Courts sympathetic to employee dishonesty

Date: 2010
Author: Daniel A. Lublin
Publication: Metro
David Leitner could have made Pinocchio proud. But, as his employer Wyeth Canada recently learned, proof of workplace dishonesty may be present, but it seldom matters if the punishment doesn’t fit the crime.
Having conducted a random audit into employee expense claims, Wyeth determined that Leitner had lied on a number of his claims and that he knowingly submitted personal receipts for reimbursement.
Leitner was summoned to an unscheduled interview and asked to justify his actions. Leitner explained that, he disliked filling out expense reports and often submitted the claim long after the expenses were incurred and when his recollection of the expense had long since faded. Further, since some of the receipts were missing, he admitted to using personal receipts instead. Leitner adamantly denied trying to defraud the company. Instead, he pleaded that he was simply trying to get reimbursed for the money he spent.
Wyeth did not buy Leitner’s explanation. The company believed he was dishonest to the point of being fraudulent. Although the total cost of the expenses in question was less than $500, Wyeth fired Leitner for “just cause”.
The legal doctrine of “just cause” allows employers to terminate employees without notice or severance where their conduct is so grave, no employer should be expected to tolerate it. However, Canadian courts only consider the most severe forms of misconduct sufficient to meet this test.
Here, Ontario Superior Court Justice Romain Pitt found that Leitner’s termination for just cause was not justified. According to Justice Pitt, Leitner’s conduct was more akin to recklessness not fraudulence and Wyeth should have considered his long record of good service before firing him for just cause.
What can employees and employers take from this case?

  • Employees should challenge being terminated for just cause, even if they have engaged in some misconduct. Given the courts’ predilection for awarding severance, the ends often justify the means.
  • Similarly, employers should not terminate employees for cause where another form of discipline is more appropriate. I have won cases by showing a suspension was more suitable than dismissal.