In Render v ThyssenKrupp Elevator (Canada) Limited Group, the Ontario Court of Appeal clarified the threshold to establish wilful misconduct under the Ontario Employment Standards Act, 2000 (the “ESA” ) and provided guidance on how sexual harassment should be assessed in the workplace. Importantly, the Court found that while a single incident of inappropriate touching did not amount to wilful misconduct as it was not preplanned, the employee’s dismissal for cause was a proportionate response.
Some cases have created confusion by holding that even where just cause for dismissal exists, the employee was still entitled to statutory Termination Pay. That is because the common law refers to “just cause”, whereas statutes such as the ESA refer to “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer”. These are not necessarily the same thing and in some cases, like Render, just cause can exist without wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.
The employee was in a managerial role with 30 years of service with the employer. He slapped a female coworker on her buttocks and was dismissed for cause as a result of this single incident. The employee alleged wrongful dismissal.
The trial judge found that the incident caused a breakdown in the employment relationship that justified dismissal for cause, and denied him all common law and statutory entitlements. The trial judge also commented that this was “very serious and unacceptable conduct”:
“Whether the act was a sexual harassment, sexual assault or simply a common assault, the purpose seems to be the same: to assert dominance over Ms. Vieira and to demean and embarrass her in front of her colleagues. I am satisfied that the act of slapping Ms. Vieira’s buttocks was an act that attacked her dignity and self-respect. This type of conduct is unacceptable in today’s workplace”.
In assessing the contextual analysis as set out by the Supreme Court of Canada in McKinley v BC Tel, 2001 SCC 38, the trial judge found that the office culture was not a mitigating factor:
“Even in a joking environment there is a line that cannot be crossed, and that line includes physical touching without consent of a sexual and private part of someone’s body. There is no place for any conduct which could result in a person feeling demeaned or disrespected.”
The employee appealed. In particular, the employee disputed two of the trial judge’s factual findings: 1) that the employee’s contact with his co-worker was not accidental, and 2) that the employee’s remorse was not genuine (although he had apologized several times, the trial judge found that he did not appreciate the seriousness of his action or believe that it was sexual harassment). The employee also submitted that the trial judge erred in law in concluding that there was just cause. He argued that there was no breakdown in the employment relationship and the employer failed to consider other disciplinary measures prior to dismissal.
Further, the employee sought a finding that he was entitled to benefits under the ESA; this issue was not addressed by the trial judge. Finally, the employee also appealed the trial judge’s failure to award punitive damages for the independent actionable wrong arising from the respondent’s litigation conduct.
The Ontario Court of Appeal dismissed the employee’s appeal that there was no wrongful dismissal and the award of no punitive damages. However, the Court allowed the appeal with respect to the ESA entitlements.
Specifically, the Court agreed with the trial judge that the employer had just cause for dismissal. However, the Court found that the employee’s conduct did not amount to wilful misconduct under the ESA. Accordingly, the Court found that while the employee was not entitled to common law notice, he was entitled to Termination Pay under the ESA.
In finding that the conduct did not amount to wilful misconduct, the Court first reiterated the well-established principle that proving wilful misconduct is more onerous than just cause at common law. Second, the Court went one step further to effectively create another element needed to establish wilful misconduct: the misconduct must be preplanned and not just intentional. In this case, the Court found that the employee’s conduct occurred in the heat of the moment. As a result, although the employer had just cause to dismiss him, the employer failed to establish that there was wilful misconduct.
Interestingly, although just cause for dismissal is known as the capital punishment of employment law, the Court made it clear that the employer does not have a duty to consider alternative measures as long as “in the result, the disciplinary measure that was ultimately imposed was proportionate”.
This is a significant employment law decision.
First, this case introduces a new element needed to establish wilful misconduct: employers will now have to show an employee engaged in misconduct that was not only intentional, but also preplanned. This will make it harder for employers to establish wilful misconduct and will thus expose more employers to liability, as they will be obligated to provide employees with their ESA entitlements for conduct that falls short of wilful misconduct under the ESA.
In addition, both levels of court sent a clear message that inappropriate workplace atmospheres and sexual harassment will not be tolerated.
Finally, just cause for dismissal has a very high threshold and employers must engage in a contextual analysis. Employers would be wise to seek legal advice sooner than later, so that they have the expertise of an Employment Lawyer to guide them through the process prior to dismissal; this will allow them to minimize potential liability.
By Nadia Zaman