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Unlucky or deserving? An employee’s dismissal was unjust, but reinstatement not appropriate

A small-town bank manager who had an affair with a subordinate—including sex in the bank, during and after hours—should not have been dismissed for cause, according to the Federal Court of Appeal. Nevertheless, given the circumstances, it was not appropriate to reinstate the employee to his job.

The manager was already under severe discipline for treating several female employees poorly. He was warned to avoid inappropriate behaviour or face termination, but he continued his affair regardless. The manager also shared confidential information with his paramour. When the relationship fell apart, the subordinate complained to the employer that the employee was stalking her, and the bank undertook an investigation. The manager initially denied the relationship, but later fessed up, and the employer terminated him shortly thereafter.

A federal labour adjudicator found that, despite being “dangerous, foolish and reckless,” the conduct was simply not serious enough to call for dismissal for cause. The relationship was consensual, the employee had not committed harassment and his actions caused negligible harm to the employer. Moreover, the employer had not followed a course of progressive discipline with respect to this conduct (notwithstanding the discipline he faced for previous inappropriate conduct) and had not given him the chance to correct his earlier behaviour. The adjudicator ordered a four-month suspension and reinstatement to his previous position.

The Federal Court reversed the decision, stating that the adjudicator had failed to consider the employee’s “conduct as a whole.” The employee had recently faced the employer’s most serious discipline shy of termination; that discipline was based on inappropriate conduct toward female subordinates; and the employee’s “reckless, foolish and dangerous” behaviour had incontrovertibly damaged the employer’s confidence in him.

The Federal Court of Appeal split the decisions. The adjudicator’s decision that the dismissal was unjust was reasonable, but the reinstatement was not. The Court of Appeal accepted that the adjudicator considered the broader context of the events, including the employee’s initial discipline and his position of power, and that the adjudicator did not give too much weight to the harm the employee caused by his actions.

Thus, the dismissal was unjust, but reinstatement was not the solution. The Appeal Court asked the employer and employee to determine the appropriate remedy.

It is difficult to draw a lesson from this case since another adjudicator might have come to a reasonable decision in favour of the employer, and the Appeal Court would likely have accepted it. Nonetheless, employers should note that it is crucial to follow a course of progressive discipline and to give employees the opportunity to ameliorate their behaviour. In addition, it is very difficult to know whether an employee’s conduct will be sufficient to justify dismissal without cause before a court or tribunal. Employers should always approach such circumstances with caution.

Read my full review on HRinfodesk.

Adam Gorley
First Reference Human Resources and Compliance Editor

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Adam Gorley

Adam Gorley is a copywriter, editor and researcher at First Reference. He contributes regularly to First Reference Talks, Inside Internal Controls and other First Reference publications. He writes about general HR issues, accessibility, privacy, technology in the workplace, accommodation, violence and harassment, internal controls and more. Read more
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