Court of Appeal upholds Decision to Terminate Employee for Failure to Apologize for Inappropriate Comments

In the case Hucsko v. A.O. Smith Enterprises, [2021] O.J. No. 6307, a long service employee was terminated for cause following an investigation into allegations of sexual harassment and his refusal to apologize for the misconduct.

Leading up to the termination of employment, there were several incidences of inappropriate conduct ranging from asking a female co-worker whether she danced on the tables at a managers’ meeting to inviting the employee to sit on a male co-worker’s lap to obtain information about a project.  There were other vulgar, inappropriate comments and gestures made by the male employee to the female co-worker.

A complaint was made to HR, and an investigation followed. The investigators determined that harassment had occurred. The employer sought to give the employee corrective training, and for the employee to apologize to the complainant. The employee sought legal advice, his lawyer responded and indicated that he would take the training but would not apologize.

The employer suspended the employee and subsequently terminated the employee’s employment for cause. The employer stated that there was “an irreparable breakdown of the employment relationship” based on:

1. Making inappropriate and vexatious comments to a co-worker;
2. The failure to show remorse; and
3. Willful insubordination based on a refusal to accept and comply with corrective action determined to be appropriate.

At trial, the judge determined that it was not necessary to categorize the comments made by the plaintiff as sexual harassment or not. The trial judge determined that the employee’s conduct did not justify the termination of the plaintiff’s employment for cause. The Court noted that the employer did not dismiss the employee because of a finding of sexual harassment. Rather, it was because of the employee’s serious and willful insubordination in response to a direction from the employer to undergo training and provide an apology. The judge also concluded that the decision to consult a lawyer was a factor in the decision to terminate the employee’s employment.

On Appeal, the Court of Appeal reversed the decision and determined that the employer had cause to terminate the employee. The Court determined that the judge erred for three reasons:

1. The judge made an error of fact finding when he did not conclude that the employer did not conclude the four comments did not amount to sexual harassment;
2. The judge failed to correctly apply the test for determining whether the employer had just cause to dismiss the employee; and
3. The judge failed to find that there was just cause for termination of employment.

In respect of the first issue, the Court of Appeal determined that the judge made an error of fact when he stated it was unclear whether the employer had determined that the comments constituted sexual harassment. The Court also determined in the decision that the comments did constitute sexual harassment.

In respect of the second issue, the Court determined that the test for cause was not correctly applied. The Court laid out the test for cause as whether the employee has engaged in misconduct that gave rise to a breakdown in the employment relationship or that was irreconcilable with sustaining the employment relationship. The Court outlined a three-part test for determining whether cause was justified as follows:

1. Determining the nature and extent of the misconduct;
2. Considering the surrounding circumstances; and
3. Deciding whether dismissal is warranted.

At the first step, the nature and misconduct must be determined, and the employer is entitled to rely on wrongdoing by the employee that is discovered both before and after termination. The second step considers the employee within the relationship, including age, history, seniority, role and responsibilities, and for the employer the type of business and any policies and practices, the employee’s position in the organization and the degree of trust reposed in the employee. The third step assesses, whether the misconduct is reconcilable with sustaining the employment relationship, and whether the misconduct is sufficiently serious that it would give rise to a breakdown in the employment relationship.

Applying these to the case, the Court of Appeal determined that the first step included consideration of the sexual harassment gestures and comments, and the refusal to apologize. The trial judge had to consider whether the comments amounted to sexual harassment or not. The refusal to apologize could not be considered in a vacuum, rather all of these factors had to be considered contextually.

The Court also determined that the trial judge failed on the second step, in that there was no consideration of important factors such as the Workplace Harassment Policy of the employer, the recent training, the degree of trust, or the senior position the employee held.

On the third step, the Court determined that a the failure of the employee to issue an apology, and show remorse for the serious conduct, the employer could have only reached one conclusion in the circumstances: (i) that the employee was unwilling or unable to understand the purpose and effect of the Workplace Harassment Policy and take its requirements seriously; or (ii) that the employee was unwilling to accept the discipline imposed on him as a consequence of his misconduct of sexually harassing a co-worker. The end result being that the employer could have no confidence that the employee would not continue with the same type of conduct in the future. As a result of the lack of contrition, lack of understanding of the seriousness of the conduct, and the failure to comply with an essential requirement of an apology to the complainant, the Court found that the employer’s decision to terminate the employment for cause was justified.