Baker v Weyerhaeuser Company Limited, 2022 ABCA 83 is a new decision where the Alberta Court of Appeal found an employer did not have just cause to dismiss an employee, despite some proven performance issues and even an incident of dishonesty. This is the same conclusion reached by the trial judge.
The case is interesting because dishonesty is often (if not usually) just cause on its own. However, in this case the Alberta Court of Queen’s Bench and Court of Appeal were very concerned that the true motivation of the employer to discipline and ultimately terminate the employment of the employee was a vendetta by his manager. One other odd tidbit is that the Court of Appeal upheld reasoning by the trial judge that bad faith in termination was a valid factor for consideration of the reasonable notice period.
Facts
Below are the pertinent facts found by the Alberta Court of Appeal:
- The employee Mr. Baker worked for the employer Weyerhaeuser from 2002 to 2010 in Ontario, and then again from May 2011 to December of 2015
- At the end, Mr. Baker’s role was “sawmill supervisor”
- The employee’s performance reviews had been historically strong, including in 2014
- In late 2015, a new manager – named Mr. Cheeseman- transferred to the employee’s location and the employee started reporting to him
- In November, 2015, Mr. Cheeseman told the employee no one in management or on the crews liked him
- The employee did not like Cheeseman, and Cheeseman perceived the employee as someone who did not respect him
- From mid-November to the end of December, 2015, the employee had several incidents occur which reflected poorly on his performance, and he had a written warning
- One of the incidents involved a small fire in the mill on the employee’s shift (which is very serious), and an incident of the employee “cleaning up” the paperwork so he would get in less trouble
- There was an investigation done by the employer, and then the employer terminated employment
The Court of Queen’s Bench found in the trial that although there was misconduct, it was overshadowed by a poor investigation and the fact that the employee was under constant scrutiny by Cheeseman
Analysis / Conclusion
The employer argued on the appeal that the trial judge did not apply the McKinley test for just cause termination correctly, because the trial judge was focused on Mr. Cheeseman’s motivations and actions when it should have focused on the severity of the employee misconduct. The ABCA disagreed, finding that the trial judge had considered all of the evidence, which included Mr. Cheeseman’s motivations:
[50] […] The trial judge properly considered all of the trial evidence in assessing whether there was just cause for termination; that she found Mr Cheeseman’s November 2015 emails advocating termination without cause to be more persuasive than his after-the-fact justifications for termination with cause, was within her purview.
[51] The trial judge reasonably concluded Weyerhaeuser’s termination of Mr Baker, as rooted in the complaints of Mr Cheeseman, was in “bad faith and blown far out of proportion” considering Mr Baker’s long-time employment and his record. […] the trial judge had regard to Mr Baker’s record as a good, hardworking employee and did not agree that a continuing employment relationship was impossible and, as such, did not find that dismissal without notice or pay in lieu of notice was warranted […].
[52] To reiterate, the three-step analysis from McKinley requires the court to first determine the nature and extent of the misconduct, then consider the surrounding circumstances for both employer and employee, before finally determining whether dismissal is warranted as a proportionate response. The question to be answered is whether the misconduct is sufficiently serious that it gives rise to a breakdown in the employment relationship. As the trial judge found, Mr Baker’s termination was quick, without a proper investigation, an assessment of his record or considering other alternatives stipulated in Weyerhaeuser’s discipline policy. The onus was on Weyerhaeuser to show cause for dismissal, and on the found facts which included that the true motivation by Mr Cheeseman was personal acrimony, the trial judge determined it failed to do so.
The Alberta Court of Appeal also upheld the Court of Queen’s Bench finding of a 1-year severance award. It is not surprising that this discretionary severance was upheld, but the reasoning is quite surprising:
[54] While the trial judge’s reasons for awarding one year’s notice were extremely brief, her determination is supported by the facts found related to Mr Baker’s termination. This included that the decision to terminate had been made in “bad faith” and was out of proportion to Mr Baker’s otherwise good employment record. In all the circumstances, we find no reversible error in the trial judge’s award of damages and we decline to make any adjustment. [emphasis added]
This reasoning is will be very surprising to many modern employment law practitioners, because “bad faith” is not typically allowed to be used by a court to extend the severance period.
My Take
The fact that Mr. Cheeseman’s vendetta against Mr. Baker was considered so important in the reasoning on just cause is quite significant. I have trouble reconciling that with most of the caselaw which would not have given that factor so much weight, except perhaps for the limited purpose of showing problems with the investigation. I think this case may end up being used for the proposition that a procedurally fair investigation requires the investigator to consider whether an accuser or manager animosity towards the employee when considering the weight to give to their allegations.
Now regarding “bad faith”. It used to be common for bad faith conduct to simply extend the severance period, especially after the Supreme Court of Canada decision Wallace v United Grain Growers, [1997] 3 SCR 701 which was the leading case on that subject at that time. However, the later Supreme Court of Canada decision of Honda Canada Inc. v Keays, 2008 SCC 39 explicitly directed that the practice of tacking months on to a notice period due to bad faith termination was incorrect. With this new Baker v Weyerhaeuser case, perhaps the ‘ole “Wallace Bump” is coming back around!
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