If the evidence is shaky, trying to turn a questionable case into a cause dismissal can backfire badly. Photo by Getty Images/iStockphoto

Article content

Most wrongful dismissal cases follow a well worn path. But every so often, a decision comes along that reminds employers just how dangerous it is to overstate a case for cause. The Ontario Superior Court’s recent ruling in Wilsher v. Olympic Wholesale is one such case.

Article content

Whether or not it survives appeal, the decision should make employers think twice before labelling misconduct as fraud, theft or just cause. Courts have long said that cause is an exceptionally high threshold. What is unusual here is how far the Court went in penalizing an employer that doggedly pursued it.

Article content

Article content

Article content

The plaintiff was a 55-year-old night shift supervisor with 17 years of service. He was dismissed for cause when the employer discovered he had adjusted timesheets to “top up” the hours of unionized warehouse employees who had worked fewer than 40 hours in a week. The employer treated the conduct as fraud and time theft.

Article content

Article content

The Court did not see it that way.

Article content

Justice S. Woodley found that the practice had been open and longstanding, that the plaintiff received no personal benefit and that the collective agreement guaranteed the employees a 40-hour workweek. In that context, the conduct did not amount to wilful misconduct and therefore did not justify dismissal for cause.

Article content

That finding alone would have left the employer in a difficult position. But the way it handled the dismissal made matters worse.

Article content

Rather than investigating whether the practice was systemic, the employer singled out the plaintiff. It subjected him to an intimidating interrogation without notice or representation (caution to employers who use outside investigators to do just that), accused him of fraud and theft in the termination letter, recorded his departure as a dismissal on his Record of Employment and refused to provide references after 17 years of service.

Article content

Article content

The Court found that this conduct humiliated Wilsher and damaged both his prospects of finding new work and his ability to obtain employment insurance benefits.

Article content

Article content

None of that is especially surprising. Courts regularly reject cause dismissals that fail to meet the very demanding legal standard of serious misconduct (usually after written warnings) and they often award additional damages where employers act in bad faith.

Article content

What surprised employment lawyers in this case was the remedy.

Article content

Since the Supreme Court of Canada’s 2008 decision in Honda Canada Inc. v. Keays, bad-faith conduct in the dismissal process has generally been compensated through aggravated or punitive damages, rather than the previous remedy of extending the employee’s notice period.

Article content

Before Honda, courts often increased reasonable notice to reflect an employer’s unfair conduct. That was known as the “Wallace bump,” after the Supreme Court’s 1997 decision in Wallace v. United Grain Growers. For nearly 20 years, the Honda approach of not increasing the notice period has prevailed.

Article content

Justice Woodley departed from it.