Mike Duffy turned 75 and retired from the Canadian Senate this week. In his closing address to his peers, he lamented how he was treated when placed on an unpaid suspension for nearly two years during an investigation into his false expense claims.
In his closing remarks, Duffy complained that he should have been treated the way any other suspended employee would have been treated in the same circumstance.
Duffy was investigated and charged criminally after he claimed living expenses for his Ottawa residence, despite reportedly living in the city for decades. He claimed instead that his home in Prince Edward Island was his principal residence.
Duffy was also investigated for travel expense claims that were not related to Senate business and for almost $65,000 in Senate funds paid to the company of Duffy’s friend Gerald Donohue. Duffy was not criminally convicted.
It is notable though that Duffy repaid the Senate approximately $90,000 following the investigation, a clear acknowledgement of his flouting the rules. Remarkably, he was then permitted to return to work as a Senator.
While few of us can sympathize with Duffy’s lamentations, his complaint isn’t without some merit.
Even after such obvious misuse of Senate funds, suspending an employee during an investigation must be done carefully. In almost all situations, suspended employees should continue to be paid.
If an employee of a typical private company claimed false travel expenses, living expenses or channeled company funds to a non-arm’s length company, one would expect they would be exited, for cause, with no reasonable chance of returning. Practically speaking, the relationship of trust that must exist between an employer and employee would be irreparably broken.
Most employers believe this type of misconduct would surely justify a swift termination for cause. Not necessarily.
The fact is, the courts have been critical of employers that have hastily terminated employees for cause even after an expense scandal.
For example, in the case of Tsakiris v. Deloitte and Touche LLP, Tsakiris was terminated for cause following his breach of Deloitte’s expense policy.
Tsakiris admitted to manipulating or defacing the date and time on receipts submitted to the firm for reimbursement. Tsakiris admitted that several of these expenses were for meals with his girlfriend or mother. He was disciplined with a warning letter and placed on a performance improvement plan. A few months later, Tsakiris again filed questionable expenses – receipts for meals with people that had nothing to do with client work. Deloitte terminated Tsakiris for cause before giving him a chance to explain.
At trial, Tsakiris testified that the meals were related to business development and recruitment. He charged the meals to client files because he did not know where else to charge them to. Even though the trial judge found his evidence at times to be self-serving, the judge found that Deloitte’s response wasn’t proportionate, that less drastic measures were available to it, and that Deloitte “gave the plaintiff no opportunity to explain the context in which the expenses were incurred”.
Tsakiris was awarded 10 months of wrongful dismissal damages.
The takeaway for employers is that terminations for cause should always be approached with care, planning and appropriate documentation. Even the most reprehensible cases can fail without adequate preparation and foresight.
On to your questions from this week:
- I have been on the receiving end of some pretty creepy behaviour from my boss. Things like sexy comments on my clothing and intrusive questions about my personal life. I went to HR and was asked to identify who the person is. I’m reluctant because I don’t want things to be awkward. Will my employer still investigate my complaint even if I don’t share the name of the person I am complaining about?
- It would be near impossible for your employer to investigate your complaint without you naming the offender. Even if you ask that your information is kept confidential, your employer is limited from completing a full investigation and determining potential outcomes. Your boss also has the right to respond to allegations made against him or her. Think about what you want out of the investigation. If it is an apology, a commitment to further training and education or discipline, giving HR all of the details will then require your employer to protect you from this behaviour from happening again. Keep a record of all of your exchanges with HR.
- I have been offered a new job and there is no termination clause in the new contract. My old job offered me 4 months if I got terminated, and I at least want that if I get terminated at my new job. How do I negotiate that?
- It is generally always advantageous for an employee to have an employment agreement that is silent with respect to your entitlements on termination. It gives you, the employee, the power to negotiate an appropriate severance package if terminated, taking into account a variety of factors including the availability of similar employment. Depending on the circumstances you could be entitled to much more than 4 months.
By Sunira Chaudhri. PHOTO BY JUSTIN TANG/The Canadian Press. Article originally appeared in the Toronto Sun: https://torontosun.com/opinion/chaudhri-duffys-complaint-wasnt-without-some-merit-suspending-an-employee-must-be-done-carefully