In a recent case called Lagala v. Patene Building Supplies Ltd, 2024 ONSC 253, the court dismissed an employee’s wrongful dismissal claim. The decision is notable for a few important reasons, most importantly of which is for illustrating the standard the courts follow to establish just cause for dismissal.
What happened?
The worker was employed as a Health, Safety, and Training Manager for Patene Building Supplies Ltd., where her duties and responsibilities included ensuring that the employer fulfilled its requirements under the Workplace Safety and Insurance Act, 1997; that the employer had an effective system to certify that all accidents and incidents were properly investigated; establishing appropriate policies and procedures to minimize accident costs, including WSIB claims and administration; and establishing company policies in respect of WSIB reporting, and the reporting of injuries and accidents.
She had been in that role for more than 13 years when her employment was terminated for cause on December 18, 2019. The reason the employer chose to terminate alleging just cause for dismissal was because she submitted an employer’s claim form (Form 7) to the WSIB on her own behalf alleging that she was injured at work. Specifically, she claimed that she fell in the employer’s parking lot but did not report this to her supervisors until about 6 months afterward. Instead, she started a WSIB claim for herself by completing a Form 7 and submitting it to WSIB without notifying her employer, which resulted in her receiving physiotherapy benefits.
Additionally, the employee asked another supervisor to “sign off” on the Form 7 by dictating to him what she wanted the e-mail to say. This then came to the attention of the company’s President, who conducted an investigation and, based on the results and employee’s failure to admit the truth, determined that he had lost trust in the employee (despite the employee not having any previous disciplinary record and was part of management). As a result, he terminated her employment for cause on December 18, 2019 without a severance package, which resulted in the wrongful dismissal lawsuit.
Results of Wrongful Dismissal Claim
The Court found the employer had grounds to have lost confidence in the employment relationship and to therefore terminate that relationship without providing reasonable notice. The employer was not required to pay any damages to the dismissed employee (and its own counterclaim for an alleged unpaid loan was dismissed).
Why did the court reach this conclusion that the employer had just cause for dismissal?
The court found that the employee’s actions, including failing to report a workplace injury promptly and being dishonest about it later, constituted a “continuing pattern” that breached her trust with the employer. Specifically, the court focused on the following points:
- Employee’s misconduct: she was responsible for managing the employer’s health and safety policies yet failed to her own work-related injury promptly, potentially putting the employer at risk of legal trouble. Additionally, her failure to recognize and avoid the obvious conflict of interest in reporting her own WSIB claim demonstrated a significant lapse in judgment. Clearly, she was interested in obtaining benefits through her WSIB claim, whereas the company would want a full investigation to be conducted to determine her entitlement to benefits, particularly given the inconsistencies in reporting the incident.
- Dishonesty: when confronted during the workplace investigation, the employee denied any wrongdoing and then tried to cover up her actions by delaying the report and providing false information. During the company’s investigation into her workplace accident, Ms. Lagala had failed to produce a complete copy of her WSIB file, omitting certain documents that directly related to her misconduct, including the WSIB’s decision letter confirming that she would be entitled to benefits. Her failure to be truthful and accurate during the company’s investigation further confirmed that she had engaged in a “continuing pattern of misconduct, rather than merely a single moment when she demonstrated a lack of judgment.”
- Breach of trust: the court determined that these actions, both the initial failure to report the workplace injury and subsequent dishonesty, combined with her position of responsibility, constituted a significant breach of trust and compromised her ability to fulfill her role, making it impossible for her to continue working there. Moreover, she attempted to rely upon her long-standing relationship with the company’s Traffic Manager, to whom she was a superior, and the influence she had over him to conceal her own failure to promptly report her workplace accident was “significant misconduct” in its own right, which might, on its own, have been sufficient to support the company’s decision to terminate her employment for cause.
- Employer’s position: The employer, due to the employee’s actions, could have faced legal repercussions for not reporting the injury promptly. This is because she failed to report her workplace accident in any way until October 2019, which was after the WSIB had allowed her claim. So she not only breached the company’s policies but also left it at risk of being found in violation of its accident reporting obligations under the WSIA. She had, in effect, knowingly put her employer in a position where it was in breach of the WSIA.
From the court’s perspective, the employee’s misconduct and dishonesty were valid reasons for termination and dismissed the wrongful termination lawsuit, since the employee proved it had valid grounds for a just cause for dismissal. In short, the court confirmed that all the above-referenced misconduct and dishonesty needed to be considered in light of the fact that she was directly responsible for the administration of the company’s health and safety policies. She knew, or ought to have known, what the company’s policies required her to do following her workplace accident, and deliberately failed to follow those policies. As the court stated:
[85] The Plaintiff’s misconduct, and her dishonesty when confronted with that misconduct, irretrievably destroyed her ability to carry out her employment responsibilities. Put simply, an employer cannot be expected to employ a Health and Safety manager who does not comply with health and safety policies when those policies affect her, and then is dishonest with her employer about what happened after the fact.
Lessons Learned
As such, this case highlights the importance of employees adhering to their job responsibilities and maintaining honesty, especially when dealing with sensitive matters like workplace safety. Specifically, it highlights the importance for employers in Ontario of having clear and well-defined policies, procedures, and expectations in the workplace, especially regarding accident reporting and management related to WSIB matters, especially to prove just cause for dismissal. It also stresses the value of having clearly outlined job duties and responsibilities that align with an employee’s typical work. Finally, it shows the importance of employers conducting fair and thorough workplace investigations and documentation before deciding to terminate an employee for just cause, as demonstrated by the employer’s successful defense based on their comprehensive investigation into the employee’s claim.
Facing a job loss (wrongful dismissal) is a difficult time for most employees. Among other things, ensuring you receive the appropriate severance package you deserve is essential and requires the guidance of an experienced Ontario employment lawyer. To help you, an employment lawyer in Toronto will review your employment contract, review your severance package, and carefully review and discuss your specific circumstances leading up to your termination of employment, such as any potential claims of discrimination or harassment at work. Most importantly, an employment lawyer can help with calculating severance pay and, if necessary, help negotiate a severance package with your employer on your behalf.
If you are an employer or employee needing to speak with an experienced Ontario wrongful dismissal lawyer to discuss your options and next steps on how to deal with workplace issues, call Bune Law, employment law firm in Toronto. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.