In Reichard v. Kuntz Electroplating Inc. the Ontario Superior Court of Justice held that an employer may terminate a manager for cause if the manager’s conduct has caused the employer to doubt the manager’s trust, integrity and honesty required at the workplace.
Background
In 2003, the employee, Mr. Reichard, who held a management position with the Employer, began an affair with a co-worker, Ms. Thompson, who, at the time, did not directly report to Mr. Reichard. This affair, which lasted from 2003 to 2008, was kept secret from the Employer.
In 2005, the Employer implemented a non-fraternization policy at the workplace, which required all employees involved in a romantic relationship to notify their immediate supervisors. Additionally, the policy indicated that “failure to report such relationships may lead to disciplinary action, up to and including dismissal. The primary onus of reporting lies with the employee occupying the position of power or having the status advantage.” Therefore, based on the terms of the policy, the onus was on Mr. Reichard to report his relationship to the Employer.
After the implementation of the above policy, on a number of occasions, Mr. Reichard’s superiors inquired as to whether he was having a romantic relationship with Ms. Thompson. Each time Mr. Reichard denied that such a relationship existed.
In 2008, the Employer became aware of Mr. Reichard’s affair with Ms. Thompson, who was then reporting directly to Mr. Reichard. The Employer confronted Mr. Reichard about the affair, and Mr. Reichard admitted to its occurrence. The Employer immediately suspended Mr. Reichard and informed him not to return to the workplace until he was contacted by the Employer. Despite the Employer’s instructions, Mr. Reichard returned to the workplace twice.
As a result of Mr. Reichard’s actions above, the Employer terminated Mr. Reichard for cause. Mr. Reichard subsequently brought an action for wrongful dismissal.
Ontario Superior Court of Justice’s Decision
The Court determined that the Employer was justified in terminating Mr. Reichard for cause. In reaching this decision, the Court stated the following:
“To continue his romantic affair with his direct subordinate without reporting it, to continually deny the affair to his employer, to take extended lunches frequently and flagrantly with Ms. Thompson in front of others in his department, obviously a breach of the company lunch hour limit policy, to recommend Ms. Thompson for a transfer to his department where she would be under his direct control, to give flowing work related reports in relation to Ms. Thompson at informal meetings with his superiors and while under suspension to twice disobeyed orders to stay away from the plant, paints the picture of an employee who [the Employer] had every right to no longer trust.”
“[The Employer] had every right to consider that Reichard’s willful misconduct seriously called into question the trust, integrity and honesty required for him to perform his duties as a manager and that [the Employer’s] lack of trust in Reichard was sufficient to terminate him for cause.”
Points of Interest
It is usually difficult for employers to be able to demonstrate that there was sufficient justification to terminate an employee for cause. Given the ramifications of such a termination, being that the employee is not entitled to any form of notice of termination or pay in lieu of such notice, the Courts will always analyze terminations for cause with a fine tooth comb so that an employee is not inappropriately barred from notice.
Nevertheless, in the right circumstances, as demonstrated above, the Courts will uphold an employer’s decision to terminate an employee for cause. The difficulty for both employees and employers is to know when such a termination is justified. The above case demonstrates at least one situation where the Courts may find that a termination for cause is validated.
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