In Winfield v. Pattison Sign Group (“Winfield”), the Court of Queen’s Bench of Alberta determined that an employee should not have been terminated for cause after 24 years of service after it was discovered that a missing cheque had been deposited by the employee’s common law partner into the couple’s joint account.
The Employee was a 55 year old commissioned sales representative who had been employed with the company for 24 years without any incident. Shortly before termination, the Employee had been recognized with a bonus for his overall performance and achieving sales exceeding $34,000,000.00 during his years of service. The Employee received the bulk of his earnings by direct deposit, although he was always reimbursed for business expenses incurred in the performance of his duties by cheque. These cheques would be left by the Employer on the Employee’s desk in an envelope. One day a cheque made payable to the company’s Edmonton office where the Employee worked was mistakenly left on the Employee’s desk. The Employee assumed the cheque was to reimburse him for his business expenses and did not notice that the cheque was not issued to him. The Employee took the cheque home and left it for his partner to deposit into their joint account as she was responsible for their finances. When the Employer realized that the cheque was missing and investigated matters, the Employer discovered that the cheque had been deposited by the Employee’s partner. When the Employer confronted the Employee, he confirmed that there was additional money in his account that was unaccounted for and tried to explain how the cheque was deposited into his personal account. The Employee also mentioned that he was entitled to outstanding business expenses and suggested that these be offset against the monies to be returned to the Employer. Without any further delay, the Employee repaid the monies to the Employer. The Employer investigated the Employee’s prior expense reports and found no errors. The Employer also reviewed the Employee’s comment that he was owed expenses and, being unable to verify this, believed the Employee to be lying. The Employer felt that the Employee could no longer be trusted and despite the Employee promptly repaying the monies to the Employer, he was terminated for cause due to the Employer’s belief that the Employee had either stolen money from the Employer when the cheque was deposited or was dishonest when confronted with the fact that the cheque had been deposited into his personal account. After termination it was discovered that expenses were owing to the Employee and that another cheque had been correctly issued to the Employee on the same day as the other cheque, which was likely forwarded to the Employee by the Employer in the same envelope as the other cheque by mistake.
At Trial Mr. Justice K.G. Nielsen determined that a series of errors, which included errors made by the Employer, had led to the Employer’s cheque being deposited into the Employee’s account. The Judge evaluated all of the circumstances, including the length of the Employee’s service and his good work record, and concluded that there was “no clear, cogent and convincing evidence establishing deceitful conduct on the part of Mr. Winfield on a balance of probabilities.” Accordingly, the Employer should not have terminated the employee for cause and the Judge determined that the Employee was properly entitled to 18 months notice.
Impact of Decision on Employers
Employers should make sure that they carefully review all of the facts and the broader context, including an employee’s work record and length of service, prior to making the decision to terminate an employee for cause. While improper conduct and dishonesty can in some instances justify the termination of an employee for cause and without notice, this will not always be the case. The alleged misconduct must be proportionate to the disciplinary measure that is imposed. It will likely be more difficult to terminate a long term employee who had a good work record for cause as these factors will add a broader context to the misconduct in question. Employers should always consult with experienced Employment Law Lawyers prior to making the decision to terminate an employee for cause.
Impact of Decision on Employees
Employees should be aware that a single incident of misconduct may not be enough for an employer to establish the existence of grounds to terminate an employee for cause. Further, if an employee has engaged in misconduct and is confronted by their employer, it is likely best for the employee to honestly admit to the misconduct as a failure to do so may demonstrate a level of dishonesty that may, in itself, justify the employee’s termination for cause due to a breakdown of the employment relationship and level of trust. It is always best for employees to consult with an experienced Employment Law Lawyer when misconduct is alleged to ensure that the situation is properly analysed and addressed to minimize the risk of the employee being terminated for cause.