Last week, Justice Nightingale decided the case of Volchoff v. Wright Auto Sales Inc., a wrongful dismissal case by a car sales manager, who was dismissed allegedly for cause.
Just cause is a high threshold, and it's relatively rare to see dismissals for cause. It's even rarer to see the 'just cause' defence succeed at trial. This is not one of those cases.
The allegation against Mr. Volchoff was that he attended at work while under the influence of alcohol, including driving company vehicles. However, at trial, the employer's evidence was pretty thin, establishing only that, on one or two occasions, he had the smell of alcohol on his breath. Mr. Volchoff readily admitted to having the occasional glass of wine at lunch at a local restaurant, usually before Manager's Meetings on Wednesdays. (The employer held two meetings with Volchoff about that, and there's a dispute as to what happened in them. Volchoff insists that there was no mention of a 'zero tolerance policy' at the first meeting, and that no other issues were raised despite him continuing to have his lunchtime wine before the weekly management meetings, and that the zero tolerance policy was first mentioned at the second meeting, following which Volchoff's evidence is that he stopped drinking wine at lunch.)
There were later and more serious allegations, arising in June 2014, including that he drove the employer's vehicles while impaired, but the evidence in support of these claims was extremely vague and non-specific - little in the way of times and dates when he was allegedly impaired, little in the way of evidence of actual impairedness (as opposed to evidence that his cheeks were red, for instance, which didn't trouble the judge in light of observing that Volchoff "displayed a natural rosy cheek complexion"). Some of the employees who expressed concern testified that they had raised their concerns many months before the issues in question arose in the first place.
Only one witness' evidence had any real specifics capable of sustaining the more serious allegations: One Mr. Knaud testified that, after Volchoff returned from Manager's Meetings, he observed Volchoff to "have rosy cheeks, glazed eyes, slurred speech and the smell of alcohol", including while dealing with customers. However, the plaintiff's counsel successfully challenged this evidence on cross-examination, and his credibility was further damaged by testimony that the judge characterized as "intentionally vague and not truthful", claiming not to recall anything pertaining to another complaint he made about Volchoff in June 2014: He (and other employees) had objected to changes Volchoff had made in how internet-generated leads were treated
The employer claimed to have a 'zero-tolerance' policy for alcohol during working hours. This would be reasonable for such an employer, but Mr. Volchoff claimed that this policy was never brought to his attention, even after he advised the employer that he occasionally had wine at lunch.
The judge believed Volchoff's evidence on the point.
If the employer had a zero-tolerance policy, it was never formalized and not brought to Volchoff's attention, and in any event there was no trail of progressive discipline, nor sufficient evidence that Volchoff was expressly advised that his employment was in jeopardy. (The employer's evidence, again, included some evidence that he was told at the first meeting that there would be 'repercussions' if he continued to drink during working hours; however, the evidence was not corroborated by other employer witnesses who were present.) There was no evidence to substantiate the more serious allegations against Volchoff, and no evidence that he was drinking during working hours when he had been told not to.
Thus, the just cause defence failed, and Volchoff was entitled to damages for pay in lieu of reasonable notice.
The Suspension Obiter
Justice Nightingale made reference to an investigative suspension, and highlighted the absence of other progressive discipline.
He was placed on a suspension with pay for one week pending investigation of his conduct. An imposition of continued discipline including a further suspension, with or without pay, for a reasonable period of time, including a specific warning that any further violation would result in his termination, would have been appropriate to bring home to Mr. Volchoff his employer’s serious concerns, if it had them, with his conduct and make him realize his job was now in jeopardy if he continued. Progressive discipline, short of termination of employment, was clearly more appropriate in this case.Professor Doorey, in his blog entry on the subject, finds this commentary to be very strange, for two reasons. Firstly, there's no suggestion in the description of the evidence that there was a contractual basis for a disciplinary unpaid suspension, and it's fairly widely accepted that, in the absence of a contractual entitlement to do so, an unpaid suspension constitutes a constructive dismissal, unless the misconduct rises to the level of just cause for termination anyways. (See Justice Echlin's decision in Carscallen v. FRI.)
Secondly, Justice Nightingale seems to conclude that the employee didn't actually do anything wrong: There was no evidence to establish that he ever attended at work in a state that rendered him unable to properly carry out his duties; the evidence Justice Nightingale accepted led to the conclusion that he never violated employer directions; etc. So why would a suspension have been appropriate?
To be charitable to Justice Nightingale, I read this less as a finding that a suspension "would have been appropriate", and more of a suggestion - made in slightly too specific terms - that, "if" the employer "had serious concerns", it had other options to drive them home with the employee before leaping to termination. Which is fair, but for the 'constructive dismissal' issue from Carscallen, which would likely have made an unpaid suspension unavailable to the employer. That being said, while there's no express reference to a contractual right to suspend, there's also nothing in the decision or described evidence that would foreclose such a possibility: Thus, it would be very hard to read this obiter as conflicting with Carscallen in any serious way.
Contractual Integration of Policies
All things considered, particularly given Justice Nightingale's findings of fact, the result seems pretty straightforward, but there are two elements of the analysis which I find slightly troubling.
Firstly, Justice Nightingale was clearly looking for integration of the "zero tolerance policy" into the employment contract itself.
I am not satisfied that the zero-tolerance policy of the Defendant, whatever it was, was a term of the employment contract between the Plaintiff and the Defendant when he was first hired or, because of the lack of consideration, became one after he was hired.This conflates the applicable legal principles. Yes, contractual rights must be agreed upon by the parties, with consideration. But the right to set a zero-tolerance policy may well be within an employer's implied contractual rights.
In any employment contract, the employer retains certain management rights. An employee's duties of loyalty and fidelity require an employee to comply with management directions, generally. (Of course, this isn't without exception. If I tell my employees to do something illegal, they'll be entitled and obligated to refuse. If I set a requirement that I am prohibited by statute from requiring, then that will likewise be unenforceable. If I issue an order that conflicts - either expressly or impliedly - with the employee's existing contractual rights, then this may constitute a constructive dismissal.)
Many employment contracts do expressly integrate a policy manual or employee handbook, and reserve upon management the right to modify the policies from time to time. This is probably not necessary (generally speaking) in order for management to have the right to set such policies, within reasonable limits, on a unilateral basis and without obtaining contractually binding assent of the employees.
IF the employer told Mr. Volchoff that he was not permitted to have any alcohol in his system while working, and Mr. Volchoff then continued to return to work after drinking wine at lunch, then the analysis doesn't stop with "It wasn't integrated into his contract." Go on to "Did the employer have the contractual right to require this of Mr. Volchoff?" The answer to that is probably 'yes'. (Would they have the right to say "Don't drink cranberry juice at lunch"? Likely not. But setting reasonable requirements for the state in which Volchoff must be upon his return to work is very likely justifiable.) Next, we would go on to determine whether or not the conduct rises to the level of just cause: If there were reliable evidence of significant impairedness, and/or damage or injury from a collision, then there might be a worthwhile argument for cause. But formal breaches of the zero-tolerance policy, in the sense of showing up to work with a low BAC from a glass of wine at lunch, would almost certainly require progressive discipline.
Of course, Justice Nightingale did not find that Volchoff continued to drink after being told not to, so this whole analysis is entirely hypothetical.
What is or isn't Discipline?
I am also slightly troubled by the phrase "continued discipline", in the suspension obiter remarks, which implies that the investigative suspension was disciplinary in nature. This is an important distinction. It is common, particularly in larger organizations, for the subject of serious allegations of misconduct to be suspended, with pay, pending the results of the investigation. This is not disciplinary, and should not be regarded as so. It does not imply any finding of fault, and is not intended to be punitive or corrective in any way.
Disciplinary suspensions, where they are appropriate, are different in nature.
There's also room to discuss 'early stage' discipline: Let's suppose that I have a policy against swearing in the workplace, but I've never informed you of it or enforced it, and a culture of swearing has developed - which I have condoned. I can't simply tally up all your swears for several months, say nothing to you about it, and then fire you one day because of the cumulative impact of them. Rather, I need to start the ball rolling of 'progressive discipline'.
Yet my condonation of the act, and your lack of awareness of the policy, means that, in any objective sense, you're not doing anything 'wrong' at all. So how can I discipline you for something that isn't wrong?
The initial stage is going to have to be an informal (but still clearly documented) caution: We might argue about whether or not it's properly characterized as discipline. I define discipline as being corrective in nature: Bringing to your attention my expectations, and the way in which I expect you to modify your behaviour moving forward, is certainly discipline. If you regard discipline as fundamentally punitive, then you might take a different philosophy. (Simply, I don't regard a punitive model of discipline as being appropriate in an employment relations context.)
I'm prepared to give the employer the benefit of the doubt in terms of how this termination came about. It certainly sounds like some of the complaining employees had an axe to grind with Volchoff, but their complaints left the employer with the good faith impression that Volchoff had a long-standing and continuing drinking problem. In light of the safety-sensitive nature of some of his work, it's difficult to ignore that impression, even if you can't prove it - particularly when Volchoff himself admitted to a little bit of drinking. (It's widely viewed that people underestimate their own alcohol consumption.)
So they dismissed him. And then he sued, and they wanted to allege cause, and their lawyer explained to them what would be necessary to prove cause, such as - likely - evidence of progressive discipline and clear indication that his continued employment was in jeopardy if he continued to drink. The evidence of one of the people in a meeting that she's sure she told Volchoff that there would be "repercussions" sounds like the classic case of an employer looking to fit the contents of the meeting to the 'form' of a case for just cause, on an ex post facto basis.
But, even on this generous assessment, I don't have much sympathy for the employer. For two reasons: Firstly, they botched the process significantly. If they actually had a zero-tolerance policy, they failed to properly implement it. If they actually told Volchoff not to drink, period, then they should have maintained better written records of that direction. If they actually cautioned Volchoff that his employment was in jeopardy, again, they should have done so clearly and in writing.
There's a way to go about these things.
And with the judge characterizing the defence evidence as being largely vague and unspecific, it almost sounds like the defence strategy was to paint the plaintiff as a lush - which would be a very poor strategy, in general, for a few reasons. Firstly, if he really did have a serious drinking problem which frequently manifested at work, then issues should have arisen sooner, and it should have been much easier for the defence to point to specific work-related failings that resulted. Secondly, smear tactics are generally frowned upon for employers in wrongful dismissal proceedings. Thirdly, if he was an alcoholic, then that raises the spectre of human rights issues and the duty to accommodate.
So yes, I can understand the employer having concerns about continuing to employ somebody under those circumstances, but you need to investigate thoroughly, come to justifiable factual conclusions as to what the actual state of affairs is, and then come up with a strategy for addressing the issue - with competent legal advice, preferably.
Alcohol in General
This isn't the first 'drinking on the job' case I've posted about. In 2013, I discussed the Dziecielski case, involving an individual who stopped for lunch on his way back to the office from a customer visit, had a few beers with lunch, then wrecked the employer's vehicle and was charged with impaired driving. 9 years earlier, he had signed off that he had reviewed the employee handbook, which specified that drinking during working hours was a "major" violation.
In that case, the employer was found to have established just cause, which was the right result in the circumstances, but I pondered some counterfactuals: What if it was only one drink? What if there had been no collision? Would violation of the 'no drinking' rule still have warranted summary termination without a trail of progressive discipline?
These two cases certainly illustrate the importance of context. In Dziecielski, we have an egregious scenario with significant drinking, a BAC of over 80, criminal charges, a collision in the employer's vehicle, and a policy which expressly prohibits drinking at all. In Volchoff, we have an individual who was proven to have the occasional glass of wine with lunch, but with no criminal charges, no evidence of significant impairment or performance concerns, no collisions, and inadequate evidence of a formal policy.
Many employers take a dim view of drinking - at all - during working hours. This isn't unusual. Some don't. As I noted in my discussion of Dziecielski, I used to frequently go to lunch with my old firm's partners (i.e. my bosses at the time) and have a pint or a glass of wine. (At that time, I practiced in the same town as now-Justice Nightingale, and one or more of his partners would occasionally join us as well, incidentally. What can I say: There's certainly a charm to small-town law.) Obviously, they didn't object to it - from time to time, they even bought. But if I'd drank to excess, certainly that would have changed their view.
Either way, scale and context are important, and that's what the Volchoff case ultimately establishes.
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.