Manitoba Court of Appeal affirms that there is no duty for an employer to investigate before terminating an employee

  • July 21, 2021
  • Daniel Mulroy

A recent Manitoba Court of Appeals case, McCallum v Saputo Dairy Products GP (link) reaffirmed that there is no duty on an employer to investigate before terminating an employee.

The appellant, Patrick McCallum, was a sales representative for the respondent, Saputo Dairy Products GP (“Saputo”).  A part of McCallum’s role was to visit grocery stores and remove Saputo products that was unsaleable. The process of removing and disposing of the unsaleable products was to be conducted by store employees, not MacCallum.

In August 2015 McCallum visited a Superstore grocery store and removed Saputo products he claimed were unsaleable. McCallum took these products to his car to dispose of himself, claiming the trash compactor at the store was locked.

At his car, McCallum was stopped by a loss prevention officer for removing products from the store without paying. Loblaws contacted Saputo following this incident.

After receiving information that McCallum had “taken products from one of its customers stores without authorization,” Saputo terminated McCallum’s employment. Saputo did so without conducting an investigation to obtain further details of the incident. McCallum subsequently brought a claim for wrongful dismissal against Saputo.

The trial judge ruled that Saputo had just cause to terminate McCallum. On the balance of probabilities, the trial judge was satisfied that McCallum had tried to steal the products. Citing the Supreme Court of Canada decision, McKinley v BC Tel (link) the trial judge ruled that McCullum’s actions gave rise to a fundamental breakdown in the employment relationship and permitted Saputo to terminate his employment.

McCallum appealed this decision on the basis that the trial judge erred in ruling that Saputo was entitled to dismiss McCallum without a “rudimentary form of investigation.”

This appeal raised important issues in employment law such as procedural fairness in the termination of commercial employment.

The Manitoba Court of Appeal affirmed that in Manitoba, the employer does not have a common law duty to investigate prior to dismissing an employee. Since Saputo established just cause for termination at trial, “there is no legal consequence to Saputo for having failed to conduct a meaningful, or any, investigation prior to terminating [McCallum].”

However, if just cause is not established, the absence of an investigation, or an inadequate investigation, could result in damages for breach of contract, as well as potentially for punitive damages for the manner of dismissal.

In the decision, the Manitoba Court of Appeal cites decisions from across Canada, including Ontario, aligning with jurisprudence on the duty of procedural fairness. While this case is not binding in Ontario, it is persuasive and considered in Ontario courts.

Bakerlaw has an extensive employment law practice (link). If you think your employment was terminated without just cause, or because of your age, disability, gender, family status or any other protected ground, contact us (link).

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