WILFUL MISCONDUCT: AN ONEROUS STANDARD
ONTARIO COURT FINDS THAT COSTCO EMPLOYEE ENGAGED IN WILFUL MISCONDUCT
By: Elliot Saccucci, Alessia Grossi and Amanda Franker-Shuh.
In a recent decision from the Ontario Superior Court of Justice, Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013, an employer successfully proved both just cause at common law and wilful misconduct under the Employment Standards Act, 2000 (the “ESA”) in relation to an employee who deliberately deleted a company website, twice.
Acknowledging that courts have established that wilful misconduct under the ESA is a higher standard to meet than that for just cause at common law, the Park decision provides guidance for employers as to when wilful misconduct will be established.
To establish just cause for dismissal at common law, the employer must prove that the employee engaged in misconduct that is incompatible with the fundamental terms of the employment relationship. As such, dismissal of the employee will be warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship, as determined by a contextual examination of the nature and circumstances of the misconduct. Furthermore, the ESA provides that an employee will not be entitled to termination pay or severance pay where they engage in “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and that has not been condoned by the employer” (see O. Reg. 288/01).
What does this mean for employers?
Even though an employer may have just cause to dismiss an employee at common law, the employer may still have to pay severance and termination pay under the ESA where wilful misconduct has not been established.
WHAT HAVE COURTS PREVIOUSLY DECIDED?
The Ontario Court of Appeal has provided guidance on how and when to distinguish between just cause for termination (common law) and wilful misconduct (ESA).
In Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310, an employee was dismissed for cause after slapping a female co-worker on her buttocks. While the court agreed with the trial judge that Mr. Render’s conduct constituted just cause for termination, it found that his conduct did not fall within the definition of “wilful misconduct” under the ESA. The employer was still required to pay Mr. Render his entitlements under the ESA.
In reaching this conclusion, the court considered the fact that Mr. Render’s misconduct was not pre-planned and occurred in the heat of the moment.
To meet the standard for wilful misconduct, the employer must demonstrate that:
- The misconduct was intentional or deliberate; and
- The misconduct was pre-planned or pre-meditated.
Although this is a high standard for employers to make out, the court in Park shows us that it is not impossible.
THE CASE OF PARK:
Park involved a Costco employee, Mr. Robert Park, who had worked for the business for 20 years when he was terminated without notice. In late 2014, Mr. Park created a Google cloud-based website which allowed users within his toys department to share files with one another.
Mr. Park developed and worked on the website during work hours, with the assistance of an inventory control specialist, who helped him with testing the site. Mr. Park described the website as his “pet project.” There was no dispute that the website was Costco property.
In 2015, Mr. Park was transferred to a new position in the lawn and garden department and his manager emailed him requesting access to the website.
The following day, Mr. Park deleted the website and replied to his manager’s email indicating that he had deleted the website as no one had expressed interest in using it. The court noted that Mr. Park’s email appeared to be deceptive, suggesting that he had deleted the website some time ago.
That same day, Costco was able to restore the website, only to have Mr. Park delete it for a second time. With respect to this second deletion, Mr. Park testified that he did not know the website had been restored. He saw the program on his computer and thought that maybe he had not deleted it properly.
Costco’s position was that Mr. Park’s deletion of the website, twice, together with his alleged insubordinate behaviour towards management and dishonesty amounted to wilful misconduct and warranted dismissal for just cause.
Mr. Park claimed wrongful dismissal.
FINDINGS OF THE COURT:
The court dismissed Mr. Park’s action, finding that he did, in fact, engage in wilful misconduct and that Costco was therefore justified in terminating his employment for cause.
The court specifically referred to the test for wilful misconduct outlined in Render and found that Mr. Park’s conduct was both intentional and deliberate.
The court found that Mr. Park had engaged in four separate acts of misconduct:
- Deliberately deleting the website after receiving the first email from his manager;
- Sending a misleading email to his manager suggesting that he had deleted the website sometime ago in the past because no one had gotten back to him on whether they wanted to use it;
- Responding to an email with insubordinate, inflammatory, and disrespectful language that seriously undermined management’s authority; and
- Deleting the website for a second time, this time from both his computer and from the computer’s recycling bin.
Despite the onerous standard, the court ultimately found that Mr. Park’s actions constituted wilful misconduct. His conduct was entirely incompatible with the fundamental terms of his employment relationship with Costco.
TAKEAWAYS FOR EMPLOYERS:
When contemplating dismissals and terminations, employers should be aware that:
- Wilful misconduct remains a high bar to meet and is a more onerous standard than just cause for termination
- An incident of misconduct that occurs in the heat of the moment (as in Render) will not likely result in an employee forfeiting their minimum entitlements under the ESA.
- Employees can be dismissed without notice (as in Park) when their misconduct:
(i) Warrants just cause for termination; and
(ii) Constitutes wilful misconduct.
While the court in Park provides some guidance, there lingers a sense of uncertainty associated with wilful misconduct and determining when employee conduct will actually rise to the level of wilful misconduct. A fact-specific analysis is required.
Before proceeding with a dismissal for cause, especially where wilful misconduct may be involved, employers should consult with counsel to foster best practices and reduce risk.