In a recent decision, the Quebec Court of Appeal (PDF - available in French only) ruled that an employer did not abuse its management rights when it dismissed its executive director for unjustly accusing her immediate superior without first obtaining her version of the facts and when it asked her to undergo a psychiatric assessment.

The Facts

The executive director (the "Director") worked at the Coop Alentour for about eleven years. In the months before she was dismissed, she had expressed frustration and dissatisfaction regarding her incentive pay program to the Chair of the Board. At her request, the issue was included on the agenda and discussed during a meeting of the executive committee, but she was not satisfied with the outcome of this discussion. The next day, she wrote a message to all the Board members in which she accused the Chair of "inappropriate behaviour" and stated she no longer had confidence in him.

She then attempted to have the next Board meeting postponed on false grounds. When the meeting was held anyway, she refused to attend, citing medical reasons. She had not yet seen a doctor, but did so the day after the meeting. The medical certificate she received called for a leave of several weeks, but did not contain a diagnosis.

While she was on leave, several employees complained about past incidences of poor conduct and attitude, leading the employer to mandate a third-party investigation. The investigator gathered the employees' versions of the facts, but did not meet with the Director. His report simply recounted the employees' statements without drawing conclusions or making recommendations.

When the Director was ready to return to work, the employer informed her that she was now suspended without pay pending the results of the investigation. He also requested that she undergo a medical exam. The employer sought to determine whether her erratic behavior over the last months could have a medical explanation. He also wanted to find out if she was fit enough to handle a decision to dismiss her.

Upon completion of the investigation, the Director was dismissed on grounds of disloyalty and disrespect toward the Chair (i.e. the letter to the Board), as well as her attempt to have the Board meeting cancelled on false grounds.

The Director brought suit against the Coop claiming damages for dismissal without cause. She also sought punitive damages, claiming that the employer had abused its rights by failing to gather her version of the facts during the investigation and by requiring her to undergo a medical assessment.

The Superior Court Ruling

The Superior Court of Quebec (PDF - available in French only) found that the Director's conduct justified her dismissal, ruling that her letter to the Board members constituted an unfounded accusation and an unjustified attack against the Chair that had breached the bond of trust with her employer.

The Court also found that neither the manner in which the investigation was conducted nor the request to undergo a medical assessment were abusive.

The case was dismissed and the Director appealed the decision.

The Court of Appeal Ruling

The Court of Appeal upheld the lower court's findings, ruling that there was cause for the dismissal: the Director had been disloyal and disrespectful toward the Chair and toward her employer.

The Court ruled that the investigation had been of a disciplinary nature, and was intended to gather the Director's colleagues' versions of the facts. It ruled that this type of investigation was fully within the employer's management rights and was not subject to the rules of procedural fairness. The employer was therefore under no obligation to obtain the Director's own statement before dismissing her.

The Court also found that the medical assessment request constituted a necessary invasion of the Director's privacy that was as respectful and minimal as possible given the circumstances.

Lessons Learned 

Gross insubordination, disloyalty, and serious errors of judgement usually constitute grounds for dismissal. However, before proceeding with such a dismissal, employers must carefully consider all the facts and circumstances in order to ensure that they can objectively demonstrate that the bond of trust has been irreparably breached.

This case also teaches that, depending on the investigation type, it may not be necessary to obtain the investigated employee's own version of the facts. However, while the disciplinary investigation in this case was not subject to the rules of procedural fairness, this would not be the case if the duty to investigate arises from legal obligations, such as in cases of harassment.