As anyone who has been keeping up with recent developments in employment law can attest, it’s becoming increasingly difficult to prove just cause for termination.

Consider cases like McKinley and Black v. Robinson Group. That was when the court held that an employer didn’t have just cause to dismiss a company accountant who gave herself unauthorized raises for four consecutive years. Cases like these make it clear that termination is like capital punishment of an employment relationship and as such, should not be meted out lightly.  

So where does that leave an employer with an employee who has been charged with a criminal offence? Are you obligated to await clear proof of guilt, i.e. a conviction? Or can you rely on reputational damage and/or disruption to the workplace to justify dismissal for cause? As always, the answer to these questions is: it depends.

However, a recent decision of the Ontario Superior Court of Justice, Kelly v. Linamar Corp. (“Kelly v. Linamar”), does provide some insight. 

Kelly worked as a supervisor in one of Linamar’s manufacturing facilities, located in Guelph, Ontario. He had been with the company for more than fourteen years and had no record of discipline. As a supervisor, Kelly was responsible for overseeing and instructing ten to twelve employees. He was a member of the plant operating committee and was also responsible for managing relationships with suppliers and customers.

In early 2002, Kelly was caught in an undercover cross-border Internet child pornography sting. He was arrested by the OPP and charged with possession of child pornography. 

The sting, dubbed by police as “Operation Snowball” was the subject of much media coverage, both locally and nationally and Kelly’s name was publicized, as was his association with Linamar.

In the days following his arrest, Linamar contacted Kelly to discuss the criminal charges and the future of Kelly’s employment with the firm. Within three days of the arrest, Linamar terminated Kelly’s employment, stating that, as a result of its internal investigation, Linamar had concluded that Kelly had engaged in “inappropriate conduct in relation to the community at large and children in particular”. Linamar took the position that, in light of its high profile in the community and active involvement in children’s charities, Kelly’s conduct had damaged Linamar’s reputation and legitimate interests and had even damaged employee morale. The company felt it had no other choice.  

In September of 2003, Kelly pled guilty to the charge of possession of child pornography and was later sentenced to three months, which was to be served conditionally in the community.

In January of 2004, Kelly brought an action against Linamar claiming that he had been wrongfully terminated. The action was heard in October of 2005. 

The court found that Kelly’s conduct had been sufficient to justify dismissal for cause, noting that Linamar seriously considered whether or not to terminate Kelly’s employment after learning of the criminal charges. The court accepted Linamar’s argument that Kelly had a duty to ensure that his conduct did not harm Linamar’s interests and that, by placing himself in a position where he could be charged with possession of child pornography, he had violated that duty.

The court also held that employer was entitled to take reasonable steps to protect its business reputations and that the termination of Kelly was reasonable under all of the circumstances, even though Kelly had admitted to Linamar that he had viewed child pornography from his home computer. The court went on to comment that a charge or conviction of possession of child pornography would not always be sufficient to constitute cause for dismissal. Rather, the unique facts of each case must be considered.  

Kelly v. Linamar was a somewhat surprising decision, especially when one considers Kelly’s long service, otherwise clean disciplinary record, and the fact that his misconduct was entirely outside of the workplace.

As an HR professional, how can you use the case law to help you determine whether or not dismissal for cause is appropriate when an employee has been charged with a criminal offence? Kelly v. Linamar, along with other decisions in this area, provides us with a rough checklist of factors to consider. 

What is the nature of the offence?
Where the crime is one of “moral turpitude”, as was the case in Kelly v. Linamar, then the Court may be more likely to find that termination is appropriate.

What is the potential for reputational damage to the employer?
If the charge has not been publicized within the community or does not reflect upon the nature of the employer’s business and/or charitable endeavours, then a Court may not accept the argument that the employer’s reputation is at stake.

What is the impact of the charge on the workplace?
In Kelly v. Linamar, Kelly’s fellow employees notified management that they were no longer willing to work under Kelly because of their moral aversion to the use of child pornography. Mr. Justice Herold specifically cited this as a factor in making his decision. When considering this factor, it will also be appropriate to examine the nature of the employee’s responsibilities. If he or she is not required to work with other employees, then the impact on the workplace may be minimal and termination may not be justified.

What is the likelihood that the employee actually committed the crime in question?
In an action for wrongful dismissal, employers who have dismissed employees charged with criminal offences are not required to prove “beyond a reasonable doubt” that the employee committed the offence. Rather, the employer must simply show that it is “more likely than not” that the employee engaged in the alleged conduct and that it was sufficient to justify dismissal for cause. For example, in Murphy v. Canadian Tire Corp., a 1991 Ontario case, the court upheld a dismissal for cause based upon an alleged theft from the store even after the employee was acquitted of the related criminal charges.

Was company equipment used in the commission of the crime?
Where the employee made use of company resources to further his or her criminal endeavour, termination for cause is more likely to be appropriate.

Is the employer potentially liable for the crimes of the employee?
Such liability could arise through the improper use of company equipment, i.e. computers, or through improper or negligent activities on company premises. Where the employee’s conduct puts his or her employer at risk for criminal liability, termination for cause will often be warranted.

Wherever possible, employers should seek an interview with the employee to discuss the charges. Failure to attend such meetings or to cooperate with an internal investigation could be sufficient to constitute cause for dismissal, even if the charges are proved to be unfounded.

 Before terminating an employee who has been charged with a criminal offence, consider the above factors. Make inquiries into the nature of the offence, potential liability of the company, and the likelihood that the employee did, in fact, commit the crime. Even where an employee has been charged with a serious offence courts will not permit employers to dismiss an employee for cause without carefully examining all of the relevant circumstances to ensure that the employee is not being further punished at a time when he or she is already particularly vulnerable.