McCallum worked for the Quebec dairy company as a sales representative checking its cheese in stores and providing credit for unsaleable cheese. He attended a Loblaws superstore and removed 14 packages which he deemed unsaleable. He claimed that he intended to later dispose of it himself as the store’s compactor was locked. Unfortunately for him, he was stopped by the store’s loss prevention officer for removing the product without paying. He unsuccessfully approached store management to try to resolve the matter.

Saputo dismissed him without bothering to learn the details of what had occurred, such as the amount of cheese taken, whether it was saleable, that some of the cheese was made by a competitor and that other cheese could not have a credit attached. In other words, Saputo failed to conduct even the pretence of an investigation.

McCallum sued for wrongful dismissal, bad faith damages, punitive damages and costs.

The trial judge did not believe him. He decided that McCallum intended to steal the cheese and also attempted to get a store manager to falsely claim that he had provided permission to remove it from the store.

The trial judge noted that no effort was made to interview McCallum prior to firing him or to obtain statements from others. He was simply “presented with his termination letter.“

McCallum appealed, arguing that there is a “well-established duty to investigate before terminating an employee for dishonest conduct,“ and that Saputo could not rely on information obtained after firing him. He argued the judgement set “a dangerous precedent by allowing an employer to terminate based upon allegations of dishonesty without any investigation and then use the discovery process afforded by litigation to justify the termination after the fact.”

The Manitoba Court of Appeal disagreed with McCallum, citing decisions of the British House of Lords and Supreme Court of Canada finding that, in an employment relationship, “there is no duty to act fairly when deciding to terminate employment.”

Moreover, the Court of Appeal confirmed, an employer could even justify a termination for cause on grounds different then those given, even if they were not known at the time of dismissal, which is referred to as the doctrine of “after-acquired cause.”

There are good reasons to conduct an investigation of the type I describe below. The primary one is that it ties the employee down to a version of events which they cannot credibly later resile from after “lawyering up.” It also sometimes results in employers learning of flaws in their systems or avoiding firing when the employee has a legitimate excuse. Sometimes employers acquire cause for dismissal, not because of what the employee is being investigated for, but because the employee lied during that investigation or refused to participate, both generally grounds for cause.

It is for those reasons that I have my clients conduct investigations before firing. But not the elaborate multi-day, hundred-thousand-dollar investigations pushed by the investigation lobby. Simply have someone in your own human resource department, perhaps training one of them as an investigator, sit down with the accused and other relevant witnesses, and conduct interviews over one or two days. Such an HR employee already knows your culture and policies and has an immediate advantage over an outsider.

If you are going to engage a third-party investigator, which is advisable, for example if the CEO’s conduct is suspect, never use an outside lawyer or investigator but use a retired judge.

They will have the immediate respect of all relevant stakeholders, including the court, and are often less expensive than the third-party investigation shops. They also are trained and accustomed in ascertaining facts and making determinations as opposed to cross-examining. Finally, they will less likely be seen as hired guns making findings to please the companies hiring them.

When there is a public scandal and the government wants it investigated, they turn to judges or retired judges to conduct investigations, not to practising lawyers. You should do the same.

By Howard Levitt

Got a question about employment law during COVID-19? Write to Howard at [email protected].

Howard Levitt is senior partner of Levitt Sheikh, employment and labour lawyers with offices in Toronto and Hamilton. He practises employment law in eight provinces. He is the author of six books, including the Law of Dismissal in Canada.

THIS ARTICLE ORIGINALLY APPEARED HERE: https://financialpost.com/fp-work/howard-levitt-dismissed-for-misconduct-without-an-investigation-you-might-be-out-of-luck?video_autoplay=true