Legal Shades of Grey: Are offensive statements made on personal time just cause for termination?

Jun 2, 2015

Hydro One Employee Terminated for Making Sexist Statement to a TV Reporter

Shawn Simoes who worked as an engineer for Hydro One was recently terminated when his employer found out that he made an offensive and sexist comment to a female TV reporter, Shauna Hunt. To read the Global News story about this, click here. He did not identify himself as a Hydro One employee. However someone saw the story on TV, and told Hydro One who fired him shortly after the story ran on TV.

Is Making a Sexist Comment Just Cause for Termination?

Assuming Mr. Simoes is not a member of a union, he can commence a wrongful dismissal action and claim for termination pay. Hydro One will be ordered to provide him with termination pay unless it can prove it had “just cause” to terminate his employment.

Is making an offensive or unpopular statement in your personal capacity just cause for termination?

The Three-Step Test an Employer must Satisfy to Prove “Just Cause”

The Ontario courts have outlined a three-step approach to determine whether employee misconduct strikes at the heart of the employment relationship.

The first step is determining the nature and extent of the misconduct. Mr. Simoes could argue that he made the comments in his personal capacity and so there is no connection to his employment relationship and therefore no misconduct warranting any kind of discipline. This argument would not work for a teacher who is convicted of sexually assaulting a child, though the two cases are very different. At what point does ones actions in private become subject to an employer’s scrutiny? Is it any time a person’s word or action becomes public? In this case, this employee was fired shortly after the story ran on the news. In the age of social media where any word or action can be simultaneously captured and posted on twitter, facebook, instagram and other social media platforms- can this really be the standard?

The second step involves considering the surrounding circumstances for both the employer and the employee. In this case, the employee was not at work or a work related function and he was not representing his employer. He uttered a deeply offensive phrase that soccer fans have been directing at reporters for about two years. I have not heard anyone suggest that his words in any way reflected Hydro One’s corporate values.

The third step is determining whether a dismissal is warranted as a proportional response to the misconduct. This involves determining whether the misconduct is sufficiently serious so as to give rise to a breakdown in the employment relationship. At this point in the analysis a judge will consider a number of factors including the employee’s length of service, whether he was a face of the organization to the client or the public, his disciplinary record, and whether he apologized. In this case, I suspect a court would also consider whether he had any supervisory responsibilities.

We Are At a Legal Cross Road

We are at a legal cross road where judges are increasingly being asked to decide when private words or deeds can cost a person his or her job.

For a discussion of a recent case involving two firefighters who were fired for sexist tweets, click here.

For my take on the Jian Ghomeshi termination, click here.

The Road Ahead

In the short term, I think the personal sensibilities of individual judges will decide whether an employer can prove just cause in these kinds of cases. Then one of these decisions will be appealed to the Ontario Court of Appeal where a legal test will be articulated for all Ontario trial judges to follow. If a different test is formulated by the court of appeal in one of more other province then this issue could very well be decided by the Supreme Court of Canada. This is how the common law evolves in Canada.

In the meantime, it will be difficult to predict when an offensive personal statement could cost you your job. For employees who work for public sector and quasi public sector employers like Hydro One who can afford to litigate and lose a case to uphold corporate values, I suggest taking great care. For employees who work for small and medium size private sector employers, I suspect that many of these employers will be less inclined to devote money, time and resources to protecting the organization’s reputation/brand/values in this kind of case and will therefore be less inclined to terminate.

For the past 25 years, Doug MacLeod of the MacLeod Law Firm has been advising and representing employers in connection with employee terminations. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

There are many ways to attack the termination clause in an employment contract. 

I am now surprised if employee counsel does not claim that their client’s  termination clause is not legally enforceable - usually because the termination clause does not allegedly comply with the Employment Standards Act.

This blog considers a case, McKercher v Stantec Architecture Ltd., 2019 SKQB 100, where an employee successfully attacked the termination clause in his contract because he did not explicitly agree to it after being promoted. 

The Facts

In 2006, Mr. McKercher commenced employment as a staff architect. The termination clause in his employment contract stated: 

Termination other than for cause will be with notice or pay in lieu of notice, based on your length of service. If the Employer terminates your employment for other than just cause you will receive the greater of:

  1. a)   Two weeks notice or pay in lieu of notice during the first two years of employment increasing by one week for each additional completed year of employment to a maximum of three months notice or pay in lieu of notice.

      or

  1. b)   The minimum notice of termination (or pay in lieu of notice) required by applicable statutes.

Eleven years later, when Mr. McKercher was employed as a Business Centre Sector Leader, his employment was terminated. The employer paid him the three months termination pay he was owed under his employment contract.

 

Another way to attack a termination clause: What is the changed substratum doctrine?

An Ontario judge in a 2012 case, MacGregor v National Home Services, 2012 ONSC 2042 (CanLII), described this legal doctrine as follows: "The changed substratum doctrine … provides that if an employee enters into an employment contract that specifies the notice period for a dismissal, the contractual notice period is not enforceable if over the course of employment, the important terms of the agreement concerning the employee’s responsibilities and status has significantly changed."

 

The rationale for this doctrine has been described by one judge, Schmidt v AMEC Earth & Environmental Ltd., 2004 BSCS 2012 (CanLII), as follows: "In my view, it was incumbent on the defendants to advise Mr. Schmidt that they intended to continue to rely upon the termination provision set out in the Agreement when substantial changes in his employment occurred. This would have allowed him to consider the matter and to negotiate for other terms. If the defendants wished to continue to rely on the termination provisions there ought to have been a ratification of the provisions as the nature of Mr. Schmidt’s employment changed."

 

Decision

The judge hearing this case relied on the following factors when deciding not to enforce the termination clause in the employment contract: ”...there is no evidence that (the employer) made it clear to the (employee) that the notice of termination provisions were intended to apply to the positions to which he was promoted. The employment agreement contains no express wording to this effect, nor does it contain any wording to support the inference of such an intent. Further, and in keeping with the analysis in Schmidt, the Court received no evidence that, as it promoted the plaintiff, SAL reasserted its understanding and expectation that the notice of termination limit would remain in effect.”

 

Lesson to be learned:

An employer should make it clear that the termination clause in an employment contract applies when an employee is promoted. This expression of this intent should be in writing and should be clear and unambiguous. I recommend that an organization’s employment be reviewed by an employment lawyer every year or two. If your employment contract does not address this issue then think about doing so the next time it is reviewed.

 

For 30 years, Doug MacLeod of   the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

 

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