Court of Appeal Finds Progressive Discipline Not Necessary in Just Cause Dismissal

Just cause is a difficult standard for employers to meet. In most cases, employees who are terminated from employment will be entitled to notice or pay in lieu of notice. However, there are circumstances where the courts will find that dismissal for cause is warranted, as illustrated in a recent decision of the Ontario Court of Appeal, Agostino v Gary Bean Securities Ltd.

The Plaintiff had been employed with Gary Bean Securities for approximately four years in the role of an investment advisor. The employer had not been pleased with the Plaintiff’s performance due to a high level of errors. Ultimately his employment was terminated after he made unauthorized trades on behalf of a client without the client’s permission, and also made representations to the client and to his employer that he knew were false.

The trial judge found that given his role as an investment advisor in a heavily regulated industry, honesty was fundamental to his position. Although dishonesty does not automatically translate into cause for dismissal, in this context it did. The trial judge found that trust is the foundation for the investment advisor’s relationship and that the Plaintiff’s actions in conducting unauthorized trades and making misrepresentations shook that foundation to the core.

The Court of Appeal upheld the trial judge’s decision. The Court noted that there is no legal principle that requires progressive discipline in every case. In this case, it found that the trial judge considered whether progressive discipline was appropriate but in the circumstances determined that the Plaintiff’s dishonesty warranted dismissal for cause, not a lesser form of discipline.

Just cause is a very high standard. In this case, the nature of the Plaintiff’s position was integral to the Court’s determination that just cause existed. In most cases where there is an issue with an employee’s performance or conduct, the employer will need to provide the employee with warnings and opportunities to correct the behaviour. It is important that managers are proactive in identifying issues and bringing them to the employee’s attention. Where management sits by the wayside, a court may find that the employee’s behaviour has been condoned.

At the 2015 Ontario employment law conference, labour and employment lawyer Jeffrey Murray will provide you with an in depth look at latest cases from the Courts and labour arbitrators regarding employee discipline and terminations.  The session will cover:

  • When employers can and cannot discipline employees with disabilities,
  • When employers can discipline for off duty conduct,
  • Best practices for disciplining for poor performance, and
  • How to decide if you should assert just cause for dismissal.

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