There is no dispute in Ontario that employers are permitted to apply reasonable rules and standards on employees in the workplace. They may discipline and fire employees, if appropriate steps by them are taken and there are proper grounds to do so, at law. Employees who break the rules or engage in serious misconduct in the workplace are subject to termination, for cause and without severance pay.

However, employees’ misconduct that takes place off-duty, on personal time or outside of the workplace, is a different issue entirely in Ontario law.

This includes, for example, conduct by an employee on social media, when the employer may feel the employee is acting inappropriately, or when an employee is charged with a criminal offence, such as impaired driving, domestic assault or even a less serious offence, such as theft or mischief.

Ontario Courts have addressed these questions and generally held that criminal charges for off-duty (alleged) misconduct, without more, are insufficient grounds to dismiss the employee for cause and without either notice or pay in lieu of notice.

For example, in a 2016 Ontario case, when the employee sued for wrongful termination as a result, the employer was ordered to pay damages equivalent to ten months’ wages ($42,000), plus costs.

Brief Facts:

The employee, 67, was employed as a general labourer. He worked mostly in southern Ontario.

Early in 2015, he was arrested at work and charged with two counts of sexual assault allegedly against minors. The employer met with the employee the following day and questioned him about this, but the employee refused to discuss the criminal charges and would only say that the alleged events did not occur in the workplace and did not involve any other employees.

The employer asked him to resign, but he would not. However, he agreed to take a two-week leave of absence.

When he came back to work, he was asked to work at a different facility of the employer. A female employee at that other facility then expressed concerns about working closely with the employee. She told the employer that the employee in question was a distant relative and that she in the past had visited with him with her own family. The female employee also alleged that she stopped visiting him because he made inappropriate sexual comments and advances towards her.

As a result, the employer met again with the employee. They brought these concerns by the female employee to his attention directly, including the employer’s concern that this female employee may be involved in the criminal allegations. The employee would only confirm that no other employees were involved in the criminal charges.

The employer, without undertaking any further investigation, internally or otherwise, terminated the employee, for cause, and paid no severance to him. The employee sued for wrongful termination.

The Law:

According to this case, for off-duty conduct to constitute proper cause for termination, there must be a justifiable nexus or connection between the off-duty conduct and the employer or the nature of employment.

The Court also confirmed that the onus is on the employer to demonstrate, on a balance of probabilities, that, for example:

  • the misconduct of the employee injures or harms the employer’s reputation or product;
  • the employee’s behaviour renders the employee unable to perform his or her duties satisfactorily;
  • the employee’s behaviour leads to refusal, reluctance or inability of the other employees to work with him or her;
  • the employee has been guilty of a serious breach of the Criminal Code, which renders his or her conduct injurious to the general reputation of the employer and its employees; and
  • continuing to employ the employee will cause difficulty in the way the employer properly carries out the function of efficiently managing its work and efficiently directing its work force.

Applying these factors based on the evidence, the employer lost on the cause issue and had to pay, including because:

  • it did not, or would not, suffer reputational harm, because the employee was considered a general labourer, not an executive, supervisor, or manager
  • the employee remained capable of performing his duties, as indicated by the fact that the employer re-assigned him to perform his duties at another of its facilities initially
  • No other employees were involved in the criminal charges and, if the female employee was, in fact, hesitant to work closely to the employee at issue, that was for reasons unrelated to the criminal charges and, therefore, the employer had a duty to accommodate both, to the point of undue hardship
  • the employee remained innocent until proved guilty, at law, and should benefit from Ontario’s presumption of innocence before the criminal trial was held
  • the employer’s re-assignment of him, after his initial two-week leave of absence, indicated that the employer’s continued employment of him did not prejudice the employer’s ability to manage its work and workforce

Summary and Lessons:  

This case emphasizes that employers should always, before terminating for cause, conduct fulsome and proper workplace investigations, including when off-duty misconduct is the issue. A proper investigation involves seeking and obtaining any relevant statements and evidence, properly documenting the evidence and the investigatory steps taken and giving the employee in question a reasonable opportunity to respond to the allegations, or so-called ‘due process’. If this is not done prior to termination, the employer clearly faces the risk of cause not being upheld by the Court.

If a proper investigation is done, employers should assess if the off-duty conduct justifies termination for cause, based on the factors set out above, or what other disciplinary step(s) may be more appropriate at the time, as part of progressive discipline.

Employers should always ensure progressive discipline steps are taken, unless the circumstances are severe enough to justify otherwise, and they should always make sure any disciplinary steps taken are reasonable, principled and consistent with the employer’s policies, including any workplace codes of conduct and off-duty workplace policies.

Other options? If there is serious concern, but possibly risk in establishing a cause, the employer could consider terminating the employee due to off-duty misconduct, but not on a ‘for cause’ basis, by providing adequate notice or pay in lieu of notice, subject to ensuring that the discipline taken, including the termination, does not offend the protected grounds enumerated in the Ontario Human Rights Code (or the federal Code, if applicable).

Helpful Case:

Merritt v. Tigercat Industries, 2016 ONSC 1214 (CanLII) 


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