Rules of Misconduct Prevail
Author: Daniel A. Lublin
Having been inadvertently overpaid for four years, when Huntley Zia disagreed with his employer’s actions in reclaiming the money, he took it to court. Zia’s lawsuit sent shockwaves around the B.C. offices of Telus Communications, where suing his employer while he was still employed was regarded as more than inappropriate; it was the last straw.
As part of a team of Telus employees sent to Thailand to implement a large telecommunications project, Zia objected to his level of compensation, making it known that he would leave the company if his request for additional salary were not met. Agreeing with Zia, Telus approved a “foreign allowance” increment to pay to him and the other employees while they were away.
Presumably satisfied with the additional foreign allowance payments, Zia did not raise the fact that they continued to be paid to him following his return from Thailand – and for the next four years – until Telus discovered the error, with the overpayment approaching $100,000.
An investigation ensued, with Telus concluding the foreign allowance payments were never meant to continue past Zia’s work in Thailand. Writing to Zia, Telus proposed to recover the money by making deductions from his pay over time. Zia remained defiant, arguing the payments were permanent, refusing to respond to proposed repayment options and incorrectly stating that any deductions from his pay would be illegal.
Seemingly fed up with Zia’s uncooperative manner, Telus began making unilateral deductions from his pay. Zia responded by filing a court claim seeking a determination of whether the payments were temporary or permanent and thus, whether Telus’s actions were appropriate.
Zia’s lawsuit while he was still employed was the last straw for Telus, which fired him for cause, for that very reason. At trial, Zia sought to justify his silence when the payments continued after he returned from Thailand by claiming the allowance was always intended to become part of his permanent compensation package. But a British Columbia judge disagreed, finding that Zia knew from the outset that the payments only represented a temporary allowance, similar to money he received for an earlier project he performed overseas.
Employees can be dismissed for cause when they commit a serious transgression, thus permitting the employer to end the relationship without any severance pay that would have otherwise been owed. In considering whether Telus had cause to dismiss Zia, the court concluded that Zia “knew” the overpayments were made in error and that by suing his employer while still employed he not only perpetuated the mistake but poisoned the relationship. Zia’s claim was dismissed and he was ordered to pay Telus the remaining money it had overpaid him as well as its legal costs.
The following lessons can be taken from this ruling:
- Suing your employer while still employed will not always amount to cause for dismissal: employees must come to court with clean hands or risk being disbelieved at trial.
- When participating in an investigation, even if it is not disciplinary in nature, ensure that all the information provided is full, frank and truthful.
- If money is mistakenly overpaid, don’t automatically assume your employer will be prevented from pursuing a court action to recover it.