Brenda Dennis worked as a security manager for the Ontario Lottery and Gaming Corporation (“OLGC”) for over 13 years. She was also a member of the employee social committee, and volunteered to arrange for discount tickets to Canada’s Wonderland for employees.

OLGC terminated Ms. Dennis’ employment on October 2, 2012 without cause.

On October 12, 2012, Ms. Dennis and OLGC agreed to the terms of a severance package, including severance payments for fifty-three weeks. Later on October 12, 2012, the Director of Human Resources sent an email to Ms. Dennis asking about the money Ms. Dennis had collected from the Wonderland ticket sales (the “Wonderland Funds”).  Ms. Dennis advised that the Wonderland Funds were in a safe at OLGC’s office. Ms. Dennis did not mention that a) there was a $1,000 shortfall in the Wonderland Funds; or b) that some of the funds were missing.

The tale of the missing Wonderland Funds is intriguing. In the summer of 2012, Ms. Dennis fell victim to an email scam. Over a period of just a few months, Ms. Dennis sent between $12,000 and $15,000 to scammers claiming to be from Nigeria who said they needed money.  Unsurprisingly, the scammers never repaid the money.  In addition to sending her personal funds, Ms. Dennis took $1,000 from the Wonderland Funds and sent it to the scammers.

When OLGC determined that there was a shortfall in the Wonderland Funds, it contacted the police. It also halted any 

“The employer has the burden of proof regarding just cause for termination.”

payments to Ms. Dennis pending the outcome of the investigation.

The police charged Ms. Dennis with theft of the Wonderland Funds, but on December 13, 2012, the Crown withdrew the charges. While she admitted to taking the funds, Ms. Dennis did not admit to theft, and, in fact, always maintained that she intended to repay the money before it was due. Indeed, she had reimbursed the OLGC’s social committee for the funds back in October.

Although the charges were withdrawn, the OLGC commenced an internal investigation and found that Ms. Dennis had “stolen” the Wonderland Funds.  On that basis, OLGC asserted that it had after- acquired cause to terminate Ms. Dennis’ employment and refused to pay the severance payments.

Ms. Dennis commenced an action in court to enforce the terms of the severance package.

The trial judge found that Ms. Dennis’ conduct did not constitute just cause to terminate her employment. He relied on the following facts:

  1. Ms. Dennis’ “stated intent throughout” to return the Wonderland Funds before they were due;
  2. The discount Wonderland ticket program was a volunteer opportunity and “not…part of her employment duties”; and
  3. OLGC had made improper findings in its internal investigation.

Specifically with respect to OLGC’s investigation report, Justice O’Marra found it “was superficial and inaccurate.” In particular, the conclusions of the OLGC report were based on the following untrue statements:

  1. Ms. Dennis “readily admitted to the theft of the missing social committee funds”; and
  2. “After an admission of guilt before the Court and restitution having been made the charge of theft under was withdrawn”.

Justice O’Marra held that it was “totally disproportionate for [OLGC] to view her conduct as support for termination with cause.” He ordered OLGC to pay the severance payments plus interest and  costs.

This case provides important take-home points for employers:

  1. Sometimes, a theft is not a theft

Theft requires proof of intent to steal. If there is no proof of such intent, the “taking of something without justification” does not equate to “theft”. Employers should be wary of using terms that import criminal or negative reputational meanings (such as“theft”) without clear proof.

  1. If you assume, you make an a** out of “u” and “me”

Investigation findings must be defensible. An employer cannot make assumptions about facts, including making incorrect deductions about the outcome of a criminal investigation. In Ms. Dennis’ case, the charges were withdrawn, and she made no admission of guilt. The conclusions of a report are invalidated if they are based on incorrect facts. If conclusions are not sound, a judge will be quick to censure, which may result in a costly lesson to the employer. Employers should also provide employees with an opportunity to respond to allegations, particularly serious allegations.

  1. No crime necessary

It is important to note that in the Dennis case, the fact that the Crown withdrew the charges does not dispose of the workplace issue. There are many reasons that charges may be withdrawn.While an employee may not be held criminally liable for his or her actions, he or she may still be civilly liable because of the lower standard of proof in civil matters (i.e. “beyond a reasonable doubt” vs. “on a balance of probabilities”). An employee does not need to commit a crime in order to be fired for cause. Lesser acts of dishonesty may be sufficient.

  1. Tread lightly when asserting cause

The employer has the burden of proof regarding just cause for termination. Termination for cause has been described as “capital punishment” in the employment context. Particularly where there is an allegation of dishonesty or stealing, courts have held that the onus on the employer should be “higher than the usual civil standard of balance of probabilities having regard to the gravity of the consequences of proof of such an allegation.”

  1. Tread even more lightly when asserting cause post-termination

An employer may terminate an employee without cause and then, based on information discovered post-termination, change its position and allege that there is after-acquired cause to terminate. However, post-termination allegations of cause will be subject to greater scrutiny than regular cause allegations.