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The courts are alright: Just cause alive and well in Canadian employment law

Firing a worker for cause isn’t easy in Canada, nor should it be. A just-cause dismissal is often called the “capital punishment” of employment law, as there is no harsher penalty in a work relationship than booting someone out the door without compensation or notice.

But a couple of recent rulings involving two Ontario employers show that, when warranted and properly investigated, firing a worker for cause won’t attract the ire of courts.

Costco and the deleted website

The first ruling involved a disgruntled worker at Costco Wholesale Canada’s head office. His workplace crime? He deleted a website that he built — not once, but twice — after finally being granted a transfer he was seeking.

The worker was an assistant buyer in the toy department, and had been with the company for about two decades. The man, who we’ll call RP, started his career at warehouse locations before being moved to head office. In 2012, he was temporarily promoted to the role of “buyer in training,” but returned to his old role about five months later.

RP felt that Costco had “forced the demotion” on him and he felt mistreated and abused. When another worker was promoted to the position of permanent buyer, he became angry. The new buyer, who was his boss, knew he was upset about this promotion but didn’t let it hinder their working relationship. His advice to RP was to “keep the passion but moderate the attitude.” RP himself noted he would show his frustration, swear and raise his voice.

RP took two medical leaves in 2014 and 2015. The first was due to a verbal altercation, and he returned to work without issue. During the second, he asked his doctor to recommend a transfer to another department at Costco. Though the HR director at Costco testified that transfers are rare at the company, and that RP did not follow the requisite process to do so, the company eventually decided to move him to the lawn and garden department.

Cloud-based website built on company time

In 2014, RP built a Google-cloud based website for the toys department that allowed staff to easily share files. It was a pet project for him, done during working hours, and there was no question the website was Costco property.

During RP’s first day in his new department, his former manager asked him for access to the website and to transfer ownership to him and another manager. The next morning, RP deleted the website. He said it was “infuriating that they would pull this stunt” and thought the ask was a revenge tactic or done out of spite.

He emailed his former boss and said he deleted the website because nobody in management had given him feedback on it and he had the impression nobody was interested in it. Management told RP they were “disappointed” and that he needs to check with his boss before removing something from the system that other people have the ability to use.

That elicited a response of “Wow!” from RP who said the site was for his own use and management was ignoring him and not giving him timely input. Costco was able to restore the website and, before the company could inform RP it had done so, he promptly deleted it again permanently.

He was fired as a result.

The court’s comments

“I find that the deliberate deletion of the website amounted to damage or destruction of Costco property and was contrary to the terms of the Employee Agreement,” the court said. It also took issue with RP’s response to management, calling it “insubordinate and disrespectful.”

“For example, (he) demanded ‘exactly how many times should I be asking for an update, can I not trust in my managers to be able to get back to me in a timely manner and not ignore my requests?’ (RP) stated that his managers ‘need to take some ownership and responsibility.’ He suggested that the recipients ‘need to review with your managers how to manage their workloads…I shouldn’t have to babysit.’” the court said.

For more information see Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013 (CanLII)

The case of the missing rugs

Another ruling out of Ontario focused in on a worker who stole two carpets and provided a bizarre explanation for his actions.

Video surveillance caught the employee at Toronto-based Multy Home, which manufactures and sells rugs, taking four carpets and loading them into the car of a colleague. His colleague had properly bought two of those rugs, but he had not. He told his colleague he had, in fact, purchased them. He drove his colleague’s car to the other end of the parking lot and transferred the two stolen rugs to his vehicle.

During the investigation, he told the company that he actually agreed to buy the carpets off the co-worker in exchange for a catered lunch of Caribbean pork. (He owned a part-time catering business.) But his colleague denied that, pointing out he was Hindu, would not have agreed to a meal of pork, nor did he know the man was a caterer on the side.

The court took issue with his lack of candour in failing to acknowledge he placed two of the carpets in his own vehicle. His account of events was “far-fetched, implied bizarre and dishonest conduct by another employee (and) failed to explain (his) lack of candour in his initial interview,” the court said.

It upheld the decision to fire the worker. For more information see Labourers’ International Union of North America, Local 183 v. Multy Home LP, 2023 ONSC 747 (CanLII).

Costs and lessons

In both cases, the courts awarded costs to the employer. That’s a significant part of the financial equation that is sometimes overlooked: Winning parties, generally speaking, are often entitled to recoup a portion of the legal costs they incurred in fighting the claim in court.

And it underscores the fact that serious acts of misbehavior by workers can justify dismissal for cause. In the Costco case, it was destruction of company property. In the Multy Homes case, it was theft and dishonesty.

Employers may breathe a sigh of relief at the outcomes in these two cases. But never forget the bar for just cause has been set very high for good reason, and not every “obvious” case will end in the employer’s favour.

Todd Humber is the senior editor for Talent Canada.