Williams HR Law LLP

An Employee Dismissed for Wilful Misconduct May Not Be Entitled to Participate in an Investigation into the Misconduct

October 9, 2024

In a recent decision, Max Aicher (North America) Limited v Richard Bell, 2024 CanLII 78929 (“Max Aicher”), the Ontario Labour Relations Board (the “OLRB” or “Board”) held that, where an employee is terminated for wilful misconduct, the employer does not owe them a duty of procedural fairness. In this case, the employer was not required to give the Employee an opportunity to participate or be heard in the employer’s investigation into the allegations of wilful misconduct made against him.

Background

Mr. Bell was an experienced roller who had worked for the employer, MANA, for many years processing steel billets into tempered steel rebar. One day he directed shutting off certain water pumps, contrary to production expectations and without telling the employee who was to relieve him for the night shift (and with whom he had a strained relationship), which he knew would cause significant damage. The issue could not be identified and remedied for several hours, resulting in $50,000 in lost production for the Employer.

Mr. Bell was sent home pending an investigation and was not interviewed as part of that process. While the internal investigator had attempted to interview Mr. Bell, he was insubordinate and not cooperative. The investigator determined that Mr. Bell had engaged in intentional sabotage and Mr. Bell’s employment was terminated for wilful misconduct.

Mr. Bell filed a claim for termination and severance pay. The Employment Standards Officer (the “ESO”) appointed to investigate the claim determined that MANA failed to provide Mr. Bell with procedural fairness when it did not give him an opportunity to respond to the allegations against him. The ESO found that Mr. Bell was therefore entitled to termination and severance pay.

MANA applied to the OLRB for a review of the decision.

OLRB Decision

The OLRB found that the employee did engage in willful misconduct when he attempted to sabotage production.

The Board further concluded that the Employment Standards Act, S.O. 2000, c. 41 (the “Act”), does not impose any duty of procedural fairness upon an employer when it is terminating an employee’s employment in reliance on their wilful misconduct, disobedience or wilful neglect of duty.

The Board cited several decisions including Nicholson v Haldimand-Norfolk (Regional) Police Commissioners, [1979] SCR 311, where the Supreme Court of Canada confirmed that an employer-employee relationship does not, per se, require application of principles of natural justice, such as procedural fairness. Further, the Supreme Court of Canada, citing the Ontario Superior Court of Justice in Filion v The Religious Hospitallers of St. Joseph of Cornwall, 2016 ONSC 1008, noted that “the question of ‘procedural fairness’ is not relevant to the issue of just cause” though it “may be significant to other issues such as general damages flowing from the unfair manner in which the employee was treated by the employer when summarily dismissal”.

As such, the Board found that, in this circumstance, MANA had no obligation to hear the employee out regarding his conduct. More specifically, the Board determined that “MANA’s failure to provide Bell with the opportunity to provide his explanation prior to terminating his employment does not deprive MANA of the ability to rely upon Bell’s misconduct in order to terminate his employment without termination pay or severance pay”.

Takeaways for Employers

Although, in this case, the employer was not required to give the employee an opportunity to respond to the allegations against him, employers should be wary about following suit.

Where there are allegations of wilful misconduct, disobedience or wilful neglect of duty (that is not trivial and has not been condoned by the employer), employers should tread carefully:

  • Whenever possible, it is prudent for employers to interview the employee who is alleged to have engaged in the conduct to ensure that there is evidence to support a finding of just cause. In Max Aicher, the Board found that there was, in fact, wilful misconduct; however, not all cases are as clear cut. It is also worth noting that, in this case, the employer seemingly conducted an otherwise thorough investigation, and attempted to engage Mr. Bell in the process, but he refused to participate.
  • Whether certain conduct will support a finding of just cause is very difficult to predict with any degree of certainty, since it is a heavily fact-driven inquiry and determined on a case-by-case basis. Wilful misconduct is an even higher threshold.
  • In terms of best practices in the investigation process, any investigator, internal or external, should first interview the complainant (or the employee who reported the incident). Then, after setting out the particularized allegations to the respondent-employee, that employee should be provided with a full and fair opportunity to respond to the allegations.
  • If an employer does not have the internal resources or know-how to conduct a thorough investigation, it should consider engaging an experienced external investigator to conduct the process. The investigator should be impartial and unbiased.
  • As was acknowledged by the OLRB through the cases relied on, while a failure to properly investigate does not mean that an employee who is found to have engaged in wilful misconduct will be entitled to termination pay or severance pay, failure to do so could result in damages related to allegations of unfair treatment in the manner of dismissal.

Where employers are making the decision to dismiss for cause (or wilful misconduct), they would be well advised to ensure that the fact gathering that led them to the decision is reliable and demonstrable in case the decision is challenged, and a workplace investigation appropriate in the circumstances is one of the most efficient ways to ensure that.

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

This information is not intended as legal advice.