When I was in grade school I completed a project on eastern cougars in Canada. One of the most notable traits of the feline is the fact that they are incredibly elusive. If you have ever spotted one, consider yourself one of the lucky few.

In a not-so-eloquent segue, successful terminations for cause are much the same. They are not just rare, they are only spotted in Canadian courts a few times a year.

One such time was in a case involving Brookfield Residential at the Court of King’s Bench in Alberta earlier this year.

According to the court decision, Brookfield is in the business of developing planned communities including the construction of new residential houses. Brookfield hired a Community Manager, Mr. Dell, who was responsible for managing sales and marketing processes for Brookfield’s community of Riverstone Estates in Calgary.

As part of its global operations, Brookfield implemented and trained employees (including Mr. Dell) on a number of corporate policies related to ethics and bribery, including a Code of Conduct and Ethics and an Anti-Bribery and Corruption Policy.

Dell worked out of a Show Home in Riverstone Estates where he sold semi-custom homes to clients and led them through the design and construction process.

While working in the Show Home, Mr. Dell was approached several times by a representative of California Closets. In March 2018, the representative advised him of an incentive program in relation to California Closets’ products.

Brookfield initiated an investigation after a senior Brookfield executive learned at an industry event that California Closets may have been offering incentives to Brookfield’s sales staff.

In the course of the investigation, Brookfield discovered that Mr. Dell had submitted change orders for two homebuyers to remove closet interiors from Brookfield’s construction scope and instead had their closets installed by California Closets.

Subsequent to its investigation, Brookfield concluded that Mr. Dell had violated the Code of Conduct and the Anti-Bribery Policy, and determined that the employment relationship had broken down to such a degree that continued employment was impossible. He was dismissed for cause.

The Alberta court upheld the termination for just cause. The court held that irrespective of whether or not Mr. Dell had actually received money or gifts from California Closets, the circumstances of allowing the California Closets representative to make multiple visits to the Show Home created the appearance of a conflict of interest.

In fact, the court noted that there was no evidence Dell solicited any bribes, however his relationship with California Closets triggered a duty to report the appearance of a conflict of interest to Brookfield. Brookfield was clear about the significance of such policies as all employees were required to perform annual training on them.

The court held that in those circumstances, the Code of Conduct required the former employee to take steps to address those concerns, and that he had failed to take any steps.

The court placed particular emphasis on the fact that Brookfield, as an employer with global operations and sensitive international relationships, concerned itself greatly with its reputation and that Brookfield had taken the time to implement policies about bribery and the appearance of bribery.

The take away from this case is obvious: don’t underestimate the power of good policy.

Many employers draft policies and distribute them, but take no steps to truly implement them at work or conduct training. Here Brookfield reinforced the significance of its policies by requiring annual training for its employees. The terms of the policies in turn became integral to terms of employment for its employees.

While many would not bet that a finding of cause would be upheld in this case, it is interesting to see how the law of cause is evolving in Canada. Perhaps this ground for termination will not remain so elusive after all.

Have a workplace issue? Maybe I can help! Email me at sunira@worklylaw.com and your question may be featured in a future column.

The content of this article is general information only and is not legal advice.

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