Generally, employee conduct outside of work will not justify discipline unless the conduct is wholly incompatible with the proper discharge of the employee's duties, or the conduct has caused severe prejudice to the employer or its interest. For employees in a position of trust, serious misconduct occurring outside of work will justify dismissal. In most cases, for discipline to be warranted, there must be a "nexus", or connection, between the off-duty conduct and the workplace.

Employers must consider: (1) the nature of the employee's duties, employer's expectations, and employment relationship; (2) the nature and seriousness of the employee's conduct; and (3) the impact of that conduct upon the business and reputation of the employer.

In some cases, actual harm need not be shown. In Kelly v Linamar Corp., [2005] OJ No 4899, the court found in favour of an employer who dismissed an employee charged for possession of child pornography. Being a crime of "moral turpitude", the court determined there was potential for harm to the company, one of the largest employers in the community, and its reputation for philanthropy and support for school children.

In Hyland v Royal Alexandria Hospital, 2002 ABQB 458, the defendant hospital terminated the plaintiff, the manager of internal audit, because of the plaintiff's questionable efforts to avoid paying GST on his personal vehicle. The defendant argued the hospital's credibility as a public institution could be affected if the plaintiff's conduct became public knowledge. The court agreed and concluded the maintenance of public confidence in financial accountability and regularity was important to the operation of the hospital.

Finally, while considering the affect on the employer's reputation, courts have examined the effect of the employee's misconduct on the perceptions of the employer by other employees. In Whitehouse v RBC Dominion Securities Inc., 2006 ABQB 372, the court considered how perceived tolerance of the offending employee's actions could seriously infect the working relationship in the office.

In the union context, adjudicators have relied on Re Millhaven Fibres Ltd. and Oil, Chemical and Atomic Workers I.U Loc 9-670, [1967] OLAA No 4, which sets out five conditions to justify the termination of an employee for off-duty conduct:

1. The employee's conduct harms the company's reputation or product.
2. The employee's behaviour renders the employee unable to perform their duties satisfactorily.
3. The employee's behaviour leads to refusal, reluctance or inability of the other employees to work with him or her.
4. The employee is guilty of a serious breach of the Criminal Code, causing injury to the general reputation of the company and its employees.
5. The employee's conduct makes it difficult for the employer to properly carry out its functions of efficiently managing its work and efficiently directing its workforce.

If one or more of the above questions is affirmatively answered, then an employer is justified in its concern with an employee's conduct, regardless of whether it occurred on or off the company property or in or out of working hours: OPSEU v Ontario (Ministry of Natural Resources), [2008] OGSBA No 102; Tobin v. Canada (Attorney General), 2009 FCA 254.

When it comes to an employee's conduct outside the workplace, there is no clear plan of action in every case. There are times when an employer may insert itself into the lives of employees outside the work environment free of repercussions. In some cases, failure to enter the "bedrooms" of their employees by not investigating or disciplining serious misconduct may bring severe consequences for the employer. It is important for each employer to take all alleged misconduct seriously, investigate fully and fairly, and take into account the considerations set out above to protect employees and their work environment while limiting exposure to potential actions.

Note: This a reprint of an article by Cole L. Lefebvre of Miller Thomson LLP.