When criminal charges have been laid against an employee, the sheer existence of a criminal investigation can attract a lot of unwanted attention.
This may be seen as bad for business. As a result, an employer may believe that the employer has the right to end the employment relationship and terminate the employee.
However, decisions rendered by Canadian courts reveal that an employer will not be automatically entitled to terminate an employee in these circumstances. In fact, termination may not even be justified if the employee is found a guilty of a crime or convicted.
Simply stated, criminal charges alone cannot justify termination.
Courts have noted that determining whether or not termination of an employee is justified involves balancing the interests of an employer’s business against an employee’s ability to earn a living.
When criminal charges have been laid against an employee, the general question that is asked is whether the employee’s conduct is so related to the employment relationship that the employer is facing immediate risk to its business interests. Employee misconduct should not be assumed on account of the mere existence of the charges; being able to show actual misconduct may require independent investigation on the part of an employer.
When the charges arise out of a situation that took place outside of the workplace when the employee was off duty or do not involve parties that are in any way connected to the employer, an employer must exercise additional care when contemplating termination because in such circumstances it is generally more difficult to demonstrate to a civil court that termination is justified. In fact, putting the employee on leave pending conclusion of criminal proceedings may not even be justified in such circumstances.
Termination of an employee may be justified in the following circumstances:
- The employer has shown that the employee’s conduct harms the employer’s reputation;
- The employer has shown that the employee’s conduct renders the employee unable to perform his or her duties;
- The employer has shown that the employee’s conduct has resulted in refusal or reluctance on the part of other employees to work with him or her;
- The employer has shown that the employee’s conduct interferes with the safe and proper conduct of business of the employer;
- The employee has been convicted of an egregious criminal offense which is considered harmful to the general reputation of the employer.
Canadian courts have approved employer responses designed to protect an employer’s business reputation when such responses were considered to be reasonable. It appears that courts are more inclined to approve an employer’s response when the employee in question is a manager, professional, senior employee or employee in high position of trust.
However, as previously noted, an employer cannot simply conclude that the charges against the employee themselves have harmed the employer’s reputation. Rather, taking action to protect business reputation requires an employer to substantiate the argument that the action taken, including termination was justified and failing to adduce evidence to substantiate the argument can be fatal to an employer’s case should the employee pursue a claim for wrongful dismissal.
This is what occurred in the 2016 case of Merritt v. Tigercat Industries, 2016 ONSC 1214 (CanLII) wherein the Ontario Superior Court of Justice considered a case involving a labourer who had been charged with two counts of sexual assault against minors. The employer had asked the employee about the criminal proceedings and the employee failed to provide information, which the Court noted was within the employee’s rights. The employer baldly alleged that the charges against its employee damaged the employer’s reputation. The Court was not prepared to accept that there was reputational damage without evidence and concluded that termination was not justified on that basis.
If your employee has been charged with a crime or is accused of egregious misconduct and you require assistance in determining how to proceed, please contact one of Key Murray Law’s lawyers who practise Employment and Labour Law.
Bobbi-Jo Dow Baker
Legal information appearing in this article and elsewhere on Key Murray Law’s website is intended for informational purposes only and is not intended to substitute for or replace any legal or other professional advice. If you have specific concerns or a situation in which you require legal advice, you should consult directly with one of our lawyers.