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ONTARIO COURT UPHELD JUST CAUSE TERMINATION DESPITE NO PRIOR DISCIPLINARY RECORD

January 20, 2022

In the decision of Goruk v. Greater Barrie Chamber of Commerce [Goruk], the Ontario Superior Court of Justice (the “ONSC”) upheld the for-cause termination of a long service employee, despite the fact that the employee had no prior discipline and that none of the incidents that led to the termination were sufficient, standing alone, to warrant termination with cause.

Facts

The employee, Sybil Goruk, was the Executive Director for the Barrie Chamber of Commerce (the “Chamber”), a not-for-profit organization in Barrie, Ontario. She was employed by the Chamber for 17 years. The Chamber was governed by a volunteer board of directors (the “Board”), which was limited in its ability to oversee Ms. Goruk’s activities.

Ms. Goruk performed her job well and the past four presidents of the Board expressed a high level of satisfaction with her knowledge, enthusiasm, and overall job performance. The employee had no issues during her employment until 18 months leading up to the date of termination, when a new member on the Board detected a number of irregularities in the financial matters of the organization.

Following an investigation, the Chamber found that the employee had engaged in serious misconduct: she had forged a financial document provided by the bank, granted herself unauthorized vacation pay and an unauthorized pay raise, and awarded contracts to her children without following the Chamber’s bid process or disclosing the transactions to the Chamber’s auditor.

Ms. Goruk was immediately terminated for just cause following the conclusion of the investigation. Shortly after, she commenced an action for wrongful dismissal and additionally sought aggravated damages for mental suffering as well as punitive damages.

Decision

Ms. Goruk’s entire claim was dismissed. The ONSC found that none of the acts individually supported termination for cause, but the culmination of the incidents established just cause for the employee’s dismissal. The ONSC held that the seriousness of the employee’s misconduct was heightened by the fact that, as the Chamber’s Executive Director, she was a fiduciary, and thus owed the employer a heightened duty of loyalty, honesty, and good faith than that of a regular employee.

The ONSC emphasized that the employer relied on the employee’s honesty and integrity in performing her duties and emphasized that the employee could not continue the role if the employer had reason not to trust her.

Further, the ONSC found that it was unnecessary for the employer to provide warnings or to implement progressive discipline given that all the issues that led to the termination came to a head at or around the same time period. They cumulatively amounted to a repudiation of the employment contract.

Takeaways

In most cases, progressive discipline and/or prior warnings are still required. However, if an employee engages in several incidents of misconduct in a short period of time, the lack of prior discipline may not be critical to upholding termination for cause.

Goruk highlights the enhanced duties that fiduciary employees owe their employers, and how this can serve as an aggravating factor justifying a for-cause dismissal.

Given the serious consequences of dismissal for cause, the law is clear that termination for cause must be a proportionate response to the conduct at issue. A fair and comprehensive workplace investigation process allows employers to demonstrate that they have reviewed the conduct and surrounding circumstances, including any relevant response from the employee that may explain the conduct.

The ONSC’s decision in Goruk does not change the fact that the threshold for terminating employment for cause is extremely high. Because a for-cause termination has the potential to impact an employee’s re-employability, it is also more likely to be challenged in court by the dismissed employee. Employers should carefully weigh their options when considering whether to take a position of just cause at termination.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.

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