By James D. Kondopulos

Dishonesty on the part of an employee casts a dark shadow on the relationship with his or her employer and, depending always on the context, throws into serious question the ongoing viability of that relationship – especially if the dishonesty involves theft or is premeditated, intentional and sustained or repeated over a period of time.

In some industries and for specific jobs, honesty is of paramount importance and an employee’s dishonest conduct can result in summary termination of employment for just cause.

Indeed, as confirmed by a respected labour arbitrator in an award issued after a recent grievance arbitration, there is in an industry like the retail food industry a “presumptive rule” that an employee who is dishonest, regardless of whether the dishonesty involves theft, invites termination of his or her employment.

Background
The grievor in Sobeys West Inc. v. United Food and Commercial Workers, Local 1518 (Sidhu Grievance), [2016] B.C.C.A.A.A. No. 148 (Peltz) worked as a cashier at a grocery store in Vernon, British Columbia.  She requested a two-week vacation to open a small Indian restaurant.  Her request came at a very busy time for the store and, when her employer declined the request, the grievor called in sick and missed four shifts.  She went on to provide a medical note stating she was unfit to report to work and perform duties.

Meanwhile, however, the grievor worked at her new restaurant.  The employer found out and took the position that the grievor’s absence from work was improper and orchestrated to give her time to work at the restaurant. The employer said that the grievor occupied a position of trust in its store and breached clear, well-known company policy requiring honesty and integrity.  The employer relied on what it maintained was a presumption in the retail food industry that employee dishonesty warrants summary discharge from employment. In the employer’s view, the employment relationship was irreparably damaged and there was just cause for termination of the grievor’s employment.

At the time of her dismissal, the grievor had 20 years of service and a clean disciplinary record.

Arguments Made At Arbitration
At arbitration, a key argument which the grievor’s union made on her behalf was that the presumptive rule on which the employer relied only applied with respect to theft of cash or retail food product or other inventory. That, the union said, was the context within which the rule had historically developed and the context to which it had to be restricted. According to the union, the presumption could thus not apply in the grievor’s case.

The union also argued that an employee who is able to fulfil some but not all of his or her regular duties is entitled to take sick leave. In the grievor’s case, she would have had to interact with customers at the grocery store notwithstanding the fact she had asthma and trouble speaking. While she was legitimately sick, the grievor still wished to be present during the opening of her restaurant. In any event, she only performed limited tasks at the restaurant and rarely interacted with its customers. There was no evidence that the small amount of work she performed at the restaurant was inconsistent with her medical condition. There was no proof, the union said, of intent to commit fraud. There was no cause for discipline and termination of employment was an excessive disciplinary response in all of the circumstances.

Decision Of The Arbitrator
Reflecting on the totality of the medical evidence available at the hearing – evidence which had not previously been available to the employer because of how the grievor chose to conduct herself during the company investigation – Arbitrator Arne Peltz determined that the grievor did not dishonestly take sick leave for the purpose of working at her newly opened restaurant.

The arbitrator found that the grievor was unable to work for her employer at the grocery store during the time period in question.  As a cashier, she would have been expected to communicate verbally with customers and would have been unable to take rest breaks as required.  In contrast, at the restaurant, she only provided minimal assistance and took frequent breaks.

Nonetheless, Arbitrator Peltz held that the grievor had engaged in culpable misconduct and provided the employer with just cause for discipline.  During the period of time it mattered most, she had refused to provide her employer with relevant medical evidence as it had requested.  The employer was entitled to receive a fulsome, cogent explanation for the grievor’s absence from work.  Regardless of whether she had the right to take sick leave in the first place, her failure to be honest and forthcoming with her employer, and to generally cooperate and be responsive in the course of the company investigation, amounted to misconduct which gave her employer cause for serious discipline.

This was particularly so against the special backdrop of the Sobeys case.  As confirmed by the arbitrator’s clear rejection of the argument at the core of the union’s case, trust between an employee and his or her employer is absolutely critical in the retail food industry and the presumptive response to instances or incidents or of dishonesty in that industry is summary discharge for cause – regardless of whether the employee has actually engaged in theft.

Notwithstanding all of this, Arbitrator Peltz decided in the face of multiple, compelling factors to relieve against termination of the grievor’s employment.  He highlighted the grievor’s many years of good service and her sympathetic personal and family circumstances.  He also took the view that she had excellent rehabilitative potential and had in effect learned her lesson and was unlikely to repeat her misconduct in the future.  Confronted with these mitigating factors, the arbitrator exercised his discretion to substitute the termination with what he described to be “a substantial period of suspension”, a lengthy unpaid suspension of four months.

Takeaways for HR Professionals

1. Special presumptive rule. Honesty is the touchstone of the employment relationship.  In the retail food industry in particular and always dependent on the circumstances, dishonesty, including, without limitation, theft, invites termination of employment for just cause.

2. Employee’s long service. As Arbitrator Peltz explained, the grievor’s long service “cut both ways … since a senior employee should know her obligation to be honest at all times”.  Especially with respect to honesty, employers can hold employees with long service to a higher standard than those with short service.

3. Duty of fidelity and good faith. Employees have a duty of fidelity and good faith during an employer investigation.  As in the grievor’s case, discipline may be imposed for “obstructing the employer’s investigation or providing untrue information during the investigation” – irrespective of whether the employee is cleared of the initial charges of misconduct upon which the investigation was initiated in the first place.  An employee like the grievor has a positive duty to be honest and forthright with his or her employer and not to mislead the employer, be evasive or generally frustrate the investigation.

James D. Kondopulos, who was counsel for the employer in the Sobeys case, is a founding member and partner (practising through a law corporation) of Roper Greyell LLP.  He has been named by Lexpert as one of Canada’s leading lawyers under 40 and is ranked as a leading employment lawyer in the Canadian Legal Lexpert Directory.  He is also recognized as a leader in the area of employment and labour law in both Who’s Who Legal and Best Lawyers International, Canada.  James can be reached by email at jkondopulos@ropergreyell.com.  For more information about his practice and Roper Greyell, please visit www.ropergreyell.com.

While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein.  The article is for general information purposes only and does not constitute legal advice.