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Does Employer Loss of Trust Justify Dismissal

2 minute read

Dismissal for cause is rarely found to be appropriate in the absence of employee misconduct with prior warnings and lesser penalties for similar misconduct. A recent decision in Alexander v. Huron Commodities Inc. follows this trend and found that that employer loss of trust cannot be the basis for dismissal in the absence of employee misconduct.

At the time of his termination, Mr. Alexander had been employed by Huron for about six years in the position of procurement and commodity originator. After his dismissal, Mr. Alexander applied for and was granted employment insurance benefits. In an interim award, Adjudicator Howard Snow concluded that the employer was therefore precluded from arguing that Mr. Alexander was dismissed for misconduct (see 2019 CanLII 11915 (CA LA)).

Mr. Alexander had no recorded discipline prior to his dismissal. However, the employer became concerned about his work performance, and about the amount of fuel he was using in his company vehicle. The termination letter gave no reason for the termination, but the employer said Mr. Alexander was dismissed because of “loss of trust”. The employer submitted that this loss of trust was sufficient to justify termination.

Adjudicator Snow commented in his decision that the notion of employer loss of trust in an employee being a stand-alone basis for dismissal was “novel”; and, concluded that employer loss of trust cannot be the basis for dismissal (or even discipline) in the absence of the employer proving misconduct. Moreover, if loss of trust is based on employee misconduct Adjudicator Snow held that one should “assess the misconduct and not the loss of trust” because at some level, “we lost trust” means nothing more than “we decided to dismiss”.

The decision shows once again that while a series of acts may result in a loss of trust, employers will want to get legal advice as to whether the circumstances will justify a “for cause” dismissal.

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