The Manitoba Court of Appeal’s recent decision in McCallum v Saputo, 2021 MBCA 62, provided a much needed confirmation of the status of the law in Manitoba with respect to an employer’s obligations to an employee when dismissing for cause.
The primary issue considered by the Court was whether an employer has a freestanding, actionable duty to investigate the circumstances of employee wrongdoing prior to dismissing the employee.
The plaintiff had been a long-term employee of Saputo when he was accused of stealing product from a customer. He reported this incident to his supervisor, explaining that he was taking the product for a social and did not have or use the proper paperwork. Saputo has a donation policy by which employees can request product donations. This was not followed by the employee.
Saputo’s client also banned the plaintiff from its stores, which made up a significant portion of the plaintiff’s sales territory.
Without conducting any further investigation into these allegations, Saputo terminated the plaintiff’s employment relying solely on what he had told his supervisor. At the time of termination, Saputo had no information about how much product was alleged to have been stolen, its condition, or if any other, non-Saputo products were taken. In fact, there was Saputo competitor product taken, as well as Saputo product which was not part of the plaintiff’s responsibility.
Law and Decision
The Manitoba Court of Appeal affirmed the law as set out in Middelkoop v Canada Safeway Limited, (2000 MBCA 62); specifically that there is no independent, actionable duty on an employer to investigate prior to termination of an employment relationship for cause. Of course, a specific clause in an employment contract or collective agreement could alter this principle.
The Court also set out that even though there is no requirement to do an investigation, this course of conduct carries risk to an employer. If an employer fails to establish just cause at trial and did not do an investigation, the employer may be liable for punitive damages for the manner of dismissal.
On another note, the Court affirmed the doctrine of after-acquired cause and that an employer may rely on conduct that is not discovered until after termination of an employment relationship in order to justify that termination.
Since there was no duty to investigate that was independently actionable, the appeal was dismissed. The trial judge had said that he did not rely on after-acquired cause to come to the conclusion that the plaintiff was not wrongfully dismissed and so consideration of after-acquired cause was not necessary to dismiss the appeal.
- An employer has no duty to investigate prior to dismissing an employee for just cause; however, failure to investigate may lead to additional liability for damages if the employer is not able to prove just cause at trial.
- The doctrine of after-acquired cause remains good law in Manitoba.
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