Just Cause and Dishonesty: When Progressive Discipline Isn’t Enough

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When it comes to disciplining unionized employees, the rules are different – and often more complex – than in non-union settings. The terms and conditions of unionized employees are governed by a collective agreement, which contains a specific standard of “just cause” in order to justify the termination of employment. But determining whether or not an employer has “cause” isn’t the common law standard. It can be dependent on the nature of the misconduct, the seniority of the employee, the presence of mitigating factors and whether or not the employee has had the benefit of “progressive discipline” (that is, various disciplinary penalties leading up to termination) prior to the decision to terminate.

However, certain misconduct can be deemed to be of such a serious nature that the concept of progressive discipline, and even the presence of mitigating factors, will not assist a unionized employee in avoiding termination, or what arbitrators have called “the capital punishment of employment.”

Dishonesty can be one such example of this concept. In the case of Jericho Tennis Club v. Unite Here, Local 40, 2025 CanLII 17236 (BC LA) (“Jericho”) out of British Columbia, Arbitrator Allison Matacheskie held that dishonesty during an employer’s investigation and during an arbitration may, in and of itself, be grounds for termination, stating that “Dishonesty by an employee breaches the foundation of the employment relationship.”

What Happened

In Jericho, Unite Here, Local 40 was the union representing bargaining unit employees at the Jericho Tennis Club in Vancouver. The grievor was a maintenance worker. He was observed and photographed sleeping under blankets on a countertop in the club’s laundry room.

When confronted, the grievor told his supervisor that he was only joking by getting on the countertop and under the covers. He did not admit that he was sleeping. The union grieved his termination, claiming that it was too severe a punishment.

The Arbitration

The grievance proceeded to arbitration. In his evidence, the grievor changed his story and said that he admitted to sleeping when confronted by his supervisor. In argument, the union took the position that the grievor’s only error was that he took his break somewhere other than the designated break area. The union also denied that the grievor had changed his story and stated that he was forthcoming throughout the club’s investigation.

The arbitrator was not buying the union’s argument and instead, when assessing and weighing all evidence, found the club’s version of events more credible, citing several reasons for this conclusion. First, the union frequently refrained from contradicting the club’s witnesses on cross-examination. This included not cross-examining the grievor’s supervisor, who, aside from the grievor, was the only other participant who knows what the grievor said during the investigation.

Second, the union did not produce adequate evidence to support its argument. The club had two independent eyewitnesses and a photo of the grievor sleeping. Counsel for the club cross-examined the grievor and the union’s witnesses, who were found to be limited in their knowledge and often contradicted and undermined the union’s own argument.

The arbitrator found that it was more probable that the grievor was not truthful during the club’s investigation about the fact that he was sleeping and, as a result, was dishonest at the arbitration about what he had told the club.

In coming to the decision to uphold the termination of the grievor’s employment, the arbitrator acknowledged and described the seriousness of dishonesty in the investigation and, perhaps as importantly, at the arbitration. Notably, the arbitrator, in her reasons, wrote that, as the grievor was dishonest, she would have upheld the dismissal even without any prior history of discipline. The arbitrator, in saying so, did not even mention the fact that the grievor took a nap on the job.

Takeaways

The decision recognizes that employees have a positive duty of honesty and good faith to their employer. An employment relationship is a two-way street, built on trust. When this trust is broken, it goes to the fundamental viability of the employment relationship, even where there is no past record of discipline.

It is not an overstatement to say that, given the seriousness of the penalty of termination, most arbitrators will be careful to find just cause at grievance arbitration. But when the misconduct undermines the trust between employer and employee, the calculus changes.

Jericho serves as a reminder to employers to not only thoroughly investigate workplace misconduct but assess the employee’s response and reasoning, as well as the credibility of that response in light of the evidence. Even where the incident giving rise to possible discipline is relatively minor, dishonesty or an attempt to “fudge” the facts will not serve an employee well and may be the basis for additional discipline.

Given that an arbitration is essentially a trial where the rules of evidence apply, the integrity of the investigation and the documents supporting an employer’s conclusions are critical. They may be tested and cross-examined before an arbitrator, as will the credibility of the employer’s witnesses. In Jericho, the documentation of the investigation was lacking; however, thanks to the credibility of the club’s witnesses, the employer was still able to establish the steps taken and answers given during the course of their investigation.

Unionized workplaces are often complex places, with a third party (the union) required to represent the employee where discipline is involved. Process is important. Vigilance in collection of documents and evidence is key. Jericho demonstrates that where an employee seeks to end run the process, it may not work out as planned.

The Workplace Law Group at Aird & Berlis LLP provides strategic labour advice to help employers navigate union-related challenges, from resisting certification to managing collective bargaining and arbitration. Please contact the authors or a member of the team if you have any questions or require assistance.