The British Columbia Court of Appeal recently released a decision that will be of interest to employers who find information on a former employee AFTER they have terminated without cause. In this case, after a former employee returned the company cell phone, the employer discovered a series of text messages, many occurring during work hours, relating to purchasing illegal drugs from an employee he supervised as well as other people.  The following is a summary of the decision in Van den Boogaard v. Vancouver Pile Driving Ltd. 2014 BCCA 168 (CanLII).

What happened?

Mr. Van den Boogaard (“Mr. B.”), a senior manager with slightly more than one years’ service, sued his former employer after his “without cause” dismissal. Mr. B had been responsible for the safety of a job site in a high risk, safety-sensitive, heavily regulated industry. His core duties were workplace safety, safety training and enforcement of drug and alcohol policies. In this role he participated in creating a core value statement for the employer and created safety policies for the company. At the time of dismissal he was paid four weeks’ pay in lieu of notice.

After the dismissal, Mr. B returned his company cell phone. At that time, the company discovered he was using the phone to purchase drugs, primarily, Dexedrine and clonazepam both of which are listed substances under the Controlled Drugs and Substances Act. Mr. B admitted that he used the company cell phone to acquire illegal drugs, but claimed that he would have been on breaks or off the worksite when he sent text messages.

What did the Trial Judge do?

The trial judge found that the evidence amounted to cause and dismissed Mr. B’s action.  Mr. B appealed claiming that the trial judge failed to take a ‘contextual approach’ (remember the McKinley test for misconduct) and made findings that were not supported by the evidence.

What did the Court of Appeal do?

It too dismissed Mr. B’s appeal and here’s why.

  1. Contextual Analysis

The trial judge had said the test for cause for dismissal is:

…behaviour that, viewed in all the circumstances, is seriously incompatible with the employee’s duties, conduct which goes to the root of the contract and fundamentally strikes at the employment relationship.

Mr. B argued that this was a “strict and inflexible approach”.  The Court of Appeal found that, although the trial judge’s reasons were brief, he considered the circumstances of the misconduct: Mr. B’s job description, the nature of the work, and the fact that the Mr. B admitted that he committed a criminal offence by purchasing drugs. He found that Mr. B was a manager at a dangerous job site; was supposed to set a good example for other employees; and bought drugs from a direct subordinate.

The Court of Appeal found no error in law on the part of the trial judge and that he had properly applied the contextual approach from McKinley saying that the “weight given by the trial judge to particular matters” was an exercise of his discretion.

  1. Palpable and overriding error in finding just cause?

Mr. B argued that the trial judge upheld the termination based on finding a “conflict of interest” and that this was neither pleaded nor reasonably supported by the evidence. He claimed that there was no evidence that his actions actually had an impact on workplace safety or that any misconduct occurred during working hours.  The Court of Appeal distinguished the cases Mr. B relied on in his arguments saying:

[32]      However, I do not think these cases stand for the broad principle Mr. Van den Boogaard urges this Court to adopt. Mr. Van den Boogaard is effectively asking this Court to overlook the gravity of his admitted actions because Vancouver Pile Driving failed to provide an affidavit expressly stating that, if it had known he was using a company phone during working hours to purchase illegal drugs from his subordinate, the company would have terminated him. Such subjective evidence is not required; the test from McKinley as to whether conduct amounts to misconduct has an objective element. As succinctly stated in Lewis v. M3 Steel (Kamloops) Ltd., 2006 BCSC 681:

[25]      The test for just cause for summary dismissal is an objective one: is the misconduct something a reasonable employer could not be expected to overlook, having regard to the nature and circumstances of the employment? Can the employment relationship viably subsist? … In other words, did the misconduct violate an essential condition of the employment contract, breach the faith inherent to the work relationship, or was it fundamentally or directly inconsistent with Mr. Lewis’ obligations…

The Court of Appeal then reviewed after acquired cause cases and concluded:

[34]      Regardless of whether dismissal for after-acquired cause or for cause is being argued, the issue is whether the employer can establish that, at the time of dismissal, there were facts sufficient in law to warrant a dismissal. If an employer knew of the misconduct and had expressly or implicitly condoned it, then claims of after-acquired cause will be defeated.

What does this mean to you?

This is a useful decision for employers. Conduct that is incompatible with an employee’s duties and that goes to the root of the employment contract, fundamentally strikes at the employment relationship. In this case, that conduct was not discovered until after the employment was terminated on a “without cause” basis by the employer. The conduct was only discovered when the former employee returned company equipment with that information on it. Generally speaking, employees in higher level company roles (i.e., management level) will be held to a higher standard than employees in lower level roles. In this case, illegal drug transaction communications by a manager responsible for enforcing drug policies and who had participated in developing such policies was found to be conduct that was incompatible with his duties and the employer successfully established that at the time of dismissal, there were actually facts sufficient to warrant dismissal.

The decision is a good reminder for employers to not only insist on employee’s returning company owned equipment at the time of termination, but to also consider reviewing information stored on that equipment to determine whether there are liabilities or risks lurking in the data. What you find might surprise you.