconduct and the sanction imposed. In the context of dishonesty, the test is whether the employee’s dishonesty gives rise to a breakdown in the fundamental employment relationship.
The trial judge concluded that the employee in this case was in a position of great trust in an industry where trust is of central importance. In addition, the employer had clear policies and protocols in place.
The employee knowingly violated these policies by opening a confidential file for her own purposes and without the authorization of the document’s owner or anyone else entitled to grant such permission.
The British Columbia Court of Appeal agreed with the trial decision. It concluded that the Supreme Court decision in McKinley makes clear that a single act of misconduct can justify dismissal if the misconduct is of sufficient character to cause the irreparable breakdown of the employment relationship.
The court of appeal supported the trial judge’s finding that, notwithstanding the employee’s length of service, the employee held a position of substantial trust. The breach of the employer’s clear policies on privacy-related matters, which was done for personal benefit, resulted in a fundamental breakdown of the employment relationship. The employer therefore had just cause to terminate the employment relationship.
Takeaway for employers
The British Columbia Court of Appeal confirmed that the contextual analysis in McKinley must still be applied when considering whether a termination for cause is justified. However, where an employee in a position of substantial trust breaches the policies of the employer, termination for cause may be appropriate even if there is only one incident of misconduct. Although a decision from British Columbia, it will likely have impact across the country.
Employers across Canada should continue to ensure that they have clear policies and protocols in place, including policies on privacy and confidentiality in the workplace. Employers should also make employees aware of the potential consequences for breach of established policies and protocols.