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No Just Cause in Case Involving Sexual Harassment Allegations

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A recent employment case from the Supreme Court of British Columbia poses interesting issues related to just cause terminations. In Cho v Café La Foret Ltd, 2022 BCSC 1560 [Cho], the Defendant Employer argued it had just cause to terminate the Plaintiff’s employment because the Plaintiff had sexually harassed another employee. However, the Court ruled in favour of the Plaintiff, finding that the Employer did not have just cause for termination and awarding damages to the Plaintiff for wrongful dismissal.

The specific facts of the case were as follows:

While the Plaintiff was describing a massage he had received, the Plaintiff touched a female co-worker inappropriately on the back, shoulder, and buttock area.

After the incident, the Plaintiff admitted he had touched the victim inappropriately and he offered to apologize or resign.

In response, the Employer drafted an Affidavit and demanded the Plaintiff sign the Affidavit in order to keep his job. The Plaintiff refused to sign the Affidavit because he disagreed with its contents, specifically that it “made him out to be a sexual offender.”

The Employer then proceeded to dismiss the Plaintiff for cause.

Although portions of the victim’s testimony were disputed, the Court did conclude as a finding of fact that the Plaintiff’s actions were intentional and constituted sexual harassment. The Court also found that the Plaintiff’s actions were an abuse of his authority, as he was the victim’s direct superior.

However, these facts alone did not amount to just cause. The Court ruled the Employer had failed to meet its onus of demonstrating just cause, based primarily on the following:

On the spectrum of workplace sexual harassment, the established misconduct was relatively minor.

There was only one reported incident, and the Plaintiff was not provided with a warning or an opportunity to respond before being dismissed.

By choosing not to terminate the Plaintiff’s employment upon the completion of its investigation—and by asking the Plaintiff to sign the Affidavit in order to keep his position—the Employer clearly did not feel the employment relationship had irretrievably broken down.

The Court also found it was reasonable for the Plaintiff to refuse to sign the Affidavit because it was designed to be used for legal purposes, rather than to repair the relationship between the Plaintiff and victim. The victim had also indicated she intended to file a police report. The Court concluded that “the Employer effectively forced [the Plaintiff] to choose between incriminating himself and facing possible criminal charges as a result, or keeping his job.”

Not only did the Court award damages for wrongful dismissal, it also awarded the Plaintiff $25,000.00 in aggravated and punitive damages based on the Employer’s act of demanding that the Plaintiff sign the Affidavit, despite the significant legal jeopardy it would have placed him in.

Our Take:

In our view, one of the most important factual considerations in this decision was that the Employer had asked the Plaintiff to sign the Affidavit in order to keep his employment. The Court essentially treated this act as an admission from the Employer that the employment relationship had not been irretrievably damaged, which is a core requirement of the legal test for just cause.

On that note, the Cho decision provides several important take-aways:

First, after investigating workplace misconduct, the employer should come to a final decision as to whether corrective discipline or dismissal for cause is the appropriate sanction. Equivocation does not bode well for successfully upholding a just cause termination. Although an employer may be justified in requiring a letter of apology as a condition of continued employment (which has been upheld in a previous case), the Cho decision is a clear warning to employers that requesting a sworn legal document will not be appropriate.

Second, the Cho decision should be read cautiously by employers. It should not be interpreted as endorsing a “soft” approach to workplace sexual harassment. The Cho decision is an extremely rare instance in which a Court found that unwanted sexual contact did in fact occur, and yet the Employer did not meet its onus of demonstrating just cause. As discussed above, the Employer’s decision to demand the signed Affidavit was likely the fatal act for its defence. Given the factual finding that battery of a sexual nature had occurred, it is interesting to consider whether the outcome would have been different had the Employer decided to dismiss the Employee for cause immediately following its investigation. Employers have a duty to respond promptly to confirmed reports of sexual harassment. Failure to address such issues will run afoul of an employer’s workplace health and safety obligations and will also pose significant liability concerns.

Investigating and responding to workplace harassment issues can be a complex and burdensome process. If you require advice on how to navigate a workplace harassment situation, either as an employee or an employer, our team of experienced and knowledgeable employment lawyers are here to help. Please contact us today.

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