When is a single, serious instance of misconduct just cause for termination, particularly for a long-service employee?
In Fernandes v. Peel Educational, the Ontario Superior Court of Justice and the Ontario Court of Appeal were both asked to determine if a teacher’s misconduct gave rise to just cause for termination. They came to very different conclusions.
The Facts
The plaintiff was a teacher with the defendant, which is a private school. The plaintiff had been employed for 10 years when terminated. Although there had been some performance issues, the plaintiff’s discipline and performance history was not a factor in the assessment by either court of just cause. Both courts treated the plaintiff’s record as relatively unblemished for the purposes of that analysis.
The plaintiff was dismissed as a result of the marks he submitted for his students’ interim report cards. Importantly, these marks were relatively unofficial, as the only marks that would actually be entered on the student’s record were ultimately the year end marks. Nonetheless, in respect of the interim marks, the plaintiff knowingly entered fabricated marks. He claimed that he intended to correct the marks prior to the release of the final report cards at the end of the year.
Other marks had also been entered late and incorrectly.
When confronted by the school, the plaintiff initially lied about how the marks were determined, although he ultimately confessed to the misconduct. He was dismissed immediately for just cause.
Interestingly, even though the school knew that the interim marks were inaccurate, they were released on the students’ interim report cards. The school claimed it did not have sufficient time to re-evaluate and amend the marks prior to issuing the interim report cards.
The Trial Decision (Ontario Superior Court of Justice)
The trial judge found that the misconduct was not sufficient to justify a summary dismissal.
Specifically, the Court found the fact that the school had knowingly sent out the flawed interim grades to students underscored that the misconduct was not serious. The Court reasoned that if the effect had been so severe, the delivery of the interim report cards would have been delayed.
In addition, the Court found that the misconduct, when considered in light of the Plaintiff’s service and positive record of employment, was not sufficient to warrant dismissal. The Court found that a formal warning, and additional misconduct, would be required before dismissal was justified.
The Court awarded 12 months’ notice to the employee. In later decisions, the Court awarded an additional $115,000 in disability benefits and $130,000 in court costs.
The school appealed to the Ontario Court of Appeal. The Court of Appeal reversed the Court’s decision, determining that there was just cause for the dismissal of the plaintiff.
The Court of Appeal was particularly concerned with the possible impact of the misconduct on the school. As an accredited private school, the defendant was subject to robust requirements insofar as the grading of students was concerned. A breach of those requirements would put the accreditation, and therefore the continued operation, of the school in jeopardy.
The fact that no ill consequences resulted from the plaintiff’s misconduct was not considered to be an important factor for the Court of Appeal. What was far more important was the magnitude of the potential harm to the employer, which was extreme. As a result, it weighed towards a finding of just cause.
In addition, the Court of Appeal was struck by the fact that the plaintiff had given no explanation for the misconduct. Although given a number of opportunities to explain himself, the plaintiff could not explain why he committed the acts.
The seriousness of the misconduct, combined with the lack of mitigation, struck at the heart of the employment relationship. The Court of Appeal concluded that the misconduct had made the employment relationship unsalvageable. As a result, there was just cause for dismissal.
The Court rescinded the trial judgment, and vacated all of the amounts awarded to the employee.
A dissenting justice upheld the trial court’s findings, holding that the majority was impermissibly “re-trying” the case. However, the majority opinion stood, and the case was dismissed.
What Employers Should Know
The determination of whether just cause exists for termination is a nuanced analysis that often resembles an art more than science. However, this case should be comforting to employers for two reasons.
First, where an employee engages in misconduct and dishonesty, it is compounded where no reason or explanation is offered by the employee. It is not clear whether a reason would have been sufficient mitigation to void just cause in this case. However, the lack thereof certainly did not assist the plaintiff, and supported the employer’s assertion of cause.
Second, the employer’s circumstances were critical in the determination of whether just cause existed. The risk in this case to the accreditation of the school was a critical factor in determining the severity of the misconduct. In fact, the Court of Appeal found that it was so important that by not considering it, the trial judge fell into reversible error. Employers should be encouraged that the potential risk to their interests created by employee misconduct will be considered in determining whether just cause for dismissal exists.
