Wilful Misconduct: An Onerous Standard

• Published date: 16 June 2023
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Employment Litigation/ Tribunals
• Law Firm: Loopstra Nixon LLP
• Author: Mr Elliot Saccucci, Alessia Grossi and Amanda Franker-Shuh

ONTARIO COURT FINDS THAT COSTCO EMPLOYEE ENGAGED IN WILFUL MISCONDUCT

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:

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