By Barry W. Kwasniewski and Martin U. Wissmath

Labour Board Decides No Need for Employee Response to Wilful Misconduct Investigation

Ontario’s minimum employment standards do not impose a procedural duty of fairness on an employer that is terminating an employee for wilful misconduct, according to the Ontario Labour Relations Board (the “Board”). Max Aicher (North America) Limited v Richard Bell is a Board decision published July 29, 2024, in which the employer, Max Aicher (North America) Limited (the “Employer”) sought review of an Order to Pay under the Employment Standards Act, 2000 (the “ESA”) issued by an Employment Standards Officer (“ESO”) in favour of Mr. Bell (the “Employee”), who was terminated without statutory notice or severance pay. The Board vacated the Order to Pay and found in favour of the Employer. This tribunal decision is not binding on Ontario courts. However, it offers charities and not-for-profits an example of how a complaint may be decided under current employment standards laws where there is wilful misconduct by an employee.

The Employer operates a steel rolling mill in Hamilton that processes steel billets into tempered steel rebar. The Employee had worked at the mill from March 2016 until his termination on January 9, 2023. On January 3, 2023, the Employee had caused certain water pumps to be turned off at the end of his day shift without telling the night shift worker, causing $50,000 in lost production of rebar. The next day, January 4, 2023, the night shift worker arrived early, and countermanded the Employee’s attempt to turn off the water pumps at the end of the day, avoiding any lost production. The night shift worker reported the Employee’s conduct to a manager and characterized it as sabotage. The Employer conducted an investigation without interviewing the Employee and terminated his employment without notice.

At issue were two paragraphs of a regulation under the ESA, namely Ontario Regulation 288/01: Termination and Severance of Employment:

Employees not entitled to notice of termination or termination pay

2. (1) The following employees are prescribed for the purposes of section 55 of the Act as employees who are not entitled to notice of termination or termination pay under Part XV of the Act:

[…]

      3. An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

        […]

Employees not entitled to severance pay

9. (1) The following employees are prescribed for the purposes of subsection 64 (3) of the Act as employees who are not entitled to severance pay under section 64 of the Act:

[…]

6. An employee who has been guilty of wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.

The ESO had found that the Employer failed to provide the Employee with procedural fairness by not giving him an opportunity to respond to allegations of wilful misconduct before terminating his employment. The Employer argued that the Employee’s actions constituted wilful misconduct and that they were not obligated to provide him with procedural fairness.

The Board agreed with the Employer, finding the Employee had engaged in wilful misconduct, and stating:

68. There is nothing in the Act of the Regulations which imposes a duty of procedural fairness (including the opportunity to be heard) upon an employer who seeks to rely upon an employee’s wilful misconduct, disobedience or wilful neglect of duty in invoking sections 2 (1) 3 and 9 (1) 6 of Regulations 288/01.

The Board also agreed with the Employer’s argument that “after acquired cause”, where an employer finds cause for dismissal after termination of an employee, demonstrates that there is no duty of procedural fairness at common law. An employee in that situation would never have had a chance to respond to the allegations of misconduct that led to their dismissal.

While this tribunal decision is an example of an employer successfully arguing that they did not need to interview an employee or obtain their response to allegations of misconduct prior to termination without notice or severance, it is not a guarantee that a court would rule another case the same way. It is generally recommended that employers allow employees to respond to misconduct allegations and undertake a full investigation, including an in-depth interview of the employee before making the decision to terminate for cause. An employment lawyer should be consulted prior to any decision to terminate an employee without notice, or for alleged cause.

​Read the September 2024 Charity & NFP Law Update