Judge rules breach of confidentiality can allow for just cause dismissal

The British Colombia Supreme Court upheld the dismissal of a long-service employee

Judge rules breach of confidentiality can allow for just cause dismissal

by Cristina Tomaino

In a recent decision, the British Colombia Supreme Court upheld the dismissal of a long-service employee following a series of confidentiality breaches.

In this case, the plaintiff served as a Client Services Manager for WorkSafe BC – the Worker’s Compensation Board of British Columbia. In that role she was, in part, responsible for handling claims by other WorkSafe BC employees. Staff claims were understood to require a unique level of sensitivity and confidentiality and were controlled by managers rather than a bargaining unit employee in the manner that claims from the general public would be processed. Prior to her dismissal, the plaintiff had been cautioned by her director that information about staff claims should not be disclosed, even to other managers, without a proper business purpose.

As a manager, the plaintiff also served as an “ethics advisor” – a resource for fellow employees requiring assistance about any matter relating to ethical conduct and the applicable Standards of Conduct including the requirements regarding the treatment of confidential information. As an ethics advisor, the plaintiff received regular ethics training, and was required to complete an annual ethics declaration acknowledging that a breach of the Standards of Conduct could result in disciplinary action or termination.

Despite this training, the plaintiff was known to regularly share information about staff claims as well as management concerns and disciplinary issues. Eventually, an investigation was launched and the plaintiff was found to have breached the applicable Standards of Conduct regarding the protection of confidential information.

On April 19, 2011, the plaintiff was dismissed for cause; however, she was afforded the option to retire (the “Retirement Option”) and receive a lump sum benefit amounting to four months’ notice in consideration of her 36 years of service. She elected to proceed by way of retirement and signed a release indicating that she had received legal advice – even though she had not.

As we know, an employer cannot expect an assertion of just cause to be upheld unless the employee’s offending behaviour “fundamentally strikes at the heart of the employment relationship.” In determining that the employer had adequately established just cause in this instance, Justice Branch noted that given the plaintiff’s unique position of trust, the sensitive nature of the workplace, and the repeated instances of breach the employer had “reasonably concluded that the trust relationship was simply too broken.”

Justice Branch further held that although the plaintiff had not, in actuality, received independent legal advice before accepting the retirement package the release she had signed was still binding. The applicable test to set aside such a release, established by the Alberta Court of Appeal in Cain v. Clarica Life Insurance Co., includes four necessary elements:

  • a grossly unfair and improvident transaction;
  • the victim’s lack of independent legal advice or other suitable advice;
  • an overwhelming imbalance in bargaining power caused by victim's ignorance of business, illiteracy, ignorance of the language of the bargain, blindness, deafness, illness, senility, or similar disability; and
  • the other party's knowingly taking advantage of this vulnerability.

In this case, Justice Branch found that in light of the evidence as a whole – including the finding that the plaintiff had received legal advice prior to the Retirement Option being presented to her – the plaintiff was unable to meet the threshold of unconscionability.

This case highlights that just-cause dismissal, despite its high threshold, may be appropriate when dealing with breaches of sensitive or confidential information. Before taking such action, employers should consult with the team at CCPartners to determine whether a valid “just cause” case exists, or whether a different level of discipline or method of termination may be more appropriate.

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