A summary dismissal proves costly: Firm didn’t fully investigate employee’s actions

Directed by his employer to wait at reception, Grant Bouma knew that trouble was afoot.

A 22-year employee with Flex-N-Gate Canada, Bouma was responsible for assuring the proper maintenance of the company’s plant equipment and facilities. As maintenance manager, Bouma was given considerable discretion to order thousands of pieces of material in the course of a year.

One day a production supervisor needed steel appropriate for erecting a safety barrier around one of the plant presses. In response, Bouma ordered 15 pieces of suitable material at a price of $481.

After the shipment arrived, a worker was directed by Bouma to use one rod to assemble a three-level patio table for his home.

Ron Howard, the manufacturing manager, was tipped off that personal work was being undertaken with company property.

He proceeded to locate a copy of Bouma’s purchase order. Believing that this type of steel was not normally used in the plant, Howard concluded that Bouma had put in the order for his personal benefit.

He proceeded to report his findings to Kevin Hamilton, the plant’s chief operating officer, who instructed Howard to summons Bouma to the plant. Bouma was to remain in the reception area until Hamilton was notified of his attendance.

When Bouma arrived, he was taken to Hamilton’s office. Bouma was confronted with the invoice and confirmed that a portion of the steel had been taken for personal use. Professing outrage, Hamilton reacted by swearing at Bouma, then firing him.

Bouma was then escorted off the premises.

Having left valuable work tools behind, Bouma frantically contacted Howard to retrieve them. Howard initially ignored Bouma’s calls.

Later,Bouma believed that some of his tools were stolen and Howard eventually informed Bouma that the police and the company’s insurer would be called. That did not happen nor were the tools returned. Bouma sued for wrongful dismissal.

Mr. Justice Gates of the Ontario Superior Court of Justice rejected Flex-N-Gate’s allegations of breach of trust and theft and found that Bouma’s use of one rod of the steel shipment did not constitute misconduct.

Had the employer carried out a full investigation rather than summarily dismissing Bouma, it would have discovered the common practice in the plant for material and scrap to be fabricated for personal use.

Because he required no permission in his managerial position to have such work done on his behalf, Bouma’s steel order was otherwise legitimate. Howard was ill-qualified to reach his conclusion to the contrary.

Indignant over his shabby treatment, the court awarded Bouma not only 20 months of salary, but also an additional four months of bad faith damages and $15,000 for punitive and aggravated damages.

To avoid this outcome, Flex-N-Gate would have been well-advised to have taken a more tempered approach to the allegations, as set out below:

1. An employer should carefully investigate allegations of theft or breach of trust against an employee.

2. If the allegation involves use of company property, determine whether the practice is common or condoned.

3. Avoid snap judgments before all of the evidence has been properly collected and considered.

4. Give the employee a full opportunity to tell his or her side of the story and investigate it.

5. Do not retain any terminated employee’s property for any reason.

6. Terminations should be conducted in a discreet manner, avoiding humiliation of the employee.

Howard A. Levitt is counsel to Lang Michener LLP. He is author of The Law of Dismissal in Canada and The Quick Reference to Employment Law, and editor-in-chief of The Dismissal and Employment Law Digest. He practises throughout Canada. He can be reached at hlevitt@langmichener.ca

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If you, or someone you care about, is dealing with employment law issues in the Toronto, Ontario Region, contact Lang Michener LLP.

This article is taken from an interview with Howard A. Levitt, Employment Lawyer at Lang Michener LLP , a Toronto, Ontario Employment Law Firm. Note that laws vary from province to province. Please consult with a lawyer in your own area to be sure of the laws and specific issues in your own jurisdiction.