In Dennis v. Ontario Lottery and Gaming Corp. the Ontario Superior Court of Justice enforced the terms of a termination without cause settlement between the employee and the employer despite the employer’s claim of termination for cause, based on after acquired information.
In October of 2012, after 13 years of employment, the employee was terminated without cause. She accepted the terms of a settlement package, which provided for, among other things, 53 weeks of salary in return for the employee signing a full and final employment release.
During the employee’s employment the employee assisted in the facilitation of discount tickets from Canada’s Wonderland offered to all employees. Specifically, Canada’s Wonderland offered discounted tickets, which the employee distributed to her co-workers. The employee was then required to submit the money received from her co-workers to Canada’s Wonderland in November of 2012. In August of 2012, the employee became subject to a fraud scam which resulted in her using over $1,000.00 of the money owed to Canada’s Wonderland for other purposes. The employee intended to repay the monies prior to having to remit the money to Canada’s Wonderland in November of 2012.
Following the employee’s termination and agreement to the settlement referred to above, the employer discovered the missing funds. The OPP became involved in the matter, interviewed the employee and charged her with theft and breach of trust. As a result of the criminal charge against the employee, the employer held the terms of settlement in abeyance until the criminal matter was resolved. On December 13, 2012, the Crown withdrew the charges against the employee, which the employer was made aware.
Thereafter, the employer conducted an internal investigation into the employee’s actions, and concluded the employee stole the money from the employer. Due to the conclusions of their investigation, the employer chose to advise the employee it would no longer adhere to the terms of the settlement due to having found cause to terminate the employee.
The Ontario Superior Court of Justice found “that it is totally disproportionate for [the employer] to view [the employee’s] conduct as support for termination with cause” and held the employee was entitled to the enforcement of the settlement agreement with the Employer. In reaching this decision, the Ontario Superior Court of Justice noted the following:
- there was no evidence of the employee inducing the employer to make the accepted settlement
- the employee “voluntarily assumed carriage of the arrangement wherein [the employer’s] employees could obtain Wonderland tickets at a discount”
- the selling of discount Wonderland tickets “was an unpaid function and was distinct from [the employee’s] employment relationship with [the employer]”
- the employee’s “role in selling discount Wonderland tickets to [the employer’s] staff was not part of her employment duties”
- the employee intended on repaying the amount
- the “cash related to the Wonderland tickets was not the property of [the employer]”
- the employee “never admitted to anyone that she had the requisite intent for theft” and the employer’s report stating there was “an admission of guilt before the Court” was “totally inaccurate”
Lessons for Employers
The above decision demonstrates the difficulty that can exist for employers in proving they are justified in terminating an employee’s employment for cause, especially in the context of information which is discovered after finalizing a settlement with the employee with respect to the termination of their employment. Accordingly, employers should obtain the assistance of Employment Law counsel so the employer’s options are explored prior to entering into terms of settlement and sufficient steps are taken in response to new information that comes to light.
Lessons for Employees
Employees should be aware of the above decision as it demonstrates issues which may arise following the termination of their employment without cause. Employees should obtain the assistance of Employment Law counsel in the event they are terminated.
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