Can an Employee be Fired for Cause Over a Jail Sentence?

Employers in Alberta can terminate an employee for any reason; however, in most cases, proper notice will be required. While it is possible to fire an employee without notice, the reason for the termination must be serious enough to withstand judicial scrutiny, or the employer could be liable for damages for wrongful dismissal. If an employee were to engage in criminal behaviour on the job, for example, such as stealing from the workplace or committing fraud, this would often be considered sufficient cause for termination without notice. But what about an employee who is convicted of a criminal offence unrelated to their employment? What rights does an employer have if their employee is sentenced to jail time which would prevent them from working for a long stretch of time?

This was the question raised in a recent employment hearing before an Alberta arbitration board, which held that an employer was justified in terminating an employee for cause after the employee was sentenced to two years in jail.

Criminal Records and Discrimination Under Human Rights Legislation

In some jurisdictions in Canada, past criminal offences or convictions are a ground protected by human rights legislation in an employment context. For example, in Ontario, one of the protected grounds in employment situations under the provincial Human Rights Code is a person’s record of offences. In Quebec, the provincial Charter of Human Rights and Freedoms goes further, saying an employee may not be dismissed due to the fact that they were convicted of a criminal offence if the offence is unrelated to their employment.

In Alberta, s. 7 of the provincial Human Rights Act lists a number of grounds for which a person is protected in employment situations. The list does not contemplate criminal convictions or past criminal records as a protected ground. Therefore, an employee who is dismissed as a result of being sentenced to jail would have difficulty objecting to the dismissal on human rights grounds.

It should be noted that this may be different when it comes to employment in a federally regulated industry such as transportation, banking, or telecommunications because employment in these industries is subject to federal regulation rather than provincial. The federal Human Rights Act protects against discrimination for “conviction for an offence for which a pardon has been granted or in respect of which a record suspension has been ordered”.

In the recent decision EPCOR Utilities Inc. v. Civic Service Union 52, the majority of a 3-person arbitration board found that an employer was justified in terminating an employee’s employment for cause after she was sentenced to 2 years in jail.

Employee with Long-Time Gambling Problem is put on Paid Leave

The employee, AB, had been with the Edmonton-based utility for nearly thirty years when she was charged with theft over $5,000 in 2019. AB had a long-term gambling problem and began to steal money from her elderly mother using e-transfers in 2017. She had taken approximately $220,000 by the time her brother noticed the transfers and contacted the police.

AB’s immediate supervisor was made aware of the charges in mid-April 2019 by another team member, and he contacted AB to discuss it. She was placed on paid leave, and her security credentials were revoked while the employer conducted an internal investigation.

Employee Sentenced to up to Two Years in Prison and then Terminated for Cause by Employer

In mid-June 2019, AB pled guilty and was sentenced to up to two years in prison. She was given two weeks to make arrangements before entering custody. AB met with a representative of her union and her employer on June 21, 2019. At the meeting, the employer provided AB with the option of early retirement, as she was one year away from eligibility for full retirement. She declined the offer and requested she be placed on unpaid leave to allow her to serve her sentence. The employer declined, and presented her with a Letter of Termination, effective immediately, citing frustration of contract as the cause. Since AB would be in jail for a considerable period of time, she would be unable to work and therefore unable to fulfill her obligations under her employment contract. AB ended up serving eight months total before her release when she was placed on parole and then probation.

Union Files a Grievance against the Employer claiming Termination for Cause was Unjustified

The Union initiated a grievance against the employer, stating that termination for cause was unjustified, severe, and in breach of the collective agreement. The Union’s position was that the employer should have allowed AB to take an unpaid leave of absence to allow her to serve her sentence, and then return her to work. The employer argued it had been justified in terminating for frustration of contract, and in declining an unpaid leave of absence.

Arbitration Board Upholds Termination for Cause of Employee with Nearly 30 Years of Service

A two-person majority of the panel sided with the employer, citing the nature of AB’s criminal actions as justification for the employer’s response. Interestingly, the final decision appeared to consider the nature of AB’s crime, rather than the employer’s right to terminate for frustration of contract. Noting that her criminal actions had been intentional, systemic, and carried out over a period of months or years, the panel held that it did not matter that the crime had been unrelated to work. The employer’s decision to terminate for cause in this situation was found to be “reasonable and fair”.

Dissenting Opinion: Employee’s Record of Service “Worthy of Protection”

One member of the three-person panel dissented, stating that the employer had failed to appropriately balance its interests with those of the employee. While placing the employee on an unpaid leave would have caused some inconvenience to the employer, leaves of up to twelve months were contemplated in the employee’s collective agreement. Further, the employer had provided no evidence that a leave would have resulted in a disruption of service or would have caused AB to have difficulty reintegrating into the workplace once her sentence was finished.

AB, meanwhile, had served the employer for nearly thirty years without any record of disciplinary issues. Given the competing interests of the two parties, the dissenting opinion held that the decision to terminate for cause was unjustified.

Contact DBH Law, Calgary Employment Termination & Wrongful Dismissal Lawyers

The lawyers and staff at DBH Law rely on our quarter-century of litigation and advocacy experience to provide our clients with pragmatic, strategic, and responsive legal guidance on various employment law disputes. We regularly advise both employees and employers on their rights and obligations with respect to termination and wrongful dismissal. We believe in relationship-building, and provide tailored, trusted, client-focused advice. Contact us online or by phone at 403-252-9937 to discover how we can help you today.