In Merritt v. Tigercat Industries, 2016 ONSC 1214, the Honourable Justice D.J. Gordon ruled that an employer was not justified in terminating its employee for cause who had, among other things, been charged criminally with two counts of sexual assault against a minor. Justice Gordon granted the plaintiff employee summary judgment in the action and awarded him damages amounting to 10 months’ pay in lieu of reasonable notice.

The plaintiff employee was 67 years old at the time the summary judgment motion was heard. He was employed by Tigercat Industries Inc., an Ontario corporation, as a labourer, truck driver and material handler. He was originally hired by the corporate employer in 1998. He was fired on February 2, 2015, purportedly for cause.

While no written notice of termination was delivered to the plaintiff, oral reasons are said to have been presented to him pertaining to his discipline record, the impact or potential impact of his criminal charges on the reputation of Tigercat and his deceit regarding the involvement of other employees and other matters.

The plaintiff commenced a wrongful dismissal action, and eventually brought a motion for summary judgment. The motion judge noted that a straightforward claim for wrongful dismissal without cause is appropriate for summary judgment, but summary judgment motions may also be used to determine whether termination was for cause, depending on the evidentiary record.

In considering whether criminal charges and related reputational harm to the company warranted dismissal of the employee, the motion judge reviewed the specific circumstances of the employee’s charges.

Justice Gordon found as a fact that the plaintiff employee was arrested and charged with two counts of sexual assault against minors. Obviously, these are very serious and concerning charges. The trial is set to commence in September 2016, so the plaintiff, at law, was considered innocent until proven guilty. No evidence was tendered on the motion regarding the criminal allegations other than to note that they were related to off-duty incidents and the events did not occur in the workplace or involve other employees.

Based on a line of cases going back to 1947, the motion judge held that “criminal charges alone, for matters outside of employment, cannot constitute just cause.” The motion judge went on to find that improper conduct of an employee while not at work can only form grounds for termination with cause in limited situations — i.e., there must be a justifiable connection to the employer or the nature of employment.

The motion judge ultimately found that the termination was without cause because the employee was a general labour, as opposed to a “manager, professional, or senior employee”, and the criminal charges were not associated with his employment and did not involve other employees.

What Does This Mean for Employers?

This decision is a must-read for all employers, as it emphasizes the delicate nature of terminating employment contracts without notice for matters that occur when employees are off-duty and outside the four corners of the workplace.

Sexual assault of minors is perhaps the most repugnant crimes ever known — our children are the most beloved and cherished members of civilization. They are our hopes, our dreams and our future. They are also obviously the most vulnerable, which is why any crime against minors, in particular those of a sexual nature, are particularly obscene. The gut reaction of any employer to learn of a situation where an employee is criminally charged with one of the most repugnant crimes in the Criminal Code would surely be to terminate, for cause, effective immediately.

However, this case displays the other side of the coin as well: a party is innocent until proven guilty. Significantly, if the alleged crime — no matter how vile — takes place off duty without the involvement of other employees, and if the employee is not in a ‘front-line’ position to cause reputational harm to the company, then an employer may not be able to terminate for cause.

This decision begs the question: “Will Ontario courts arrive at the same decision if a similarly-situated plaintiff employee was convicted of sexual assault of a minor?”

Based on the analysis in this case, the answer is perhaps not, since the conduct would still have occurred off-duty, without any justifiable connection to the employer or to the nature of employment. The employee would also still be a non-managerial employee which would minimize reputational harm.

Read the full text of this intriguing case on the CanLII website – Merritt v. Tigercat Industries.