Outside Activites as Just Cause for Summary Dismissal

One of the implied terms of any employment contract is that the employee will not do anything which is prejudicial or detrimental to the interests or reputation of the employer. Certainly, if an employee does something while in the course of his or her employment that is prejudicial (embezzling funds, for example), then no one is surprised by that employee's summary dismissal without notice or pay in lieu. Are there any instances however, where an employee's activities scope of employment and of working hours will justify the employee's summary dismissal?

The basic premise is that it will only be in a rare case that an employee's activities outside of his/her employment will justify a summary dismissal. In determining this issue, the Courts consider the nature of the position of the employee and the impugned misconduct. Let's look at one examples.

In Whitehouse v. RBC Dominion Securities, a 2006 Alberta case, an employee who was an investment advisor and a senior executive with RBC, got drunk and brought a prostitute to the employer's premises after work hours one night, as he had done previously. The employee and the prostitute got into an argument about the prostitute's fees. She refused to leave the office. The employee left the office, leaving the prostitute in the lobby of the office where she had access to documents. The prostitute used the lobby telephone and left a message on the voice mail of a random employee in the building and then left. The next day the prostitute called the employer demanding the balance of her fees. The branch manager asked the employee twice whether he had brought the prostitute into the office. The employee, by this time sober, denied it until he was confronted with the video tape evidence. The branch manager dismissed the employee without notice or pay in lieu of notice. The employee brought an action for damages and the employer counter-claimed for damages for damage to its reputation. The employee's action was dismissed. The Court found that the employer was justified in doing so for several reasons; the employee's conduct demonstrated lack of integrity, deficient judgment, dishonesty, untrustworthiness and a careless disregard for client and corporate confidentiality; the employee lied to the employer at a time when he was sober and knew what he was saying; this was part of a pattern of similar conduct and the employer was justified in requiring a strict code of conduct by those who are leaders in the company.

In some cases, the Courts have required that there be a nexus or connection between the off-duty conduct and the employment relationship. The conduct must either detrimentally affect the employer's reputation or cause other employees not to want to work with the individual or render the employee unable to carry out his/her obligations properly or adversely affect the employer's ability to efficiently manage its business. Conduct that does not really affect the employer's reputation will not normally justify summary dismissal. For example, in a 1986 Ontario case (Rhodes v. Zehrmart Ltd.) an employee who purchased a narcotic from another employee outside working hours, was found to have not prejudiced the employer or its reputation. Equally, another case held that an assault on a co-worker off company premises did not justify summary dismissal.

If you have been dismissed without notice or pay in lieu of notice for conduct outside of your employment, please contact me for a consultation.