There is a fine line between wrongful dismissal and termination for cause. Whether an employer is justified in terminating an employee on the grounds of misconduct is a question that requires an assessment of the context of the alleged misconduct. Specifically, the test is whether the employee’s misconduct gave rise to a breakdown in the employment relationship. This test was recently reviewed by the Ontario Court of Appeal in Fernandes v. Peel Educational & Tutorial Services Limited (Mississauga Private School), 2016 ONCA 468.

Facts

The employer, Peel Educational & Tutorial Services (the “School”), carried on business as an accredited private school, offering classes from pre-kindergarten through grade 12. The respondent employee, Remy Fernandes (“Fernandes”), was a teacher at the school for approximately ten years.

As an accredited private school, the School was required to follow Ministry policies with regards to assessment and evaluation of its students. School guidelines and policies were established pursuant to provincial curriculum expectation and achievement levels set by the Ministry. One such School policy was a prohibition on grades of “zero” or “blanks” subject to an exception for plagiarism. The School required its teachers to hand in “hard copy” grades by a certain date. These grades were then used to prepare student report cards. In order for the April 2009 interim report cards to be prepared, the School required grades to be submitted by March 3, 2009.

Fernandes initially submitted the hard copy grades on time. However, the document was riddled with blanks and calculation errors. Fernandes submitted the grades a second time on March 13, 2009. The grades again consisted of blanks and calculation errors.

Upon missing the date of his third extension, March 30, 2009,  Fernandes resubmitted the grades on April 3, 2009.

The School was “astonished” by Fernandes’ updated grades. Fernandes’ students had received “virtually perfect” grades. His class went from being one of the lowest graded classes to the best. Further, one of Fernandes’ students who had “significant educational issues” whom School employees had been monitoring, received grades out of the ordinary. Upon meeting with Fernandes, he admitted to falsifying grades. Fernandes was terminated on April 17, 2010.

Ontario Superior Court

Fernandes brought a claim for wrongful dismissal. At trial, the Court accepted Fernandes’ misconduct. These included:

• late grades;
• calculations for both student and class averages’ were incorrect;
• some grades were deleted in error;
• midterm progress report grades were not ready on March 3 2010 or on March 13 2010;
• gave full grades to students who had not completed their assignments even though he knew this was in breach of School policy; and,
• completely omitting certain test results.

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The Superior Court determined that Fernandes was wrongfully dismissed. Although the School was aware the grades were incorrect, they were still produced to students and parents without comment on their accuracy. Given that the school knowingly sent out false grades, those grades were not as serious as the School claimed at trial. Thus, the Court found that the Schools’ “punishment outweighs the seriousness of the infraction”. The School appealed the decision.

Court of Appeal

The Court of Appeal disagreed with the lower Court for several reasons.

First, though the Superior Court made the requisite findings in respect of Fernandes’ misconduct, the Superior Court failed to assess the seriousness of such misconduct. Fernandes’ behaviour went far beyond mere negligence or incompetence. Rather, by falsifying student grades and subsequently lying about it, Fernandes’ behaviour was both serious and intentional.

Second, the Court failed to consider the “surrounding circumstances”. Particularly, the Court failed to take into account factors relevant to the employer, including: the type of business engaged in, relevant School policies, Fernandes’ position and the degree of trust reposed in the Fernandes.

The Employer’s Circumstances

The School was a private school whose accreditation depended upon it meeting its obligations to the Ministry. If the School did not comply with the Ministry’s requisite standards, it could have lost its rights as an accredited school. Fernandes’ misconduct exposed the School to potential harm. Even though the School did not suffer actual harm, the Court of Appeal concluded that when assessing misconduct, it is the severity of the potential harm which must be considered and that actual harm need not be shown.

Given the nature of Fernandes’ misconduct, its potential harm to the School and the position of trust he occupied, the School board was correct in terminating his employment for cause.

Conclusion

This case is important in showing how an employer’s circumstances can justify termination for cause. When assessing an employee’s misconduct, it is important to look at the nature of the employers business and the potential harm caused by the employees behaviour. As the Court of Appeal makes clear, it is the severity of the potential harm to the employer’s business which will be considered when assessing misconduct and determining whether just cause exists.