Steel v. Coast Capital Savings Credit Union

The British Columbia Court of Appeal recently found that a single act of dishonesty justified the summary dismissal of a long term employee with an otherwise clean disciplinary record.

Facts

Susan Steel was an employee of Coast Capital Savings Credit Union (“Coast Capital”) for 21 years.  As a Helpdesk Analyst, she provided internal technical support to employees at Coast Capital.  In this role, Ms. Steel was largely unsupervised in her daily functions and she was one of only a handful of employees that had complete access to every document and file on the employer’s computer system.

As a financial institution, privacy and confidentiality were of great importance to the employer, which was communicated to all employees.  The employer implemented policies requiring its employees to respect the privacy and confidentiality of all customer and staff information.  In addition, the employer’s internal privacy protocols included the assignment of personal folders to every employee where personal or private information could be stored. Helpdesk Analysts could access these folders, but only with the consent of the owner of the folder.

Ms. Steel accessed the personal file of a manager who was in charge of a waiting list for parking spaces that were highly sought after.  Ms. Steel accessed this file, without authorization, to determine when she may receive a parking spot.  Ms. Steel was caught when the manager tried to access this file, but was blocked because Ms. Steel had accessed it.  When confronted, Ms. Steel admitted to accessing the document without authorization.  Ms. Steel was dismissed for cause.  She sued Coast Capital for wrongful dismissal.  The British Columbia Supreme Court found in favour of the employer.  Ms. Steel appealed to the British Columbia Court of Appeal.

Decision

A majority of the Court of Appeal upheld the decision of the lower court.  The main issue on the appeal was whether the trial judge properly applied the contextual and proportional analysis that is well settled in the case law.  As part of this analysis, one factor that is relevant to a court’s determination is a lengthy period of unblemished service by the employee. Significantly, the majority held that a single act of misconduct can justify dismissal if the misconduct is such that it causes an irreparable breakdown in the employment relationship.  In this case, the court found that Ms. Steel’s conduct “… had breached the faith inherent to the work relationship, the result of which was that the relationship had irrevocably broken down.”    

In arriving at its decision, the Court noted that Ms. Steel occupied a position of trust and that her misconduct was contrary to her fundamental obligations as a Helpdesk Analyst. In these circumstances, the Court of Appeal found that it was open to the trial judge to find that the breach of the confidentiality policy and the failure to follow employer protocols resulted in a fundamental breakdown of the employment relationship.  Ultimately, the Court of Appeal agreed that the employer was justified in terminating Ms. Steel for cause, despite her more than 20 years of service.

Ms. Steel applied for leave to appeal to the Supreme Court of Canada, which was recently denied, finally concluding this case.

Commentary

Our courts will continue to apply a contextual and proportional approach in determining whether employee misconduct amounts to just cause.  Not every breach of employer policies will support the summary dismissal of an employee. However, this case serves as a reminder to employers of the importance of implementing and consistently enforcing workplace policies.

Central to the Court’s decision was the fact that the employer’s confidentiality and privacy policies were clearly drafted and that employees were aware of the importance of the policies.  When it came time to assert cause against Ms. Steel, the employer was in a good position to demonstrate that Ms. Steel was aware of the appropriate policy and protocols to follow, but she chose not to do so. 

Employers should be reminded that it is not enough to simply draft a workplace policy.  It is important that any policy clearly indicate that disciplinary action may be taken in response to any breach, up to and including dismissal for cause.  All policies must also be properly implemented and consistently enforced. Employers should provide training to employees and require that employees acknowledge receipt of the policy and that they have read and understood it.