Introduction

When privacy and confidentiality are important in a job, a manager's breach of confidence may provide just cause for termination, particularly when the employer's policy on confidentiality obligations is known to the employee. The British Columbia Supreme Court affirmed these principles in Manak v Workers' Compensation Board of British Columbia (2018 BCSC 182) and highlighted the value of a properly executed release if the employee later challenges an agreement made at the time of termination.

Facts

Taranjeet Manak was terminated from her manager position at WorkSafeBC after 36 years of service for breaching the organisation's confidentiality standards. Manak was a client services manager and was also responsible for claims made by WorkSafeBC employees – a highly sensitive role. Additionally, Manak was an ethics adviser, serving as a resource for employees in all matters relating to ethical conduct and WorkSafeBC's standards of conduct.

An employee alleged that Manak was sharing confidential information with subordinates by:

  • disclosing details surrounding the termination of two employees before their termination;
  • discussing information regarding the claims of two employees; and
  • disclosing that an employee had threatened to report the handling of his unresolved claim to Global TV when his claim was disallowed.

Manak denied the allegations and WorkSafeBC suspended her while it investigated.

Another employee corroborated the allegations against Manak, who then admitted that she may have discussed the possibility of a claim being reported to Global TV in circumstances where the comments could have been overheard by staff. However, she denied the other allegations.

A few days later, Manak was terminated for just cause without severance pay. However, WorkSafeBC offered her the option of retiring and receiving a lump sum retirement benefit worth about four months' salary, in return for executing a release. She was given 24 hours to decide. Manak decided to take the package and sign the release.

Two months later, Manak sued WorkSafeBC for wrongful dismissal.

Decision

Manak argued that even if all the confidentiality breaches against her were proven, this conduct was not serious enough to constitute just cause for termination. She argued that she had no negative disciplinary history and there was no proof of actual harm stemming from the disclosure.

The British Columbia Supreme Court did not agree. In deciding that WorkSafeBC had just cause for termination, the court considered the key role of confidentiality in the organisation. Specifically, Manak knew that a breach of the confidentiality standards could lead to termination – hence her use of the phrase "I shouldn't be telling you this, but...".

The breaches were serious considering Manak's role as an ethics adviser and her responsibility for staff claims. The trust relationship between employer and manager was irreparable.

Manak also argued that the release she signed should be set aside on the ground of unconscionability. The court disagreed for the following reasons:

  • The settlement was not a grossly unfair and improvident transaction.
  • Although Manak failed to obtain independent legal advice, she advised WorkSafeBC that she had done so. She had the opportunity to seek legal advice and did not take it.
  • While there was an imbalance in bargaining power, Manak:
    • was a manager;
    • was aware of the nature of the dismissal process; and
    • had time to consider the circumstances.
  • Although Manak was given only 24 hours to decide whether to sign the release, this did not constitute being taken advantage of by WorkSafeBC.

Comment

Just cause Just cause for termination is a high standard, particularly for long-service employees. It is rare that a single incident will amount to just cause. However, this is the second time in three years that a British Columbia court has found that the breach of a confidentiality policy is just cause for termination of a long-service employee. The courts seem to take employees' confidentiality obligations seriously.

Execution of release Employees should receive time to consider a settlement offer and to seek independent legal advice. Employers should insist that an employee does not sign on the spot. The court in this case found that 24 hours was sufficient. However, employers should provide a longer period where possible, particularly where an employee is non-managerial and may be viewed by a court as vulnerable.

For further information on this topic please contact Matthew Larsen at Fasken by telephone (+1 604 631 3131) or email (mlarsen@fasken.com). The Fasken website can be accessed at www.fasken.com.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.