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Dishonesty in the Workplace

“Dishonesty not always cause for dismissal, Supreme Court of Canada concludes”.  This was the headline proclaimed in The Lawyers Weekly in the aftermath of McKinley v. B.C. Tel, a 7-0 decision written by Justice Iacobucci.  In a time where there seems to be more and more wrongful dismissal litigation, a headline like this is enough to send an employer over the edge.  Realistically however, the decision of the case is somewhat less harsh than the headline would seem to imply.

A simplified version of the facts is as follows; McKinley, a chartered accountant of 17 years, had taken a leave of absence from work due to health problems.  He indicated to his employer that he would be able to come back to work in a less stressful position however, such a position was never offered.  He was eventually terminated and subsequently brought a wrongful dismissal action.  The defence of the employer was that McKinley had deliberately withheld the fact that his physician had indicated that he could safely return to work in his old position if he went on a specific, high-risk medication.  McKinley denied that he had lied.

The trial judge took the position that first, one must determine whether the employee had in fact been dishonest and second, if so, was the dishonesty of a degree that was “incompatible with the employment relationship”.  The Court of Appeal on the other hand, took the approach that if there was dishonesty, then there was cause for dismissal, period. 

There are two distinct lines of cases in Canada regarding dishonesty in the workplace.  The first sets out that the circumstances of each situation must be considered, whereas the second seems to indicate that any degree of dishonesty constitutes cause for dismissal.  In making their decision, the Supreme Court of Canada considered both lines of cases and came to the conclusion that upon closer examination the divergence between the two was more apparent than real.  In all the cases where “dishonesty” was the cause for dismissal, the dishonesty in question was always of a serious nature, such as theft, misappropriation, or forgery.  As there are many ideas of what constitutes “dishonesty” the Court held that the appropriate approach is to consider the specific form of dishonesty in the context of each case.

This is good news for employees, as in the words of Justice Iacobucci, it “mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behavior with just cause for dismissal”.  This shouldn’t be construed as giving employees free reign to act in any manner they choose, rather it is simply a mechanism to try and deal with the inherent power imbalance between employer and employee.  In fact, Justice Iacobucci also mentions that simply because certain dishonest behavior doesn’t warrant dismissal, it doesn’t mean that lesser forms of punishment shouldn’t be imposed.

On it’s face, the decision of McKinley v. B.C. Tel may seem to stand for the proposition that an employee can lie and get away with it however, the bottom line is that the appropriate approach to dishonesty in the workplace is one based on the principle of proportionality.  There must be an effective balance struck between the severity of an employee’s misconduct and the punishment imposed.  So basically, the punishment should fit the crime!

By Danielle Gubbe
May 1, 2002