When privacy and confidentiality are important in a job, a manager's breach of confidence may provide just cause for termination. This is particularly true when the employer's policy emphasizing the confidentiality obligations is known to the employee. The BC Supreme Court recently affirmed these principles in Manak v. Workers' Compensation Board of British Columbia, 2018 BCSC 182 (PDF). The decision also highlights the significant value of a properly executed release if the employee later challenges an agreement made at time of termination.
M was terminated from her manager position at WorkSafeBC after 36 years of service. WorkSafeBC dismissed her for breaching their confidentiality standards. She was a Client Services Manager who also had responsibility for claims made by employees of WorkSafeBC – a highly sensitive position. Additionally, M was an ethics advisor, which meant she was a resource for employees for all matters relating to ethical conduct and WorkSafeBC's Standards of Conduct.
Allegations were made by an employee that M was sharing confidential information with subordinates by:
- disclosing details surrounding the termination of two employees prior to their termination;
- discussing information regarding the claims of two employees; and
- disclosing that a staff claimant had threatened to report the handling of his unresolved claim to Global TV when his claim was disallowed.
M denied all the allegations. WorkSafeBC suspended her while they investigated.
The allegations against M were corroborated by another employee. M then admitted that she may have discussed the possibility of a claim being reported to Global TV in circumstances where the comments could be overheard by staff. But she did not admit to the other allegations.
A few days later, M was terminated for just cause, without severance pay. However, WorkSafeBC offered her the option of retiring and receiving a lump sum retirement benefit worth about four months' salary, in return for executing a release. She was given 24 hours to decide. M decided to take the package and sign the release.
Two months later, M sued WorkSafeBC for wrongful dismissal.
M argued that even if all the confidentiality breaches against her were proven, this conduct was not so serious as to constitute just cause for termination. She argued that she had no history of discipline and there was no proof of actual harm stemming from the disclosure.
The BC Supreme Court did not agree with M. In deciding that that WorkSafeBC had just cause for termination, the court considered the important role of confidentiality in that organization. Specifically, M knew that a breach of the confidentiality standards could lead to termination. Hence her use of the phrase "I shouldn't be telling you this, but..."
The breaches were serious considering M's role as an ethics advisor and her responsibility for staff claims. The trust relationship between employer and manager was simply too broken.
M also argued that the release she signed should be set aside on the ground of unconscionability. The court disagreed, for the following reasons:
- The settlement was not a grossly unfair and improvident transaction.
- Although M failed to obtain independent legal advice, she advised WorkSafeBC that she had done so. She had the opportunity to seek legal advice and did not take it.
- While there was an imbalance in bargaining power, M was a manager, was aware of the nature of the dismissal process, and had time to consider the circumstances.
- Although M was given only 24 hours to make her decision to sign the release, this did not rise to the level of being taken advantage of by WorkSafeBC.
Lessons for Employers
Just cause: Just cause for termination is a high standard, particularly for long service employees. It is rare that a single incident will amount to just cause. This is, however, the second time in three years that a B.C. court has found that the breach of a confidentiality policy is just cause for termination of a long service employee. Courts seem to take seriously an employee's confidentiality obligations.
Execution of release: An employee should be provided time to consider a settlement offer and to seek independent legal advice. Insist that an employee not sign on the spot. The court in this case found that 24 hours was sufficient. We recommend providing a longer period of time, where possible, particularly where an employee is non-managerial and may be viewed by a court as vulnerable.