The decision released yesterday in Dennis v. Ontario Lottery and Gaming Corporation is a delightful and convoluted example of why context can be so incredibly important in employment law, and why lawyers can never make blanket statements like "theft is just cause".
Ms. Dennis worked for OLG for over 13 years, until they decided to fire her without cause. They offered her a package being roughly equivalent to 53 weeks' salary, and she accepted it.
Then they found out that Ms. Dennis had done something bad.
For several years, in addition to her regular duties, she had volunteered to handle ticket sales and cash receipts relating to an arrangement between OLG and Canada's Wonderland involving admission ticket sales to the park. However, in the summer leading up to her dismissal, she fell for a classic Nigerian fraud scheme on the internet, and was taken for somewhere between $12,000 and $15,000. She drew a little over a thousand dollars of that money from the proceeds of sales of Wonderland tickets.
Fully intending to repay it, of course. But still, sometimes you have to wonder what people are thinking.
So when OLG discovered the shortfall in the Wonderland cash, they called the OPP, who investigated and charged Ms. Dennis with theft under, a charge which was subsequently withdrawn at the request of the Crown.
OLG, for its part, refused to pay out on the settlement it had agreed to, taking the position that it had just cause for termination and that Ms. Dennis' failure to disclose the cash shortfall permitted it to resile from the agreement. In deciding to do this, they embarked on what Justice O'Marra called an "inadequate and inaccurate internal investigation", which concluded that Ms. Dennis had admitted to theft and admitted guilt in court. (She admitted to taking the money. It may be a nuance only lawyers understand, but that's not the same as admitting theft - no mens rea. But the more obvious defect is that they assumed that she had pled guilty, whereas in fact the charge had been dropped.)
The Court upheld the settlement agreement, finding that, in light of her intent to repay the money, the fact that her role managing that money was outside the scope of her ordinary employment duties, and the inadequate and inaccurate investigation, it was "totally disproportionate for OLG to view her conduct as support for termination with cause."
First, I would like to point out an interesting missing link in the decision. The fact that the misconduct did not amount to "just cause" is very important, but it's rather different from the question of whether or not OLG should be able to resile from the settlement agreement. There are circumstances in law where a material non-disclosure can be treated as a misrepresentation sufficient to ground rescission for a contract. It may well be that the test for rescission of the settlement is met, even though the test for just cause is not.
This would yield the interesting circumstance of Ms. Dennis being able to pursue damages not limited by the settlement agreement or release. (That said, I don't have any reason to believe that the settlement was too low in the first place.)
Conversely, it's also not generally going to be true that an employer will be able to assert after-acquired just cause after a settlement agreement is made. Even if the conduct would amount to just cause, it does not necessarily follow that the employer would be entitled to rescission of the contract.
Secondly, the employer's 'duty to investigate' has long been a point of discussion - there's a real question in law as to whether an employer is obligated to hold a procedurally fair investigation before termination for cause, or if it's just a really good idea but not mandatory. It seems strange to me that her conduct might no longer stand as just cause because the employer overstated the case in its investigation conclusions.
Thirdly, I don't take issue with Justice O'Marra finding that it was mitigating that overseeing that money wasn't a part of her regular employment responsibilities - if it was, say, a bookkeeper tasked with maintaining petty cash, it would have been worse - but it's important to highlight that it's not entirely a defence on its own. Misconduct of that nature that's connected to the employment relationship - and this certainly was - would absolutely be disciplinable.
But ultimately, the most important thing that this case does is highlight the fact that even relatively egregious conduct - taking over a thousand dollars that wasn't hers - might not stand as just cause, in the right fact pattern.
This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
The author is a lawyer practicing in Newmarket, primarily in the areas of labour and employment law and civil litigation. If you need legal assistance, please contact him for information on available services and billing.