Employers Beware – Theft Not Always Cause for Termination

In early 2017, a British Columbia Supreme Court judge awarded damages of $46,000.000 to a Burger King franchise employee with twenty-four years of service whose employment was terminated for cause for stealing an order of medium fries and a drink (Ram v. The Michael Lacombe Group Inc., 2017 BCSC 212). The employee Ms. Ram was 55 years old at the time of her dismissal.

As Justice Warren reminds us in the written decision, per the Supreme Court of Canada’s ruling in McKinley v. BC Tel, 2001 SCC 38, dishonest conduct on the part of an employee does not always amount to cause for dismissal. Whether an employer is justified in dismissing an employee without notice on grounds of dishonesty, including theft, is a question that requires an assessment of the seriousness of the misconduct in the context of the particular case to determine whether dismissal without notice is a proportionate sanction.

Accordingly, where an employer alleges theft as justification for dismissal without notice, it is necessary to determine whether the evidence establishes that the theft actually occurred and, if so, whether the specific nature of the misconduct in the specific circumstances warrants dismissal.  The employer bears the onus of establishing both parts of the test on a balance of probabilities.

Once the court has concluded that it is more likely than not that the employee engaged in the misconduct alleged, the court must then consider the misconduct in context to determine whether it has caused an irreparable breakdown of the employment relationship.

Justice Warren considered that, given the absence of any evidence of premeditation or attempted concealment, the absence of any prior formal discipline history, Ms. Ram’s excellent and lengthy record working for the Burger King franchise, the nature of her position, and the economic vulnerability as a 55-year old woman with little education, she found that summary dismissal would not be a proportionate sanction.  In her decision, Justice Warren stated that a less serious sanction, such as a formal letter of reprimand, would have sufficed.

In the circumstances, the court awarded $21,000 for what should have been Ms. Ram’s 12-month reasonable notice period. In addition, the court found that the employer behaved in an unreasonable, unfair and unduly insensitive manner in the manner of termination, and awarded $25,000.00 in aggravated damages.

Why does this case matter?

This is a cautionary tale for employers, as significant aggravated damages can be awarded in cases wherein the employer is found to have terminated the employee in an unfair or bad faith manner.

Before determining whether it is appropriate to terminate an employee for cause due to theft, particularly an employee with a long and/or otherwise positive service record, it is advisable to speak to employment counsel first and assess each employee on a case-by-case basis. For further information on this issue please contact via 416-214-5111 or by here.