Is your word your bond?

If it isn’t, watch out, because your employer holds most of the cards when it comes to the consequences of dishonesty in the workplace

Honesty between employee and employer is required in the workplace. Lying to one’s employer can destroy the basis of confidence, trust and fidelity required to sustain the relationship with the employer. The more trusted or responsible the position, the more sensitive it is to dishonesty.

Historically in Canadian employment law, any employee dishonesty would constitute proper grounds for dismissal. Dishonesty alone, once proved and without further inquiry, was sufficient. The underpinning logic was that dishonesty revealed bad character, and bad character was enough to justify dismissal for cause.

The hand in the company cash register is obvious dishonesty. Criminal dishonesty, even an isolated event, is always grounds for dismissal. Certainly, people in positions of heightened trust, such as financial industry workers and supervisors and managers, are more susceptible to standards of honesty strictly applied.

The employer has some powerful tools used in exposing dishonesty or bad conduct. Evidence of dishonesty can be contained in employee statements made under circumstances where the employer uses its authority to require the employee to submit to an investigative interview. This is a catch-22 for the employee. To refuse the interview could be insubordination allowing dismissal. To be dishonest in the interview could reveal character and allow grounds for dismissal. To be honest in the interview could elicit facts that reveal character and provide a basis for dismissal.

An example of cases decided under the old standard of dishonesty involved an incident in which an employee was accused of using the company calling card to make a personal long-distance call. Another involved an employee who came into an employer’s photo lab on an off day and developed several prints for a friend at an employee discount. This was sufficient revelation of character to allow dismissal for cause.

So, with the employer holding all the cards and zero tolerance for dishonesty, how can the employee survive a dishonesty allegation?

Recently, courts have revised the strict application of honesty standards in general dishonesty cases. The courts have devised a proportionality test for dishonesty cases. The test seeks to answer whether the dishonesty was so serious as to lead to the breakdown of the employment relationship. Under this new test, zero tolerance for dishonesty is no longer the law. Each employment relationship forms its own context for the necessary inquiry of the test. Further, while the old strict tests can still apply, they have fallen into disuse and have been replaced with the new test of proportionality. How has this new test played out?

Under the new test, a middle manager shoplifted $29 worth of goods from the employer’s store, but given the context of long service, the low value of the goods and the emotional state of the employee, just cause was rejected by the court. In another case, an employee lied about being late for a business meeting because he falsely said he was at the dentist. And in yet another instance, the employee lied to his employer about what his doctor said was his return to work date from disability.

In these cases, the courts rejected dismissal as the correct discipline, because the severity of the dishonesty did not result in a breakdown of the employment relationship.

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