Objectively Serious Misconduct Not Enough For Just Cause?

In O’Brien v San Forestry Ltd., 2024 ABESAB 16, a truck driver engaged in misconduct but the termination of employment was found to be without just cause and he was entitled to termination pay.

This case is important because it demonstrates the high threshold employers must meet when establishing just cause for termination under the Employment Standards Code. Additionally, the decision contains useful information for employee’s seeking wages through the Labour Standards Complaint process, and the common law principles that apply when resiling resignations.

Facts

The following facts are a brief overview of the case history leading up to the final appeal before the Alberta Labour Relations Board:

• The Employee James O’Brien was employed by the Employer San Forestry as a truck driver from November 1, 2022, until he was terminated, purportedly for just cause, on February 2, 2023
• He did not receive any severance pay
• Following his termination, the Employee filed an Employment Standards Complaint with the Alberta Employment Standards Office seeking wages, vacation pay, general holiday pay and pay in lieu of notice (severance pay)
• The initial Employment Standards Officer dismissed the Employee’s complaint
• The Employee appealed that decision pursuant to Section 88 of the Employment Standards Code (the “Code”) to the Director of Employment Standards, and the Director of Employment standards referred the matter to a Reviewing Officer
• The Reviewing Officer also dismissed the employee’s complaint, but directed the Employer to provide the Employee with pay in place of notice of termination (the “Order”)
• Both parties sought to appeal the Order
• The Employer argued it had cause for termination, so the Employee was not entitled to pay in place of notice of termination. The employer also argued the Employee had resigned and therefore was not owed any notice or termination pay
• The Employee argued that he was still owed wages, vacation pay, and general holiday in addition to the pay in lieu of notice
• This brought the matter before the Alberta Labour Relations Board (the “Board”) pursuant to section 95(2)(b) of the Code, which requires a de novo hearing, meaning a new hearing

The following sets of facts were heard by the Board:

• The Employer was engaged in the forestry business, and employed truck drivers to haul timber
• These truck drivers were legally required to keep detailed log books recording when and where the trucks are fueled, kilometers travelled, hours spent driving, truck maintenance and other important details
• Employers can face consequences if they fail to record and produce these logbooks when requested by regulators
• One important regulation is the requirement that truck drivers do not exceed 13 hours of drive time in any given shift, and may only work a maximum of 15 hours per day, as well as obtain 8 hours of rest between said shifts
• The Employee was from Ontario
• Prior to his move, he had spoken with 3 trucking companies about coming to Alberta for work, and was advised that $500 a day was the standard pay for truck drivers
• The Employee accepted a job offer and moved to Alberta for the job
• This first Alberta job he took did not work out, but was soon employed with the Employer San Forestry on referral from that first job
• The Employer San Forestry and Employee negotiated the terms of a truck driver position that included the Employee’s room and board at a bungalow owned by the Employer
• After he started, the Employee alleged that the Employee treated him poorly and was not paid what was expected
• The Employee gave notice to the Employer on January 24, 2023 stating that February 15, 2023 would be his last day
• In response, the Employer texted the Employee back nothing that there was no work on February 15, 2023 and stated “so I’m guessing [your] last day will be the 14^th?”
• Following this the Employee stated that his relations with the Employer began to improve and that he no longer wanted to quit
• The Employee texted the Employer staying “I’ll be staying”
• The Employer responded back by advising the Employee that another truck driver would be moving into the second available bedroom in the bungalow but did not address the Employee’s employment status
• The Employer stated that the Employee failed to complete his logbooks properly, engaged in safety violations, and behaved inappropriately, yelling and swearing at both her and at other employees and people he interacted with on his drives
• The Employee acknowledged that he did get angry and frustrated from time to time and that he did yell and swear on occasion
• On February 2, 2023, the Employee’s truck broke down and he had to wait some time for a mechanic to reach him
• By the time the repairs were complete, and he was able to get back on the road, the Employee had been on shift for a long time and the Employer was concerned about him exceeding the 15-hour shift restriction
• The Employer told the Employee to sleep in the truck’s sleeping berth and to complete the job after resting
• The Employee did not want to sleep in the truck berth, so he decided to forgo the load and drive home to sleep in his bed
• The Employer stated that when she directed the Employee to sleep in their berth and complete the load after 8 hours of rest, the Employee used vulgar language and disobeyed her direction by driving home and leaving the job unfinished
• The Employer stated that while she initially supported the Employee staying until February 15, 2023, she could no longer support his inappropriate behavior and disregard for safety measures
• As a result, the Employer terminated the Employee on February 2, 2023 and alleged just cause

Analysis / Conclusion

The Board identified 3 main issues:

• What wages and vacation pay, if any are owing?
• Did the employee resign?
• Is the employee entitled to pay in place of notice of termination?

With respect to issue (1), the burden of proving that wages are owed beyond those already received falls on the Employee making the claim. The evidence put forward by the Employee was ultimately rejected for the following reasons:

• His assertion that the “standard” wage in his industry was at least $37 dollars per hour or $500 per day was based mostly on private conversations he had with other trucking companies prior to his move to Alberta who “all agreed” this was the standard. He also referenced a Kijiji add that said the same, but failed to produce the add.
• Even if an industry standard had been established, the Employee failed to demonstrate that the industry standard would have applied to his job with the Employer. When the Employee initially came to Alberta, he was first employed with a different trucking company that had larger trucks and therefore a heavier load capacity which increased potential revenue. The Employer in this case operated much smaller trucks with a lighter load capacity.
• The Employee was unable to produce any sensical records containing calculations of the wages owed, records which should have been in his possession, as logging hours, and other details of his work was a requirement of the job.
• The Employee’s evidence on the wage agreement with the Employer was riddled with inconsistencies and contrary to documentary evidence which indicated that the Employer would pay the Employee 32% of the Employer’s earnings and that the Employee “should” make $400-$500 a day granted he did not miss any loads when hauling “winter weights”.

The Board concluded that on this evidence, the Employer and Employee were engaged in an incentive-based wage. Under the Code, incentive-schemes are permitted provided that the Employee’s wage at least meets the minimum wage requirements. In this case, the Employer was able to produce records that it did. The Board concluded there were no outstanding wages owed.

On issue (2) the Employer argued that because the Employee initially resigned on January 24, 2023, the Employer was entitled to expedite the Employee’s resignation so long as it gave the Employee the notice or pay in place of notice of termination that it would have been required to give to terminate the Employee’s employment without cause, which she argued was 1 week.

The Board rejected this, turning to the case of Robinson v Team Cooperheat-MQS Canada Inc, 2008 ABQB 409, which holds that an employee may resile from a resignation provided the employer has not relied upon that resignation to its detriment. In resiling from his resignation on January 31, 2023, the Employer’s response simply stated that another truck driver would be moving into the spare room. She otherwise did not acknowledge the resiled resignation. Since there was no evidence to suggest that the new truck driver she was boarding was intended to replace the Employee, the Employer here failed to establish that she relied on the Employee’s resignation to her detriment. The resignation was valid.

On issue (3), section 55(1) of the Code provides that an employer wishing to terminate an employee’s employment must provide the employee with termination notice, termination pay, or a combination thereof. The exception to this rule is where the employee is terminated for just cause, or where the employee has been employed less than 90 days.

The leading authority on termination for just cause is McKinley v BC Tel, 2001 SCC 38 which requires that the Employer establish, on a balance of probabilities, that the Employee engaged in some form of misconduct and that dismissal is the proportionate response in the circumstances. The employee’s behavior must be such that the employment relationship can no longer viably subsist.

Interestingly, the Board in this case found that while it was true that the Employee did engage in serious misconduct on February 2, 2023, by refusing the Employer’s orders, forgoing a load, and driving their truck past the 15-hour shift limitation, termination was not appropriate in the context of the specific employment relationship.

Evidence heard by the board detailed numerous occasions wherein the Employee would explode into aggressive bouts of anger, swear and yell at his Employer and others, fail to provide detailed logbooks, and fail mechanical inspection on his truck. Despite the Employer warning the Employee that this behaviour would not be tolerated further, the evidence showed that the Employer did just that: allowed the bad behaviour to persist undisciplined. This sent a very mixed signal to the Employee about the Employer’s view of safety issues and his assessment of the Employee’s performance in general. Since the Employer had tolerated similar serious misconduct before with no consequences, it follows that the employment relationship could viably subsist. As a result, dismissal for this incident was not deemed proportionate and the Employer owed the Employee pay in lieu of notice in the amount of 1 week per the Code.

My Take

When advancing a claim for wages, it is important that you are prepared to show your work. Evidence based on private conversations, internet ads, or other sources that cannot otherwise be verified except by your own account will not be enough to satisfy a Board.  Further, it is imperative that any calculations regarding wages owed be backed by legitimate accounts of hours worked. This is why it is best practice to document and record important details like hours and overtime throughout the course of employment.

I am not surprised the Board rejected the employee’s evidence on wages in this case; however, I do note that the Employee was self-represented, and there is a possibility that a different result may have been obtained for him in the event he had counsel.

This decision also reaffirms that resiling a resignation is a perfectly acceptable action and should not impact the employment relationship unless the Employer has relied upon the resignation to their detriment (by hiring a replacement employee for example).

However, what’s most interesting to me about this decision is the Board’s increasingly tough stance on the availability of for cause terminations, and to me, borrows legal principles from contract law in course of dealing.

Objectively serious misconduct may not be enough to terminate for cause if the serious misconduct was tolerated by an employer for the duration of the employment relationship, especially if the serious misconduct went unpunished. Ultimately, this case shows just how important context is when assessing for cause terminations and effectively holds the employer accountable for their role in serious employee misconduct. I do wonder, however, how this decision, which effectively finds that the parties tolerated a toxic and unsafe work environment to the point in which serious misconduct was not enough for a just cause dismissal, might factor into other areas of the law dealing with poisonous work environments. It remains to seen.

Alexis Sine is an employment lawyer at Bow River Law in Calgary, Alberta.

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