Williams HR Law LLP

EMPLOYERS TO TREAD CAREFULLY IN ADDRESSING INCIDENTS OF WORKPLACE MISCONDUCT

September 29, 2022

In Cho v Café La Foret [Cho], the Supreme Court of British Columbia (“BCSC”) found that although an employee did abuse his authority and engaged in harassment, he was wrongfully dismissed—not for the misconduct, but for refusing to sign a self-incriminating affidavit.

As a result, in addition to a reasonable notice award, the BCSC ordered the employer to pay $25,000 in aggravated and punitive damages for making the employee’s continued employment conditional on him signing the affidavit, which would have placed him in legal jeopardy outside of the employment sphere.

Background

The employee, Mr. Cho, was 60 years old and worked on and off as the employer’s head baker for a few years. Mr. Cho was alleged to have inappropriately touched a subordinate employee on two occasions—on one occasion, a brief, light tap on her shoulder and an open hand pat to her upper back, and on the other occasion, a light tap on the buttock area.

The employer conducted an internal investigation and found, by Mr. Cho’s admission, that certain alleged conduct did occur. Mr. Cho agreed to apologize to the complainant; however, the complainant intended to report the incidents to the police and wanted a written letter from Mr. Cho admitting to committing the misconduct.

The employer had its corporate secretary, who had previously been a lawyer, prepare the apology letter in the form of an affidavit. The affidavit was written in English rather than Korean, Mr. Cho’s preferred language. Included in the affidavit was language that made Mr. Cho out to be a sexual offender, as well as statements that he would not be in contact with any female employees.

Mr. Cho did not sign the affidavit. As a result, the employer dismissed Mr. Cho and refused to issue his record of employment (“ROE”) until he signed the affidavit.

The Decision

The BCSC held that Mr. Cho was wrongfully dismissed as there was no just cause. While his touching constituted harassment and he abused his authority as the complainant’s superior, the sexual harassment was “relatively minor” and in the context of his employment, did not justify dismissing him for cause. In any event, the employer did not dismiss Mr. Cho for the misconduct—it dismissed him for refusing to sign the affidavit.

The BCSC noted that the employer’s actions demonstrated it did not consider the touching to be “sufficiently serious to justify termination”. Specifically, by offering Mr. Cho continued employment if he signed the affidavit, the employer regarded the employment relationship as salvageable after the misconduct occurred.

The affidavit’s purpose was also found to be outside of the scope of Mr. Cho’s employment. In fact, the complainant intended to use the affidavit to support her endeavor to press criminal charges against Mr. Cho. Ultimately, the employer had provided him with an ultimatum—sign this incriminating affidavit or lose your job.

As such, Mr. Cho’s dismissal was not tied to his misconduct, but to his refusal in signing an affidavit that would have placed him in legal jeopardy outside of the employment sphere.

Further, the BCSC noted that Mr. Cho’s employment relationship required the employer to provide him with a warning or an opportunity to respond, and the employer provided neither.

While the BCSC found that a five-month notice period was reasonable in the circumstances, Mr. Cho’s failure to mitigate reduced his award to $15,600—a two-month notice period. The employer’s “wholly inappropriate” conduct regarding the affidavit attracted a further $25,000 in aggravated and punitive damages.

Takeaways for Employers

Employers must tread carefully and consider the consequences with respect to how they choose to proceed in respect of the employment relationship after misconduct is discovered. If an employer does not pursue dismissal following an employee’s misconduct, and instead tries to resolve the issues and permit the employee to continue their employment, a court may infer that the employer viewed the employment relationship as salvageable and the misconduct as not sufficiently serious to justify termination.

Of course, employers should ensure they meet the high threshold of just cause before dismissing an employee for cause, as alleging cause where none exists can attract damages beyond damages for wrongful dismissal.

Although the Ontario Court of Appeal previously decided that a refusal to apologize for sexual harassment can result in an irreparable breakdown of the employment relationship and justify a dismissal for cause, the employer in Cho required the employee to go beyond an apology and to place himself in jeopardy for his criminal matter. Importantly, Mr. Cho had agreed to apologize to the complainant.

While not binding in Ontario, Calgary (City) v Canadian Union of Public Employees, Local 37 provides persuasive language around what constitutes sexual harassment.

Given the potential liabilities involved, employers should consider the consequences involved in responding to employee misconduct. Any misstep with respect to an employer’s treatment of misconduct can be fatal to its defence of a wrongful dismissal claim down the road.

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