Dowling v. WSIB, (2004) 192 O.A.C. 126 (CA)

• Judge: Catzman, Gillese and Lang, JJ.A.
• Court: Court of Appeal (Ontario)
• Case Date: November 26, 2004
• Jurisdiction: Ontario
• Citations: (2004), 192 O.A.C. 126 (CA)

Dowling v. WSIB (2004), 192 O.A.C. 126 (CA)

MLB headnote and full text

Temp. Cite: [2004] O.A.C. TBEd. NO.094

Michael Dowling (plaintiff/respondent) v. Workplace Safety and Insurance Board (defendant/appellant)

(C40220)

Indexed As: Dowling v. Workplace Safety and Insurance Board

Ontario Court of Appeal

Catzman, Gillese and Lang, JJ.A.

November 26, 2004.

Summary:

Dowling worked for the Workplace Safety and Insurance Board as Manager, Small Business Services. Dowling was authorized to make account adjustments with respect to premiums paid by employers. The Board dismissed Dowling. The stated reason was that Dowling used his position to obtain a direct monetary benefit. Dowling sued the Board for wrongful dismissal.

The Ontario Superior Court allowed the action, ruling that dismissal was warranted only if the evidence supported the Board's stated reason for termination. The Board appealed.

The Ontario Court of Appeal allowed the appeal. The question to be addressed was not whether Dowling used his position to obtain a direct monetary benefit. That is, the inquiry ought not to have been directed at assessing whether the reason for termination given by the Board had been proved. Rather, the question was whether all of the misconduct, considered in context, was sufficiently serious that it gave rise to a breakdown in the employment relationship.

Master and Servant - Topic 7505

Dismissal of employees - General principles - Procedure - The Workplace Safety and Insurance Board dismissed Dowling, stating that Dowling used his position to obtain a direct monetary benefit - The Ontario Court of Appeal ruled that the Board was entitled to dismiss Dowling - The court considered the fact that the Board did not follow its own policy on dismissal for cause in that it failed to give Dowling written notice of either the investigation or the fact that he might be subject to dismissal - It went without saying that the Board should scrupulously follow its own procedures in such matters - However, Dowling knew that an investigation was going on and he had ample opportunity in and between two interviews to explain his actions - The failure of the Board, in light of these considerations and when weighed against the misconduct, did not derogate from the court's view that Dowling's conduct was a sufficiently serious form of dishonesty to justify termination - See paragraph 75.

Master and Servant - Topic 7561

Dismissal of employees - Grounds - Conflict of interest - [See second Master and Servant - Topic 7566 ].

Master and Servant - Topic 7563

Dismissal of employees - Grounds - Dishonesty - The Ontario Court of Appeal discussed the standard to be applied when assessing whether an employee's dishonest conduct gave rise to just cause for dismissal - The court stated that the core question for determination was whether an employee engaged in misconduct that was incompatible with the fundamental terms of the employment relationship - The rationale for the standard was that the sanction imposed for misconduct was to be proportional -- dismissal was warranted when the misconduct was sufficiently serious that it struck at the heart of the employment relationship - This was a factual inquiry to be determined by a contextual examination of the nature and circumstances of the misconduct - See paragraphs 45 to 53.

Master and Servant - Topic 7566

Dismissal of employees - Grounds - Repudiation of contract of employment - [See Master and Servant - Topic 7563 ].

Master and Servant - Topic 7566

Dismissal of employees - Grounds - Repudiation of contract of employment - The Workplace Safety and Insurance Board dismissed Dowling stating that he used his position to obtain a direct monetary benefit - The Ontario Court of Appeal ruled that the Board was entitled to dismiss Dowling - The misconduct giving rise to the dismissal included: (1) Dowling's undisclosed purchase of computers at a discount from an employer registered with the Board and whose account he supervised; (2) Dowling's acceptance of $1,000 from a subordinate employee who represented employers and through whom Dowling purchased the computers; (3) lying about receiving the $1,000 - The court held that Dowling's misconduct could not be reconciled with his employment obligations - Acceptance of the money was a conflict of interest and in breach of the implicit and explicit terms of Dowling's employment contract - The lying was committed in the face of Dowling's obligation to act with integrity and impartiality in the discharge of his employment duties - The Board's Code of Conduct provided that violation of its terms could result in termination of employment - The trial judge found that the terms of Dowling's employment incorporated the Board's Code of Conduct and conflict of interest policy - Dowling was in breach of both - He repudiated the employment contract by engaging in conduct incompatible with the obligations that he owed thereunder - See paragraphs 61 to 75.

Master and Servant - Topic 7709

Dismissal of employees - Damages for wrongful dismissal - Deduction or "gross-up" for income tax - The Ontario Court of Appeal stated that the trial judge recognized the adverse tax consequences that would result from the plaintiff's receipt of the damage award as a lump sum and, in its view, correctly included a "gross-up" to offset the additional tax liability occasioned by receipt of the funds all at once, as opposed to over time - To fail to take into account the adverse tax consequences occasioned by a change in the timing of their receipt would be to restrict a person from realizing the full benefit of the damages awarded in a wrongful dismissal case - See paragraphs 76 to 79.

Cases Noticed:

McKinley v. BC Tel et al., [2001] 2 S.C.R. 161; 271 N.R. 16; 153 B.C.A.C. 161; 251 W.A.C. 161, consd. [para. 46].

Lake Ontario Portland Cement Co. v. Groner, [1961] S.C.R. 553, refd to. [para. 51].

Peet v. Babcock & Wilcox Industries Ltd. (2001), 142 O.A.C. 314; 53 O.R.(3d) 321 (C.A.), refd to. [para. 77].

Counsel:

John A. Campion and Nicole D. Samson, for the appellant;

Katherine A. Cotton, for the respondent.

This appeal was heard on July 19 and 20, 2004, by Catzman, Gillese and Lang, JJ.A., of the Ontario Court of Appeal.

The decision of the Court of Appeal was delivered by Gillese, J.A., and released on November 26, 2004.