Written by Daniel Standing LL.B., Editor, First Reference
From fried chicken to money scams, 2023 NSLB 76 (CanLII) has it all. Though it has some unusual components, the case of wrongful dismissal provides employers with good advice about choosing a penalty that fits an employee’s “crime,” and it illustrates how critical it is to fully investigate alleged wrongdoing before terminating someone’s employment.
The case arose at an east coast fried chicken restaurant. The employee started there in 2018 as a cashier and over three years became a supervisor and then store manager. When she first started, she signed an agreement acknowledging she had $200 in her cash drawer and that she was responsible for money coming into her “float” during her shifts, and that her float would be balanced and accounted for at the end of her shifts.
One day in September 2021 while at work, the phone rang. Her colleague handed it to her, saying it was head office calling. The caller said a new security system was being delivered that day and that $2,500 remained owing on the invoice because the credit card that was used was declined. The caller gave her instructions to send the $2,500 by international money gram to a bitcoin machine. The caller remained on the line while the employee carried out the instructions, including a direction to destroy the evidence. She used the company’s money.
Then it dawned on the employee that she’d been scammed. There was nothing the police could do, and her boss told her to pay back the money or she’d be fired. She did it, but it was a financial hardship for her.
A month later, she got into a spat over scheduling with the same colleague who handed her the phone previously. The employee threw the pen and paper she was holding. She said the pen hit a nearby table, while the colleague said the pen hit him, and that she’d acted in a similar way in the past. She had no disciplinary record.
When the owner found out, he talked to the colleague and a witness, but did not review the store’s video surveillance or talk to the employee herself before deciding to dismiss her, which he did in person for “threatening and harassing behaviour.” He said he based his decision on the workplace harassment policy.
The employee filed a labour standards complaint mentioning both her termination and the money scam, claiming she’d been wrongfully terminated. Labour Standards investigated and concluded the termination was without cause and without notice, ordering the company to pay her $2,500 in pay protection and about $1,600 in lieu of notice of termination.
The labour board’s decision
After determining it had jurisdiction, the board first considered the $2,500 pay protection award.
The pay protection provision of the Labour Standards Code prohibits an employer from deducting money from an employee’s pay “for the purpose of paying for a loss that occurs while the employee is working.” The board said that “loss” can mean many things, and a business loss is one interpretation. The Code provides an exception whereby employers can make these deductions if a court or statute allows it, or if it’s done pursuant to a written authorization.
Attention then turned to the float agreement and whether it counted as a written authorization. The board said it didn’t because the float agreement was “particular to a cashier’s responsibility for a float,” and that it wasn’t broad enough to cover the loss due to the scam.
The employee personally paid the $2,500 to the company-almost three weeks’ salary-because she thought she had no choice. The board said the employer’s “immediate repayment approach” was prohibited by the Code.
As for the termination, the board said that as a disciplinary measure, it must be proportionate to the misconduct. Under the Code, unless “wilful misconduct or disobedience or neglect of duty” is proven, pay in lieu of notice to terminate is required.
Losing her temper and throwing a pen was misconduct in the board’s view, but it didn’t accept that termination was a proportionate response for this one-off incident that didn’t meet the definition of harassment under the policy. There was no injury, and the company’s own policy warned of a range of possible outcomes, showing the employer’s responsibility to mete out discipline progressively in cases that aren’t extremely serious.
The board was also critical for the employer choosing not to interview the employee for her perspective or review the surveillance footage. This was enough for the board to conclude that the company failed to prove just cause to terminate without providing notice or pay in lieu, upholding the decision below.
It’s dangerous for an employer to act hastily when workplace wrongdoing occurs because oftentimes, steps get missed and the potential for a disproportionate penalty increases. A prudent approach would include having a solid knowledge of the threshold for “just cause” terminations under the applicable employment standards legislation, and only invoking that penalty for the most serious of offences, and certainly only after a thorough investigation is completed. Otherwise, employers risk reinstatement or financial penalties that could easily be avoided.