David Strauss worked for Albrico Services (1982) Ltd. (“Albrico”) for approximately 16 years. Mr. Strauss was terminated for theft on June 13, 2002. Albrico alleged that Mr. Strauss charged gasoline on the company’s gas card for his personal use and not authorized to do so. Mr. Strauss was 47 year old at the time of termination and was a journeyman “insulator and metaller”. An “insulator and metaller” insulates piping, ducts, vessels, tanks, boilers and other similar types of apparatus in commercial buildings and industrial plants. There is no dispute that Mr. Strauss was a very skilled tradesman.
Albrico had offices throughout Western Canada. Mr. Strauss was at one point promoted to a supervisory position in Albrico’s Langley, British Columbia’s office. One of the perks of that position was a company vehicle and use of a company gas card for personal and business use.
In 2001, Mr. Strauss was told that he could not use the gas card for all purposes, but there was some factual dispute as to when Mr. Strauss was told that he could not use the company card at all. It was clear that the company did not keep good or any records. The Court found that there was a striking lack of policies or procedures. Some time in April, 2002, a principal of Albrico asked Mr. Strauss to return the gas card, phone and truck. Mr. Strauss returned the truck and phone but kept the gas card and used it to pay for personal gasoline costs. On June 13, 2002, Strauss was terminated for theft of gasoline. The Court went through the state of case law with respect to theft and confirmed that theft is a serious breach of the employment contract which warrants a dismissal. Referring to Ducharme v. England, a British Columbia case, the Court summarized the law (as of 1999) as it relates to theft as follows:
It is an implied term of an employment contract that an employee will not steal or commit criminal acts against his employer. When an employee commits such an act not only has he committed a breach of contract but more importantly has demonstrated a revelation of character incompatible with due and faithful discharge of his duty to his employer. Under these circumstances the employer is entitled to summarily dismiss.
However, more recent case law now obliges a Court to engage in a contextual approach, by analyzing all the circumstances surrounding an employee’s alleged misconduct, in order to determine if the dishonesty alleged amounted to just cause for termination without notice.
According to the Supreme Court of Canada’s decision in McKinley v. B C Tel, the Court held that “there must be an effective balance between the severity of an employee’s misconduct and the sanction the employer imposes”. The Court held that when theft is alleged, the Court requires a higher degree of probability, because of the stigma attached to it. Theft must be proven with clear, cogent and compelling evidence. The Court held in this case that Albrico must prove that Mr. Strauss intended to engage in the deceitful conduct and that conduct which is equally consistent with bad judgement, incompetence, lack of training, or simply raises a suspicion of lack of trust, may not be sufficient to establish dishonest intent.
Furthermore, the Court held that an employer must engage in a contextual approach in its investigation of the suspected dishonest conduct and its determination of the appropriate sanction. The Court held that Mr. Strauss’ behaviour was inappropriate. However, Albrico had not established clear, cogent and compelling evidence that Mr. Strauss stole gasoline. The Court in this case was very disapproving of Albrico’s lack of written communication, record keeping and policies relating to the gas cards. The Court also noted that Albrico was obligated to do a more thorough investigation and provide Mr. Strauss with an opportunity to explain his intention before summarily terminated him. In those circumstances, the Court found that Albrico did not have just cause to terminate Mr. Strauss.
GIVE WITH ONE HAND, TAKE AWAY WITH THE OTHER
The Court found that there was no cause to terminate Mr. Strauss’ employment and that Mr. Strauss was entitled to 16 months pay or $91,200.00. The Court reduced the award by the amount of employment income received from another employer approximately one year after the termination. The Court also had to deal with whether Albrico should get credit for any income Mr. Strauss was alleged to have received in running a business almost immediately after the termination from Albrico. In a twisted piece of irony, the Court found that Mr. Strauss’ complete lack of record keeping with respect to earnings received in that business could only result in a finding that the deposits made into his bank account were all income. Although Strauss indicated that net income in his business was negligible, he was unable to explain deposits of more than $85,000.00. As such, the Court held that the whole amount of $85,000.00 was income for which would offset monies Albrico owed to Mr. Strauss as a result of the Order in respect of notice. The Court therefore held that Mr. Strauss had completely mitigated his damages by receiving income almost exactly to the dollar that Albrico was ordered to pay.
This case demonstrates a number of important issues to litigants or potential litigants. Firstly, proving cause is difficult for an employer. The case also highlights that entitlement to damages are subject to mitigation. An employee cannot just sit back and expect to receive damages. A Plaintiff must undertake a diligent job search and any employment income received over the notice period will ultimately go to the credit of the employer. Furthermore, if an employee starts their own business, any employment income received from that business (net of expenses) will go to the credit of the employer.
This article is provided for information purposes only and does not constitute legal advice. Any individual questions or legal issues should be discussed with independent counsel.