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Let’s be Honest: the Importance of Honesty in an Employment Relationship

The Ontario Court of Appeal’s Decision in De Jesus v. Linamar Holdings Inc. (Camcor Manufacturing), 2017 ONCA 384

Background

The appellant, Ronald De Jesus (the “Appellant”), was employed by the respondent, Linamar Holdings Inc. (the “Respondent”) as a production supervisor. On or about October 8, 2013, the Appellant was terminated from his employment for cause after approximately 19.5 years of continuous employment. As such, the Appellant did not receive any notice or compensation in lieu of notice when he was terminated. The Respondent terminated the Appellant after a series of incidents that resulted in the Appellant allowing 1,500 defective camshafts to be processed with “roping” marks and then subsequently lying to the Respondent about what had transpired.
 
The Appellant brought an action for wrongful dismissal. The trial judge dismissed the Appellant’s action, finding that the Appellant’s failure to supervise and to take any remedial steps once the roping problem was brought to his attention, as well as the Appellant’s dishonesty about what had happened, went to the root of the employment relationship.
 
Accordingly, the trial judge found that on a balance of probabilities, given the facts, in combination with earlier disciplinary incidents with respect to the appellant, the Respondent had just cause to terminate the Appellant’s employment.

Issue

The Appellant submits that the trial judge erred on the following grounds:
  1. the trial judge reversed the onus, erroneously requiring the Appellant to prove that his employment had not been terminated for cause; and
  2. the trial judge was biased against the Appellant.

Ontario Court of Appeal’s Decision

Issue One: Revers Onus
 
The Appellant argued that the trial judge, in effect, placed an improper reversal of the employer’s onus on the Appellant. Particularly, the Appellant stated that this reverse onus was evident from the trial judge mistakenly accepting the Respondent’s probably exaggerated evidence that 1,500 defective camshafts were produced during the Appellant’s shift. As well, the Appellant argued that the Respondent’s used hearsay evidence to suggest that 604 of those defective camshafts had to be scrapped. The Appellant directed the Court to the end of the trial judge’s decision, at para. 163, which stated:  “On all of the evidence, the plaintiff has not met his onus that he was wrongfully terminated from his employment with the defendant.”
 
The Respondent, on the other hand, submitted that the aforementioned concluding sentence referring to “onus” must be read in the context of the entirety of the trial judge’s reasons.
 
The Court agreed with the Respondent’s submissions that it was apparent that the Respondent accepted the onus to demonstrate, on a balance of probabilities, that it had just cause to terminate the Appellant without notice or compensation in lieu of notice.  The Respondent did so in its written and oral submissions. Particularly, the Court noted that at trial, both counsel for the Appellant and the Respondent advised the trial judge that the Respondent bore the onus.
 
More specifically, the Court held that the trial judge applied the correct analysis for determining whether just cause has been established, as set out by the Supreme Court of Canada in McKinley v. BC Tel, 2001 SCC 38, [2001] 2 S.C.R. 161. After her analysis, the trial judge concluded at para. 150 that “Mr. De Jesus’ action for wrongful dismissal cannot succeed because Linamar had just cause to terminate his employment”.
 
Having regard to para. 150 of the trial judge’s decision, the Court found that the trial judge’s aforementioned statement at para. 163 just indicates to the fact that the Appellant was unsuccessful at trial. The Court found that the trial judge’s analysis did not in effect reverse the employer’s onus.
 
However, the Court found that the trial judge erred with respect to the trial judge’s acceptance of the hearsay evidence about the 604 scrapped defective camshafts.  Nonetheless, the error was not a palpable and overriding error because it did not affect the trial judge’s assessment of the evidence or her ultimate determination of the issues. Rather, the central issue was whether 1,500 defective camshafts had been produced during the appellant’s shift and not whether 604 of those camshafts were scrapped. The Court held that “[t]he trial judge found that the magnitude of the total number of defective camshafts, which the appellant allowed to pass uncorrected during his shift, taken together with his subsequent dishonesty about them, was the culminating event that formed the primary basis for his dismissal for cause” (para 11).
 
The Court found that the trial judge gave thorough and detailed reasons as to why she favoured the Respondent’s evidence to that of the Appellant’s, with regard to whether 1,500 defective camshafts were produced during the Appellant’s shift.  The Court noted that the manner in which the trial judge dealt with the evidence was consistent and supported by the evidence of the packer and the other supervisors who testified. Therefore, the Court confirmed that it was open to the trial judge to accept this evidence and to conclude that 1,500 defective camshafts had been produced during the appellant’s shift. As such, the Court concluded that there is no reason to interfere with the trial judge’s finding on this issue.
 
Issue Two: Bias
 
The Court first considered the recent case of Lloyd v. Bush, 2017 ONCA 252, [2017] O.J. No. 1559 [Bush], at para. 112, which reiterated the undisputed test for reasonable apprehension of bias, as summarized by the Supreme Court of Canada in Yukon Francophone School Board, Education Area No. 23 v. Yukon Territory (Attorney General), 2015 SCC 25, [2015] 2 S.C.R. 282, at para. 20 of that decision:
 
what would an informed person, viewing the matter realistically and practically – and having thought the matter through – conclude?  Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly?
 
Further and in consideration of Bush at para 113, the Court stated “the equally well-established principle that judges are afforded a strong presumption of impartiality that is not easily displaced, although that presumption can be rebutted by the trial judge’s conduct.” (para 15).
 
The Appellant submitted that the trial judge’s bias was evident from her negative reaction to his counsel’s failure to bring to the Court’s attention a decision of the Court that questioned a procedural ruling that the trial judge had made earlier. The Appellant further stated that the trial judge chastised his counsel, describing his failure to call the Court’s attention to the case as “bad advocacy.” The Court noted however, that once counsel for both the Appellant and Respondent apologized and explained that the failure to disclose the case was unintentional; the trial judge’s initial irritation instantly and completely dissipated. Further, the trial judge offered and granted Appellant’s counsel a recess to determine how best to continue his questions in light of the jurisprudence now before the Court.
 
The Court held that the aforementioned exchange and the other concerns raised by the Appellant do not demonstrate bias. Moreover, the Court found that there is no evidence of inappropriate treatment by the trial judge of the Appellant and his counsel.  The criticism from the trial judge does not amount to bias or give rise to a reasonable apprehension of bias. The Court found that the trial judge’s reasons for her findings were detailed and comprehensive, and amply supported by the record. As such, the Court dismissed the Appellant’s appeal.

Our Thoughts

The employee-employer relationship is fundamentally based on trust and honesty. An employee failing to be honest with their employer can amount to just cause for termination. With that said, an employer should be cautioned when considering to terminate an employee for cause. The employer still bares the onus of justifying that there was cause to terminate an employee. As such, any dishonesty would have to be severe to the point where the employment relationship is irreparably broken. From the above discussion, employees should be advised that failing to be honest about misconduct can compound the impact of the misconduct, particularly in the view of the Court.
 
The above article is for general information purposes only and does not constitute legal advice. If you have concerns with regard to the foregoing issues, please make an appointment with one of our lawyers or a qualified legal practitioner elsewhere.