Believe Me, Ontario Court Upholds Termination For Dishonesty

Employers are sometimes surprised to learn that they do not necessarily have just cause to terminate a dishonest employee. It is true that employees have an implied duty of faithfulness and honesty in their relationships with employers, but as the Supreme Court of Canada ruled in its 2001 decision: McKinley v. BC Tel (2001 SCC 38), not all acts of dishonesty justify termination of employment. Employers need to take a contextual view of the misconduct and analyze whether the nature and degree of dishonesty has irreparably damaged the employment relationship to the point that it cannot continue. This is a high threshold to meet before an employee can be terminated for dishonesty, but a recent Ontario case has shed some more light on when an employer will be justified in firing a dishonest employee.

Francis Aboagye sued his former employer Atomic Energy of Canada Limited ("AECL") for wrongful dismissal and sought damages totalling $4 Million. In response, AECL applied to have Aboagye's claim dismissed on a summary basis for failing to establish any legitimate issue for trial. The Ontario Superior Court of Justice ultimately agreed with AECL, and in 2017 the Court of Appeal affirmed that decision.

AECL is Canada's leading nuclear agency, with research facilities in operating in various locations including Chalk River, Ontario, and the Port Hope Area Initiative. Employees have access to nuclear facilities and information vital to the security of Canada due to the sensitive nature of material and equipment being used by AECL. Accordingly, all employees are required to obtain security clearances corresponding to their positions and AECL is required to comply with the federal government's mandated rules under the Nuclear Safety and Control Act, General Nuclear Safety Control Regulations, the Nuclear Security Regulations, and security clearance requirements established by the Canadian Nuclear Safety Commission.

On April 3, 2012 Mr. Aboagye was offered employment with AECL as an Industrial Safety Specialist subject to successfully obtaining security clearance. As part of the security clearance process Mr. Aboagye was required to disclose all employment information for the last five years and warned that refusal to provide information would result in a review of the applicant's eligibility to work for AECL. Mr. Aboagye completed the requisite form on April 29, 2012, but left a gap in his employment record for the current period of time. He was...