2013 NBCA 13, 2013 NBCA 13

COURT OF APPEAL OF NEW BRUNSWICK 64-12-CA/ 65-12-CA ASURION CANADA INC. APPELLANT ASURION CANADA INC. APPELANTE - and - - et - BARRY BROWN and GABRIEL CORMIER RESPONDENTS BARRY BROWN et GABRIEL CORMIER INTIMÉS Asurion Canada Inc. v. Brown and Cormier, 2013 NBCA 13 Asurion Canada Inc. c.

Brown et Cormier, 2013 NBCA 13 CORAM: The Honourable Chief Justice Drapeau The Honourable Justice Larlee The Honourable Justice Green CORAM : L’honorable juge en chef Drapeau L’honorable juge Larlee L’honorable juge Green Appeal from a decision of the Court of Queen’s Bench: April 25, 2012 Appel d’une décision de la Cour du Banc de la Reine : Le 25 avril 2012 History of Case: Historique de la cause : Decision under appeal: Unreported Décision frappée d’appel : Inédite Preliminary or incidental proceedings: N/A Procédures préliminaires ou accessoires : s.o.

Appeal heard and judgment rendered: October 16, 2012 Appel entendu et jugement rendu : Le 16 octobre 2012 Reasons delivered: February 14, 2013 Motifs déposés : Le 14 février 2013

Reasons for judgment by: The Honourable Chief Justice Drapeau Motifs de jugement : L’honorable juge en chef Drapeau Concurred in by: The Honourable Justice Larlee The Honourable Justice Green Souscrivent aux motifs : L’honorable juge Larlee L’honorable juge Green Counsel at hearing: For the appellant Asurion Canada Inc.: Sacha D. Morisset For the respondents Gabriel Cormier and Barry Brown: Enrico Scichilone Avocats à l’audience : Pour l’appelante Asurion Canada Inc.: Sacha D.

Morisset Pour les intimés Gabriel Cormier et Barry Brown : Enrico Scichilone THE COURT In the text that follows, the Court provides its reasons for: (1) dismissing the appellant employer’s appeals (now consolidated) against awards of damages for its

summary dismissal of the respondent employees, without cause in both instances; and (2) allowing each respondent costs on appeal of $4,500, a sum designed to provide substantial indemnity for legal fees incurred. The judgment of the Court was delivered by DRAPEAU, C.J.N.B. I. Introduction [ 1 ] The underlying actions for damages were commenced in response to the respondents’

summary dismissal for what the appellant identified, then and throughout the litigation, as violations of its workplace internet acceptable use policy. The separate proceedings were heard at the same time in the Court of Queen’s Bench and, in accordance with the simplified procedure prescribed by Rule 79 of the Rules of Court , both respondents and Ms. Jennifer Baxter, the appellant’s local Senior Human Resources Manager, filed affidavit evidence. They also provided oral evidence.

[ 2 ] In companion decisions, the trial judge ruled against the appellant in the two actions. In his admittedly mistaken view, McKinley v. BC Tel , 2001 SCC 38 , [2001] 2 S.C.R. 161 required “deceitful” misconduct for the dismissals to be legally justified. After making findings of reliability and credibility favorable to the respondents, the judge concluded the appellant had not established misconduct of that nature and, as a result, its defence of “just cause” could not prevail.

Fortunately for the respondents, the judge also found that, in any event, dismissal constituted a disproportionately severe penalty for the misconduct at issue, the receipt and viewing on company-issued computers of email-attached images, which the trial judge described as “pornographic”. [ 3 ] Separate appeals were launched and prosecuted, each taking issue with those determinations, and numerous other statements and findings by the trial judge.

After consolidating the two appeals and hearing wide-ranging submissions from counsel for the appellant, the Court rejected its challenge without calling upon the respondents to counter. Accessorily, each respondent was awarded costs on appeal of $4,500, a quantum designed to provide substantial indemnity for legal fees incurred. [ 4 ] The following text fleshes out the basis for both features of the Court’s disposition from the Bench. II. The Context [ 5 ] One might be tempted to assume from its name that the appellant, Asurion Canada Inc., is a Canadian corporation.

Yet, the admissions in the pleadings establish its headquarters are in San Matteo, California, U.S.A. Be that as it may, it is common ground that Asurion is the world’s largest provider of “enhanced” services for the wireless communication industry. In her June 20, 2011 affidavit, Ms. Baxter states the company provides “technology production” services to clients located around the world. She adds those services include next day device replacement, as well as protection of user content and software.

At the time of the dismissals on July 23, 2010, Asurion was operating 15 call centers in Asia, Europe and North America, including one in Moncton, New Brunswick, where at any given time as many as 250 employees, working in separate cubicles located in a single large room, engaged in communication with existing and potential clients. [ 6 ] The respondent, Gabriel Cormier, was hired in June of 2002 to work as a Call Centre Supervisor at Asurion’s Moncton premises, a position he occupied when summarily dismissed eight years later on July 23, 2010. At that time, his annual salary and benefits amounted to $55,000.00.

In his April 19, 2011 affidavit, Mr. Cormier explains his job responsibilities included leading and managing “a team of 12 to 25 customer service representatives along with playing a role of implementing new processes and assuring employee development, while managing their performance”. He points to the receipt of several salary increases over the term of his employment and performance reviews which indicated he either met or exceeded company goals and objectives. In his affidavit, Mr.

Cormier also records that, during the July 23, 2010 meeting which culminated with his dismissal, senior company officials acknowledged his high level of integrity and confirmed he was “a true leader”. He goes on to assert he was never warned the receipt of “pornographic” emails at work would bring about his dismissal and offers the following subjective take on the termination of his employment contract: I truly believe I was fired because of my salary. I was advised by April Belding, and truly believe, that she replaced my position.

April Belding was laid off the previous month along with a group of 9 employees consisting of 5 supervisors and 4 workforce analyst due to restructuring within the Defendant’s company. After my job termination, Ms. Belding was rehired as an operations supervisor with a salary of approximately $37,000.00, a saving of approximately $18,000 per year. My rate of pay had been a topic for the last couple of years on my reviews that I was becoming expensive.

In addition, in 2012, the Defendant implemented salary caps on entry level employees and I was advised by Tammy Legacy, and truly believe, that salary caps on supervisors would follow. [ 7 ] The respondent, Barry Brown, was hired in October of 2001 to work out of the Moncton premises as a Customer Service Representative. A few months later, Mr. Brown was promoted to Vendor Payables Specialist, a position he occupied at the time of his

summary dismissal on July 23, 2010 and one which required he process for payment invoices from customers, service providers and product suppliers. Mr. Brown also worked in his own cubicle area with approximately eight to twelve fellow departmental employees. As was the case for Mr. Cormier, Asurion viewed him as a good and dedicated employee. At the time of his dismissal, Mr. Brown’s annual salary and benefits amounted to $42,263.00. In his April 19, 2011 affidavit, Mr.

Brown expresses the belief he was dismissed for the following reasons: I truly believe I was fired because of a need for someone to take over my position that had more accounting experience than I have. I also feel that because my position was hourly rather than a salaried position like the rest of the department and this caused a problem when month end came and there was a holiday. Being hourly, if I worked, I would need to be paid I believe time and a half or double time rather than take a day in lieu like the salaried employees.

[ 8 ] However, in both of its Statements of Defence, Asurion asserts there was just cause for dismissal based upon violations of its “policies” and “Code of Conduct principles”, which it claimed occurred when the respondents “received and viewed sexually explicit material using [its] computer and/or email systems”. According to Asurion’s pleadings, those violations “breached the terms [of each respondent’s] employment” and, as a consequence, “the underlying relationship of trust was irreparably broken”.

The record, including the Appellant’s Submissions, makes plain the “policies” and “principles” referenced in Asurion’s Statements of Defence are those set out in the “Guidelines for Use” found in the “Voicemail, Email and Computer Usage” portion of its Employee Handbook which reads as follows: Employees are prohibited from accessing, transmitting, receiving or storing any information that is discriminatory, profane, harassing or defamatory in any way (e.g. sexually-explicit or racially discriminatory material). […] If you believe you have observed or have reason to suspect that someone is or has violated the guidelines and standards of this policy, notify your supervisor or a member of management immediately.

Any violations of these “Guidelines for Use” or other provisions of this policy may result in disciplinary action, up to and including termination. [ 9 ] Those “Guidelines for Use” form part of the Employee Handbook’s extensive treatment of workplace sex-related activities and it may be useful, for contextual purposes and ease of reference, to reproduce all of the pertinent provisions with the more salient parts underlined: 1.04 Sexual and Other Unlawful Harassment Asurion is committed to a work environment in which all individuals are treated with respect and dignity.

Each individual has the right to work in a professional atmosphere that promotes equal employment opportunities and prohibits discriminatory practices, including harassment . It is the policy of Asurion to ensure equal employment opportunity without discrimination or harassment on basis of race, colour, religion, national origin, ancestry, place of origin, age, physical disability, mental disability, marital status, sexual orientation, sex, social condition, political belief or activity or any other protected characteristic as established by law.

Asurion prohibits and will not tolerate any such discrimination or harassment .

Definitions of Harassment: a. Sexual harassment constitutes discrimination and is illegal under federal and provincial laws, and/or at common law. For the purposes of this policy, sexual harassment is defined as unwelcome sexual advances, requests for sexual favours and other verbal or physical conduct of a sexual nature when, for example : (

i) submission to such conduct is made either explicitly or implicitly a term or condition of an individual’s employment, (ii) submission to or rejection of such conduct by an individual is used as the basis for employment decisions affecting such individual or (iii) such conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile or offensive working environment . Sexual harassment may include a range of subtle and not so subtle behaviours and may involve individuals of the same or different gender.

Depending on the circumstances, these behaviours may include, but are not limited to : unwanted sexual advances or requests for sexual favours, sexual jokes and innuendo, verbal abuse of a sexual nature, commentary about an individual’s body, sexual prowess or sexual deficiencies, leering, catcalls or touching, insulting or obscene comments or gestures, displays or circulation in the workplace of sexually suggestive objects or pictures (including through e-mail) and other physical, verbal or visual conduct of a sexual nature. Sexual harassment does not have to involve sexual activity or language.

Sex-based harassment exists when a hostile work environment is created because of the sex of an individual. A hostile work environment exists if the harassing conduct is sufficiently severe and pervasive.

b. Harassment on the basis of any other protected characteristic is also strictly prohibited. Under this policy, harassment is verbal or physical conduct that denigrates or shows hostility or aversion toward an individual because of his/her race, colour, religion, national origin, ancestry, place of origin, age, physical disability, mental disability, marital status, sexual orientation, sex, social condition, political belief or activity or any other protected characteristic as established by law and that: (

i) has the purpose or effect of creating an intimidating, hostile or offensive work environment, (ii) has the purpose or effect of unreasonably interfering with an individual’s work performance, or (iii) otherwise adversely affects an individual’s employment opportunities.

Harassing conduct includes, but is not limited to : epithets, slurs or negative stereotyping; threatening, intimidating or hostile acts; denigrating jokes and display or circulation in the workplace of written or graphic material (including through email) that denigrates or shows hostility or aversion toward a protected class . 5.09 Voicemail, Email and Computer Usage Asurion provides various Technology Resources to authorized employees to assist them in performing their job duties for Asurion.

Asurion’s Technology Resources consist of all electronic devices, software and means of electronic communication including, but not limited to: personal computers and workstations, laptop computers, mini and mainframe computers, personal digital assistants (PDAs), computer hardware such as disk drives and tape drives, peripheral equipment such as printers, modems, fax machines and copiers, computer software applications and associated files and data, including software that grants access to external services, such as the Internet, electronic mail, telephones, cellular phones, personal organizers, pagers and voicemail systems.

This policy sets forth the company’s guidelines for the acceptable use of Asurion Technology Resources including voicemail, e-mail and computer systems usage , as well as an advisory concerning the company’s access to and disclosure of messages and information stored on these systems, failure to adhere to these guidelines may lead to disciplinary action, up to and including unpaid suspension and/or termination of employment. Moreover, Asurion reserves the right to advise appropriate legal authorities of any violation of law by an employee.

Permitted Personal Use Unless otherwise proscribed, the following personal use of Technology Resources is permitted so long as the use does not interfere with the employee’s duties, conflict with the business of Asurion or violate any other Asurion policy • To send and receive limited personal communications • To prepare and store personal data (such as personal calendars, personal address lists and similar incidental personal data) in a reasonable manner • To use the telephone system for limited personal calls • To access the Internet for brief personal searches and inquiries Asurion assumes no liability for loss, damage, destruction, alteration, disclosure, or misuse of any personal data or communications transmitted over or stored on Asurion Technology Resources.

Prohibited Uses Employees may not use Asurion Technology Resources in a manner contrary to the best interests of Asurion, in a way that discloses confidential or proprietary information of Asurion or third parties, for any illegal purpose, or for the violation of any Asurion policy as follows: • Employees are prohibited from unauthorized use of access codes of other employees to gain access to their equipment and communications systems (such as computers, e-mail, voicemail).

• Employees are prohibited from using company property, including electronic communication systems, to promote any personal commercial or business ventures or interests.

Employees are also prohibited from using company property for the unauthorized dissemination of copyrighted materials, trade secrets, proprietary financial information or similar materials. • Employees are prohibited from accessing, creating or sending internet communications, voicemail or e-mail messages that may constitute intimidating, hostile or offensive material on the basis of race, colour, religion, national origin, ancestry, place of origin, age, physical disability, mental disability, marital status, sexual orientation, sex, social condition, political belief or activity or any other protected characteristic as established by law.

The company’s policy against sexual or other harassment applies fully to the use of the equipment and communications systems. • Employees are prohibited from the unauthorized review, duplication, dissemination, removal, installation, damage or alteration of files, passwords, computer systems or programs or other property of Asurion, or improper use of information obtained by unauthorized means.

Employees are prohibited from copying, retrieving, forwarding or sending copyrighted materials unless the employee has the author’s permission or is accessing a single copy only for the employee’s reference. • Employees are prohibited from accessing , transmitting, receiving or storing any information that is discriminatory, profane, harassing or defamatory in any way (e.g. sexually-explicit or racially discriminatory material) . • Employees are prohibited from loading personal software onto technology resources or coping software from Asurion Technology Resources for personal use. • Employees are prohibited from signing “guest books” at Websites or to posting information on any Websites, including posting messages to internet news groups or discussion groups. • Employees are prohibited from any illegal, discriminatory, threatening, harassing, abusive or offensive comments. • Employees are prohibited from anything in conjunction with an employee’s outside business endeavours or sales of any product or outside service (home products, items for sale, etc.). • Employees are prohibited from sending messages or other communications violating a company policy or contrary to supervisory instructions.

The company’s policy against sexual harassment and other workplace harassment applies to use of voicemail, e-mail and computer systems . If you believe you have observed or have reason to suspect that someone is or has violated the guidelines and standards in this policy, notify your supervisor or a member of management immediately.

Any violations of these “Guidelines for Use” or other provisions of this policy may result in disciplinary action, up to and including termination . [Emphasis added.] [ 10 ] During the course of their employment, the respondents acknowledged in writing: (1) having read and understood Asurion’s Internet Acceptable Use Policy; (2) their agreement to abide by and ensure others under their supervision abided by the Policy’s terms; and (3) their understanding that they “may face legal or disciplinary action according to law” for a violation of those “rules”. Moreover, it was Ms.

Baxter’s evidence that every time an employee proceeds to log into his or her work computer, acceptance of those terms must be signified by clicking “OK” on the computer screen. [ 11 ] Between May 7 and July 15, 2010, Messrs. Cormier and Brown received more than a dozen emails, all unsolicited, to which were attached images described as “pornographic” in the judgment under appeal. The emails and attachments were sent by a common “friend”, a non-employee, apparently for humorous purposes.

At any rate, they were received at the respondents’ workplace through their respective work computers. [ 12 ] The emails and attachments in question were either promptly deleted or transferred to a personal email address. Moreover, the contents were not shared with anyone at work. It appears, however, that Mr. Cormier knew Mr. Brown was also a recipient of the “pornographic” material. [ 13 ] On one occasion, Mr. Cormier replied to the sender that “he [the sender] had too much time on his hands”, but neither he nor Mr.

Brown insisted their common “friend” stop sending further “pornographic” emails to their computers at work. Nor did either of them bring the issue up with a superior. [ 14 ] In mid-July 2010, Asurion became aware of the emails through its “Vontu” system, which monitored information sent or received through its networks. As a result, on July 23, 2010, the respondents were convened to separate meetings where, after acknowledging receipt of the emails, they were advised by Asurion officials this state of affairs constituted a breach of its policies and an irreparable breach of trust. Mr.

Cormier was also informed his misconduct was viewed as particularly objectionable because, in Asurion’s opinion, his supervisory responsibilities required he ensure Mr. Brown ceased receiving “pornographic” emails. Both meetings concluded with dismissal.

[ 15 ] On April 25, 2012, following simultaneous trials of the two actions, a judge of the Court of Queen’s Bench found there was no “just cause” for

summary dismissal, Asurion having failed to establish “deceitful” misconduct. He went on to adopt a fallback basis for rejecting the defence raised in the Statements of Defence: dismissal amounted to a disproportionate sanction for the misconduct at issue. With respect to the argument based upon Mr. Cormier’s supervisory position, the trial judge noted Mr. Brown was not an employee under Mr. Cormier’s supervision, the receipt of emails had “nothing to do with [Mr. Cormier’s] responsibilities” and the evidence did not establish a failure to “fulfill his responsibilities as a supervisor”. In the result, Mr.

Cormier and Mr. Brown were awarded $36,664.00 and $31,772.25 respectively, as damages in lieu of notice. [ 16 ] In Barry Brown v. Asurion Canada Inc. (unreported, April 25, 2012, M/C/0737/10), the trial judge made the following observations regarding the defence pleaded in Asurion’s Statement of Defence and Ms. Baxter’s evidence in support: In Roe v.

Schneider National Carriers Inc. [2006] Carswell Ont105 , Taliano J., where an employe[e] had been terminated without notice or compensation because of complaints from other employees alleging sexual harassment by this employee, discussed about the right for dismissal for cause without notice as follows: The employer has the onus of demonstrating that cause exists for an employee’s

summary dismissal, which has been characterized as the “capital punishment” of the employment relationship. Howard Levitt summarizes in the Law of Dismissal in Canada, at 6-1 that “the employer must prove cause on the balance of probabilities, based on a finding of real incompetence or misconduct, rather than simple dissatisfaction with performance or concern as to potential misconduct. “Leavitt cautions: ‘Since dismissal without notice is such a severe punishment, it can be justified only by misconduct of the most serious kind.’” In McKinley v.

BC Tel (supra) Iacobucci J. set the test for dismissal for just cause as follows: In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonestly warranted dismissal. In my view, the second branch of this test does not blend questions of fact and law. Rather, assessing the seriousness of the misconduct requires the facts established at trial to be carefully considered and balanced.

As such, it is a factual inquiry for the jury to undertake. In the case at bar, this Court has to decide if there is evidence to establish the employee’s deceitful conduct on a balance of probability and if so, are the nature and degree of the misconduct to such a high degree and more specifically of the most serious kind, that immediate dismissal was the only reasonable punishment. Asurion who bears the onus to establish the employee’s deceitful conduct has failed without a doubt.

I will just say that the evidence of the Senior Manager of Asurion is an exaggeration of the fact situation that presented itself. [...] My only comment after reviewing the evidence is that the conclusion of Asurion is exaggerated and beyond belief. In the case at bar, the parties’ evidence diverged in many aspects. In assessing the credibility I can identify the following criteria for the courts to consider when determining credibility: - the reasonableness of the evidence - whether there are contradictions in the evidence - personality, demeanor and corroboration - self-interest

- powers of observations and recollection - capacity of expression In a procedure under Rule 79 usually the Court will not have the benefit of hearing a witness testify viva voce as their evidence issubmitted by affidavit. While reading Mrs. Baxter’s first affidavit, it was very difficult on a balance of probability to hold its content tobe reliable. However, I had the benefit to hear her at the hearing on some issues and it confirms my initial reaction to her commentsstated in her affidavit. Mr. Brown also testified. Mr. Brown’s evidence was consistent and his demeanor forthright. He was not defensive.

As I mentioned he had not initiated the emailsreceived from a friend. He did not embarrass anyone in his surrounding and could not understand why he was treated the way he wasafter almost 10 years of loyal service to his employer. Mrs. Baxter’s evidence was from an interested witness and she was ready to sign whatever was required in pursuit of Asurion’s interest.She was defensive and did not seem convinced herself of the position taken by her employer.

Her evidence on occasion is not reasonableand her powers of observation and recollection seemed less [than] acute such as not being sure if the warning of Asurion appears on awindow on the screen in the login process. In any instance, where the evidence of Mr. Brown and Mrs. Baxter diverged, I prefer that of Mr. Brown. Even if I was to conclude that Mr. Brown’s conduct was deceitful, I am satisfied that it would have been necessary for Asurion to warnMr. Brown that his behavior was inacceptable and if repeated could lead to his dismissal.

I do not believe that there was any breach oftrust in any nature and this position of Asurion is unreasonable in the circumstances. There are no findings of fact or supportive evidencefiled by Asurion to come to such a conclusion. I have come to the conclusion that no cause existed for Mr. Brown’s dismissal. Asurion failed to prove cause on the balance ofprobabilities based on real misconduct. As dismissal is a severe punishment, it can only be justified by misconduct of more serious kind. It has been acknowledged that viewing pornography would not justify on its own,

summary dismissal and even if it was to be, theinformation as set in Asurion Handbook would not constitute a warning in circumstances such as in the case at bar in any event. Mr.Brown’s dismissal was disproportional to his misconduct if it was to be so categorized. There is no argument to be made from Mr.Brown’s failure to acknowledge any wrong doing upon being confronted by Mrs. Baxter on July 23, 2010. This is no credible defense tothis action. It is the conclusion of this Court that Mr.

Brown’s dismissal is without cause and he was entitled to be given reasonable notice oftermination. [Emphasis added.] [17] In Gabriel Cormier v. Asurion Canada Inc. (unreported, April 25, 2012, M/C/0747/10), the trialjudge delved further into Asurion’s defence and the evidence of Ms. Baxter: For the purpose of this decision I will just repeat what I have written in Brown v. Asurion to be the principle of law also applicable to thiscase. In McKinley v.

BCTel 2001 SCC 38 , [2001] 2 S.C.R. 161 Iacobucci J. made the general observation that “courts have explicitlyruled that the issue of just cause is one of fact to be put to a jury”. He then adds “Rather than viewing cause for dismissal as a legalconclusion that must be drawn in any case […] just cause can only be determined through an inquiry by the trier of fact into (

a) whetherthe evidence demonstrated employee misconduct and (

b) whether, in the circumstances, such misconduct sufficed to justify theemployee’s termination without notice”.

In Roe v. Schneider National Carriers Inc. [2006] Carswell Ont.105 , Taliano J., where an employe[e] had been terminated without notice or compensation because of complaints from other employees alleging sexual harassment by this employee, discussed about the right for dismissal for cause without notice as follows: The employer has the onus of demonstrating that cause exists for an employee’s

summary dismissal, which has been characterized as the “capital punishment” of the employment relationship. Howard Leavitt summarizes in the Law of Dismissal in Canada, at 6-1 that “the employer must prove cause on the balance of probabilities, based on a finding of real incompetence or misconduct, rather than simple dissatisfaction with performance or concern as to potential misconduct. “Leavitt cautions: ‘Since dismissal without notice is such a severe punishment, it can be justified only by misconduct of the most serious kind.’” In McKinley v.

BC Tel (supra) Iacobucci set the test for dismissal for just cause as follows: In accordance with this test, a trial judge must instruct the jury to determine: (1) whether the evidence established the employee’s deceitful conduct on a balance of probabilities; and (2) if so, whether the nature and degree of the dishonestly warranted dismissal. In my view, the second branch of this test does not blend questions of fact and law. Rather, assessing the seriousness of the misconduct requires the facts established at trial to be carefully considered and balanced.

As such, it is a factual inquiry for the jury to undertake. On these principles for Asurion to succeed, there must be evidence to establish that Mr. Cormier’s conduct was deceitful on a balance of probabilities and if so, that the nature and degree of this misconduct was to such a high degree and of serious kind, that immediate dismissal was the only reasonable punishment. […] The position of Asurion is indefendable and the facts, in this Court’s opinion, have been exaggerated beyond belief. […] None of these emails were circulated to other employees, transmitted to clients and notably solicited by Mr. Cormier.

Mrs. Baxter stated in her affidavit that Mr. Cormier was responsible for supervising 15 employees including ensuring compliance with an enforcement of Asurion’s policies and procedures. There is no reliable evidence that Mr. Cormier did not fulfill his responsibilities as a supervisor. Receiving unsolicited emails which contained sexual[ly] explicit photographs has nothing to do with his responsibilities. Employee[s] at Asurion could for their personal use receive voicemail, email during working hours as stated in its Employee Handbook.

Upon being informed of the reception of these emails, notice could have been given to Mr. Cormier that this practice was not acceptable and it should cease. That would be what was expected of a reasonable person. For some reason, Mrs. Baxter decided to review these emails with the Senior Director of Human Resources, Manager of Operations, Director of Operations and the Vice-President of Consumer Care/Operations. Asurion considered that these emails constituted a significant “breach of trust”. After meeting with Mr.

Cormier he acknowledged receiving them and they were inappropriate and he ought to have stopped receiving them. Mrs. Baxter did not consider that this acknowledgement was sufficient to rectify the breach of trust and loss of confidence that resulted from Mr. Cormier’s lack of judgment and breach of Asurion’s policies. This is again an exaggeration by Mrs. Baxter. I have had the benefit of hearing Mrs. Baxter testify on her affidavits. Having considered the reasonableness of her evidence, how her evidence was contradicted by Mr.

Cormier’s evidence, her demeanor, her lack of objectivity where it came to represent the interest of Asurion, I cannot accept her evidence to be reliable. In any event, when her evidence diverged from the evidence of Mr. Cormier, I prefer the evidence of Mr. Cormier. I have found no reliable evidence to support that there was cause for dismissal of Mr. Cormier. I cannot find Mr. Cormier’s conduct to be deceitful and at best he could have been warned that Asurion did not want its employees to received sexual explicit photographs on its computer.

To dismiss an employee certainly seems to be disproportionate to the conduct of Mr. Cormier and the reasons given for his dismissal were not supported by the evidence in the circumstances of this case.

In no way could a reasonable person conclude that the behavior of Mr. Cormier amounted to a serious misconduct irreparably breaching trust between an employer and employee . No cause existed for Mr. Cormier’s dismissal. Asurion failed to prove cause on the balance of probability based on real misconduct. To impose such a severe punishment, misconduct of some serious kind must be apparent. To set their argument in the context of Mr. Cormier being a supervisor changes nothing in my conclusions in this case at bar . [Emphasis added.] III.

Analysis and Decision [ 18 ] Asurion appeals, contending the trial judge committed reversible error: (1) in holding [it bore] the onus of establishing “deceitful” conduct on the part of the respondents; (2) in holding [it] had an obligation to warn [each] respondent that his behavior was unacceptable and if repeated could lead to his termination; (3) in holding that the receipt by the respondents of [its] employment policies did not constitute a fair warning justifying

summary dismissal upon the first occurrence of misconduct; (4) with respect to Mr. Brown, in holding that [his] failure to acknowledge any wrongdoing upon being confronted […] with allegations of misconduct was an irrelevant factor in the assessment of the […] defence, (5) with respect to Mr.

Cormier, in holding that [his] ongoing receipt […] of emails containing sexually explicit images at his work email account had no connection to his responsibilities as a supervisor; (6) in holding that the dismissal of [each] respondent was disproportionate to his misconduct; (7) in holding that [each] respondent’s misconduct was insufficient to cause an irreparable breach of trust between employer and employee; (8) in his assessment of the credibility and the evidence of Jennifer Baxter, who gave affidavit evidence and viva voce evidence at trial, a. by failing to circumscribe the ambit of Ms.

Baxter’s viva voce testimony; b. by concluding that the whole, or majority, of Ms Baxter’s evidence was unreasonable without any or sufficient basis for this finding; c. by finding that Ms. Baxter’s demeanour at trial undermined her credibility without any or sufficient basis for this finding; d. by qualifying Ms. Baxter lacked objectivity where it came to represent the interest of the appellant;

e. by qualifying Ms. Baxter’s evidence, including her unchallenged affidavit evidence, as “exaggeration” and as being “beyondbelief”; and f. by qualifying Ms. Baxter’s recollection as “less than acute” without any or sufficient basis for this finding; (9) by failing to adequately consider the respondents’ credibility and by adopting an approach which consisted in rejecting allthe evidence that was inconsistent with his reasons and accepting all the evidence that was consistent therewith.

Ground (1) [19] I readily agree Asurion was not saddled with the burden of proving that any misconduct on therespondents’ part was “deceitful”. It follows, as suggested in Ground (1), that the trial judge’s statement to the contrary reflects an errorof law.

Although proof of “deceitful” conduct is required where the claimed “just cause” is based upon employee dishonesty, it is not incases such as the present one, where, as noted, the predicate misconduct is a breach of the employer’s internet acceptable use policy.That said, in my respectful judgment, the trial judge’s misstatement of the law does not undermine his finding of disproportionality and,as a result, reversal is not mandated by the error highlighted in Ground (1). Ground (2) [20] Ground (2) relates to the critical issue of proportionality to which I will turn in short order.

Grounds (3), (4) and (5) [21] Grounds (3), (4) and (5) raise issues that are not properly before this Court, Asurion havingomitted to plead in its Statements of Defence the underlying material facts. Specifically, Asurion did not plead the contents of itsEmployee Handbook provided “a fair warning justifying

summary dismissal upon the first occurrence of misconduct”. Nor did it pleadMr. Brown’s failure to acknowledge any wrongdoing constituted a building block in the formation of “just cause” for his dismissal. Thesituation is likewise for the contention that Mr. Cormier failed to fulfill his supervisory responsibilities. As is well known, “the onus ison the employer to justify an employee’s

summary dismissal [and] the starting point of any analysis is the employer’s Statement ofDefence” (emphasis added, per Robertson, J.A. in Henry v. Foxco Ltd., 2004 NBCA 22, 269 N.B.R. (2d) 63). See, as well, the thoroughdiscussion on point in Backman v. Maritime Paper Products Ltd., 2009 NBCA 62, 349 N.B.R. (2d) 171: In his decision, the trial judge makes reference to “statute law”, without specifically identifying any particular statute. Presumably, inreferring to Mr.

Backman’s conduct as “illegal sexual harassment”, the trial judge had in mind the Human Rights Act, R.S.N.B. 1973, c.H-11, which states that to sexually harass someone “means engage in vexatious comment or conduct of a sexual nature that is known orought reasonably to be known to be unwelcome” (s. 7.1(1)). In effect, the trial judge concluded Mr. Backman had engaged in “illegal” activity without any such allegation having been raised in thepleadings.

Maritime Paper’s statement of defence alleged continued “excessive and inappropriate use of” the company’s computer, notthe sexual harassment of any of its employees. It was the repeated misconduct in the face of clear warnings that was alleged to justify thedismissal. In addition, the question of sexual harassment is not one that arose at trial. In fact, at the end of the trial, the trial judgerequested post-trial briefs from counsel on two issues, the second of which was whether the private viewing of “Internet porn” couldjustify

summary dismissal. In explaining what he wanted counsel to address, the judge acknowledged that “in this case, there’s [no]evidence of co-workers in the ... at his office seeing the stuff or being embarrassed by it ...” Thus, nowhere in the pleadings, or at anytime during the trial, was Mr. Backman alerted that he would have to respond to allegations of illegal activity. As a result, Mr. Backmandid not adduce any evidence or present any arguments on point.

Yet, in the reasons for decision, he is effectively found to have engagedin “illegal sexual harassment.” With respect, I am of the view that the trial judge’s approach to this case violates the following principles Drapeau J.A. (now ChiefJustice) articulated in Parlee v. McFarlane (1999), (NB CA), 210 N.B.R. (2d) 284 (C.A.), [1999] N.B.J. No. 88 (QL):

It is commonplace that trial by ambush has no place in our modern system of justice. The rules of pleading enunciated in Rule 27 of theRules of Court are designed to ensure that the relevant issues are raised, and that no party is taken by surprise. The importance ofpleadings cannot be underemphasized. They define the issues not only for the parties, but for the judge as well. Indeed, I cannot fathom asituation where a trial judge could properly decide the case before him or her on a basis not raised in the pleadings or at trial. [...] I find the following observation by Hoyt C.J. in King et al. v.

Canada (Attorney General) et al. (1997), (NB CA), 187N.B.R. (2d) 185, at p. 196 to be particularly apt in the circumstances: Judges must resist the temptation to raise new issues, particularly those that are determinative, without giving the parties an opportunityto respond. ... This obligation extends to all proceedings, be they criminal, quasi-criminal or civil. It flows from the fundamental right that all litigantshave, namely the right to be heard before judgment is pronounced. See R. v. Peter Paul. (T.) (indexed as R. v.

Paul (T.P.)) (1998), (NB CA), 196 N.B.R. (2d) 292 (C.A.) at pp. 312-13. [paras. 33, 35-36] It is beyond question that these principles apply to a wrongful dismissal action where, as Robertson J.A. stated in Henry v. Fox Ford(2004), 269 N.B.R. (2d) 63 (C.A.), [2004] N.B.J. No. 109 (QL), 2004 NBCA 22, “the onus is on the employer to justify an employee’ssummary dismissal [and] the starting point of any analysis is the employer’s Statement of Defence” (para. 123). Here, the employer didnot allege, either in the termination letter, in the statement of defence, or in its arguments at trial, that Mr.

Backman was dismissed for“illegal sexual harassment”. In my view, it was improper for the trial judge to determine the action on the basis that Mr. Backman’s conduct could constitute “illegalsexual harassment.” [paras. 14-18] That said, and lest there be doubts on point, I am not at all persuaded the trial judge erred in making the findings impugned by Grounds(3), (4) and (5). Grounds (6) and (7) [22] Grounds (6) and (7) target the issue of proportionality, which, as mentioned, lies at the heart ofthe present appeal, and will be fully discussed later in these reasons.

Grounds (8) and (9) [23] As for grounds (8) and (9), they deal with findings of fact, including the trial judge’s findingthat the respondents’ evidence was credible and reliable. As repeatedly appears from his reasons for judgment, the trial judge concludedMs. Baxter’s evidence was unreliable, at least in relation to matters that were both controversial and capable of tilting the scales againstthe respondents. The findings contested through grounds (8) and (9) are findings of fact for which the standard of review on appeal is“palpable and overriding error” (see Housen v.

Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, para. 10). As for the finding that therespondents’ evidence was credible, the following observations in F.H. v. McDougall, 2008 SCC 53, [2008] 3 S.C.R. 41 are particularlyapposite: With respect, I cannot interpret the reasons of the majority of the Court of Appeal other than that it disagreed with the trial judge’scredibility assessment of F.H. in light of the inconsistencies in his evidence and the lack of support from the surrounding circumstances.

Assessing credibility is clearly in the bailiwick of the trial judge and thus heightened deference must be accorded to the trial judge onmatters of credibility. As explained by Bastarache and Abella JJ. in R. v. Gagnon, [2006] 1 S.C.R. 621, 2006 SCC 17, at para. 20:

Assessing credibility is not a science. It is very difficult for a trial judge to articulate with precision the complex intermingling of impressions that emerge after watching and listening to witnesses and attempting to reconcile the various versions of events. That is why this Court decided, most recently in H.L. , that in the absence of a palpable and overriding error by the trial judge, his or her perceptions should be respected. [para. 72] [Emphasis added.] Needless to say, unlike the trial judge, we have not had the benefit of watching and listening to Ms.

Baxter and the respondents as they testified. [ 24 ] On the record at our disposal, I see no basis for interference with the findings of fact, including the findings of credibility on the respondents’ part, which are referenced in grounds (8) and (9). It was for the trial judge to determine whose evidence was reliable and, in my view, his findings on point are neither unreasonable nor the product of palpable and overriding error. That being so, strictly speaking, nothing further need be said regarding the grounds of appeal that contest the trial judge’s assessment of any witness’ evidence.

Still, it should be pointed out, in fairness to Ms. Baxter, that the trial judge’s more disparaging remarks regarding her evidence do not suggest untruthfulness on her part. [ 25 ] In my view, the significant issues arising from a combination of the Statements of Defence, the Notices of Appeal and the debates, both at trial and on appeal, may be summarized as follows: (1) did the receipt and viewing of the “pornographic” emails violate Asurion’s internet acceptable use policy?; and (2) if so, was the violation so serious that

summary dismissal constituted a proportionate disciplinary response? The first question stands to be answered by a contextual understanding of the wording of the pertinent policy provision, while the second calls for the application of the proportionality principle. As will be seen, I question whether Asurion has established a violation of the policy provision upon which it relies. My doubts on point are driven by what I see as ambiguity in the provision’s wording, considered contextually.

Ultimately, however, I choose to confirm the judgment under appeal on the grounds that the trial judge’s finding of disproportionality to which his decision is moored, admittedly in the alternative, stands untainted by reversible error. That choice commends itself to me because I am not satisfied the interpretative question has been adequately addressed in the parties’ submissions, both written and oral. A. Did the policy violations pleaded in the Statements of Defence take place? [ 26 ] At common law, an employer is not answerable in damages for a

summary dismissal based upon proven “gross” misconduct (see Halsbury’s Laws of England , 4 th ed., vol. 16 (London: Butterworths, 1992) at para. 298). The proven misconduct must be of “the most serious kind” (see Ball, Canadian Employment Law , vol. 1, looseleaf (Aurora, Ont.: Canada Law Book, 2011) at paras. 11:10).

The pivotal question is whether the misconduct undergirding the defence of “just cause” was “sufficiently grave to amount to repudiation by the employee of the contract of employment, either as to the whole of the contract or as to a particular part of it of fundamental importance” (see Halsbury’s Laws of England , at para. 299). While each case stands to be examined objectively, in both England and Canada the weight of authority favors the view that the sufficiency of the misconduct’s gravity is a question of fact (see Halsbury’s Laws of England , para. 299, and Backman v.

Maritime Paper Products Ltd. , para. 31 ). No doubt that is so because the question’s resolution turns on an assessment by the trier of fact of the particular circumstances of the case including, but not limited to, the character and consequences of the predicate misconduct, the employer’s prior disciplinary responses, if any, the nature of the business, the duties of the employee as well as his or her length of service, past performance and service record. [ 27 ] Nevertheless, the focus of the judicial inquiry remains whether

summary dismissal was objectively proportionate to the seriousness of the misconduct, having regard to the totality of the surrounding circumstances. This exercise, while largely fact-driven, necessarily involves the characterization of a standard or benchmark and, not surprisingly, it has been suggested that an appeal impugning the trial judge’s application of that standard or benchmark to the facts raises a question of mixed fact and law (see, for example, the contrasting views expressed by our colleagues Turnbull J.A. and Robertson J.A. in Henry v. Foxco Ltd. ).

However, even if one were to accept the question is one of mixed law and fact, it would be, nonetheless, “subject to a standard of palpable and overriding error unless it is clear that the trial judge made some extricable error in principle with respect to the characterization of the standard or its application, in which case the error may amount to an error of law”: Housen v. Nikolaisen , at para. 37 .

I also recognize that the standard of palpable and overriding error is commonly understood and applied as encompassing the “reasonableness” or “rationality” of the contested finding or conclusion (for a judgment in favor of reversal based on the unreasonableness of a “just cause” finding, see Larlee J.A.’s analysis in Henry v. Foxco Ltd. ).

One final preliminary observation: the law on the subject of “just cause” for dismissal, like societal attitudes on a plethora of other subjects, has greatly evolved over the last several decades and trial judges would be well-advised to consider older understandings of misconduct seriousness with great care. [ 28 ] Where the misconduct relied upon to justify

summary dismissal is a breach of an employee conduct rule, the following issues come into play:

• whether the rule in question is reasonable and lawful; • whether the rule is consistent with the employee’s employment contract; • whether the rule is applicable to the employee; • whether the rule, including the consequences for a breach thereof, is known by the employee; • whether the rule is clear, unambiguous and consistently enforced by the employer; and • whether the employee’s breach of the rule is sufficiently serious, in the circumstances, having regard to the employee’s length of service, the employee’s position, the nature of the rule and whether the employee has a reasonable excuse, such that the violation of the rule or policy is not merely an isolated transgression or an error in judgment, but a fundamental breach which evidences a repudiation of the employment contract or an intention to no longer be bound by a fundamental term thereof. [Emphasis added.] See Mr.

Justice Randall Scott Echlin and Matthew L.L. Certosimo, Just Cause: The Law of

Summary Dismissal in Canada , (looseleaf) (Toronto: Canada Law Book, 2012), para. 16:310. See, as well, David Harris, Wrongful Dismissal , vol. 1, looseleaf (Toronto: Thomson Carswell, 1989) page 3-71. [ 29 ] For our present purposes, I will limit my observations to the question of whether the prohibition at issue is clear and unambiguous. Recall Asurion’s contention.

It is that, by receiving the unsolicited emails and viewing attachments to those emails, the respondents violated what Asurion claims is its rule against receiving or accessing pornographic material on its computers. [ 30 ] The short answer to that contention is this: there is no such plainly worded prohibition. What the Employee Handbook purports to prohibit is “accessing, transmitting, receiving or storing discriminatory, profane, harassing or defamatory “ information ( e.g. sexually-explicit or racially discriminatory material)” (emphasis added).

Having read the quoted text several times, its meaning remains elusive, indeed enigmatic. Accessing, transmitting and storing information involve a positive act. Receiving information does not. Bearing those truisms in mind, is it reasonable to interpret the quoted text as including a prohibition against receipt of an unsolicited email or even unsolicited follow-up emails from the same sender? Moreover, if Asurion’s intention was to prohibit accessing or receiving all sexually-explicit material, surely a much more direct, simple and clear formula could have been employed.

The prohibition, as formulated, is arguably open to the following understanding: the material must not only be sexually- explicit, it must also be solicited and contain information which qualifies as: (1) discriminatory; (2) profane; (3) harassing; or (4) defamatory. I hasten to point out there is no suggestion in the record that the emails and attachments at issue here contain information of that kind. Interestingly, the Employee Handbook features a clear and unambiguous prohibition against “circulation in the workplace of sexually suggestive […] pictures (including through e-mail)”.

If the policy provision upon which the defence of “just cause” rests prohibited accessing and receiving all sexually-explicit images , including those that do not contain information which is “discriminatory, profane, harassing or defamatory”, one wonders why it was deemed necessary to include an explicit prohibition against circulation in the workplace of sexually suggestive pictures through email. It seems to me at least plausible that the ambit of the policy provision to which Asurion has tethered its defence of “just cause” was intended to be narrower than what has been argued in these proceedings.

Be that as it may, one conclusion is inescapable: the provision is far from plainly worded and its true meaning is open to debate. I will say no more on this topic, and turn to what is, in my assessment, the crux of the case. B.

Did the trial judge commit reversible error in finding against the employer on the issue of proportionality? [ 31 ] As is well known, it is up to the employer to establish “just cause” and the trial judge must consider the matter afresh and objectively: to be clear, he or she does not sit on appeal from the employer’s decision, needing to be persuaded by the dismissed employee of the existence of some vitiating error. Indeed, the employer bears the burden of establishing dismissal was a proportionate disciplinary response to the misconduct. In Hall v.

Boise Alljoist Ltd. , 2006 NBCA 111 , 306 N.B.R. (2d) 396 , the Court quoted, with approval, Robertson J.A.’s observations on point in Henry v. Foxco , at para. 109: The principle of proportionality calls for an effective balance to be struck between the severity of an employee’s misconduct and the sanction imposed. This principle is a reminder of the well-worn cliché:

summary dismissal constitutes capital punishment in employment law. [ 32 ] Further helpful insights into this area of the law are provided in Ball, Canadian Employment Law , at para 11:190:

For the breach of an employer’s rule to constitute cause for

summary dismissal , the employee must be aware of the rule, the rule must be reasonable and the consequences of its breach must be so severe as to fundamentally breach the employment contract . For a rule to be applicable to an employee, it must clearly provide for its application. As with insubordination, not only must the policy be clear, it must be made known to the employee that breach of the policy will engender serious consequences. If the employer’s rule was breached through an honest mistake on the part of the employee, this will be a very relevant consideration as to whether cause for

summary dismissal will be found by the court. The penalty for breach of the rule must be reasonable and objectively proportionate to the seriousness of the employee’s misconduct. In determining whether dismissal is the appropriate penalty, the employee’s previous good or bad work history is relevant.

The employer not consistently enforcing a company rule may have the effect of denying the employer of its ability to summarily dismiss an employee for its breach. [Emphasis added.] [ 33 ] The trial judge must settle the proportionality issue by applying the contextual approach espoused by the Supreme Court of Canada in McKinley v. B.C. Tel, one that has since found favor in cases dealing with acts of misconduct other than dishonesty (see Henry v. Foxco Ltd. and Backman v. Maritime Paper Products Ltd. at para. 31 ) .

C ase summaries provided in Ball, Canadian Employment Law , at para. 11:190, illustrate the application of that approach to concrete situations and reinforce the view, which the trial judge adopted, that only “gross” or “very serious” misconduct can suffice to justify

summary dismissal, even where clear and unambiguous conduct rules have been violated, and that the misconduct at issue here is leagues short of the mark: A breach of a company security policy by its superintendent of fire and security, a senior employee, was held not to justify cause for dismissal since the defendant was not significantly prejudiced and the policy was not consistently enforced in the past. A breach of a policy against the drinking of alcohol at work was not serious enough to constitute cause for dismissal when the employee had a good and lengthy employment record.

A minor breach of a sexual harassment policy did not constitute cause for dismissal when there was no attempt to advertise or educate members of the staff concerning policies outlined in a policy statement, and the policy document was just one of many documents in a bundle received at the time of hiring. The failure to follow a policy concerning the maintenance of separate accounts, which led to the employer losing interest, did not constitute cause for dismissal for a long-term senior employee who had made important contributions to the employer over the years.

The employer in this case should have issued a reprimand or invoked some other type of discipline prior to dismissing the employee. Failure to comply with the employer’s disclosure policy was not held to constitute cause for dismissal when the employee [was] a long-service employee, with an unblemished record, and who was trying to advance the company’s interests. An emergency medical technician with an ambulance company who breached reasonable and necessary policies was found to be dismissed for cause given that his conduct was prejudicial to the employer’s business.

High standards had to be followed by ambulance companies; the business required strict adherence to instruction, and mere suspension, demotion, or deprivation of other rights or privileges was inappropriate in the context of the industry. Similarly, jurists understandably regard the deliberate breach of company safety procedures designed to protect the lives of fellow employees more seriously than some other company rules.

Breach of a company policy in connection to the operation and security of a warehouse was a flagrant disregard of responsibilities and went far beyond carelessness or mere indifference, and constituted cause for dismissal. A breach of a bank’s lending rules may constitute cause for

summary dismissal in appropriate cases. Breach of a bank’s confidence may, in appropriate circumstances, constitute cause of dismissal. Breach of a department store’s policy concerning taking its property out of the store was considered cause for dismissal when there had been earlier breaches of company policy committed by the employee. A municipality was entitled to dismiss an employee who violated its policy that required municipal employees to live in the municipality.

A senior executive who brought prostitutes back to the office after working hours was terminated given, inter alia , that he had breached the employer’s code of conduct. [ 34 ] The specific subject of breaches of workplace internet acceptable use policies as “just cause” attracts these observations in Ball, Canadian Employment Law , at para. 11:195: Some employers attempt to take a puritanical approach to improper Internet use and, in particular, the viewing of pornography in the workplace. An absolutist and non-contextual approach on these issues will often mean exposure to the employer.

An adjudicator under the Canada Labour Code has held that looking at pornography on the Internet during work hours did not justify, in itself,

summary dismissal without progressive discipline. The fact that the viewing of pornography violated an employer’s rule did not displace the requirement of progressive discipline prior to

summary dismissal. It is most likely, in normal circumstances, a similar holding should result in a common law wrongful dismissal action. However, when the pornography involves something which is criminally forbidden, it may very well be that progressive discipline would not be required by the court. [ 35 ] The present case may be usefully contrasted to Backman v. Maritime Paper Products Ltd., where the dismissed employee persisted in searching the internet for and in accessing pornographic sites from his employer’s computer,

an activity he carried out knowing full well it violated a clear employment policy on point and despite exhortations by his superiors that he cease and desist. The strength of the trial judge’s finding of “just cause” in Backman percolates from the factual overview provided by Richard, J.A., who delivered this Court’s reasons for judgment: At or about the time he was hired, Mr. Backman was informed of Maritime Paper’s “Acceptable Use Policy” relating to electronic mail and internet use.

The policy states that “[t]ransmitting, viewing or storing inappropriate or unprofessional harassing, offensive, obscene or slanderous material using Maritime Paper Products’ computer resources is strictly prohibited” and that “[s]uch actions could result in disciplinary action up to and including dismissal.” Notwithstanding this, Mr. Backman was found to have accessed internet pornography sites from his employer’s computer. On September 12, 2002, the employer met with Mr. Backman to discuss the results of audits conducted in June and August of that year, in which it was revealed that Mr.

Backman had made inappropriate use of the internet on Maritime Paper’s computer. By letter dated a week later, the employer reminded Mr. Backman that his behaviour was contrary to the company’s Policy and was unacceptable. Mr. Backman was informed that the letter would be kept in his personnel file and that “[a]ny further incidents of this nature could result in discipline up to [and] including termination.” Despite the warning he received in September, 2002, Mr. Backman continued to access inappropriate sites from his employer’s computer. By letter dated April 11, 2003, the employer informed Mr.

Backman that a recent audit had revealed continued excessive and inappropriate use of the internet. The employer reiterated its policy on point and recommended that Mr. Backman consider using the company’s employee assistance program if his actions were the result of behaviour he had difficulty controlling. Mr. Backman was unequivocally warned that “[a]ny further incidents of this nature will result in immediate termination of your employment with Maritime Paper Products.” Despite these warnings, Mr. Backman was suspected to have engaged in similar unacceptable conduct in the spring of 2005.

At that time, a senior executive of Maritime Paper was made aware of certain suspicions, but he did not forward the information to Mr. Backman’s supervisor because he did not feel there was sufficient evidence of misconduct. However, an audit in the fall of 2006 revealed more inappropriate activity on Mr. Backman’s office computer. It disclosed that on October 23, 2006, Mr.

Backman had accessed inappropriate and pornographic web sites for almost three hours; had done the same the next day for approximately 1.5 hours; and also, on eight other days for periods of between 45 to 90 minutes. [paras. 3-7] [ 36 ] The case at hand deals with the

summary dismissal of longstanding employees with unblemished records of dedicated service. They were call center employees, not morality instructors. The emails relied upon to substantiate “just cause” were unsolicited. While neither respondent took steps to deter their common “friend” from transmitting “pornographic” emails to their work stations, none of the emails received were shared with fellow employees so that the issue of workplace harassment, evidently and rightly a major Asurion concern, is not in play.

As best can be determined from the admittedly limited material at our disposal, nothing in the nature of Asurion’s business warranted a “puritanical” or “absolutist” approach to discipline for an employee’s receipt and in solo viewing of sexually-explicit material in the relative privacy provided by his or her cubicle. Finally, Asurion does not contend the images attached to the emails at issue fall outside the category of “perfectly legal adult pornography” to which Fish J. referred in the majority reasons for decision in R. v. Morelli 2010 SCC 8 , [2010] 1 S.C.R. 253 , at para. 51 .

More broadly, it is not suggested the respondents’ conduct violated any provision of the Criminal Code of Canada . [ 37 ] Applying the contextual approach to proportionality adopted by the Supreme Court of Canada in McKinley v. B.C. Tel , the trial judge found the respondents’ “misconduct”, assessed objectively, did not reach the level of seriousness required to constitute just cause for

summary dismissal. In my respectful view, Asurion has failed to show that finding results from a palpable and overriding error in the assessment of the evidence, or is otherwise unreasonable. Having come to that conclusion, I considered it my duty to join my colleagues in dismissing the appeal from the Bench shortly after hearing counsel’s submissions on behalf of Asurion. I close the discussion with brief observations on the issue of costs on appeal. C.

Why an order of costs on appeal providing substantial indemnity? [ 38 ] Counsel for the respondents advised the panel their total legal fees for appeal-related services would approximate $10,000. Issue is not taken with the reasonableness of that estimate. After all, the appeals were prosecuted separately until the outset of the hearing in this Court, and the appellant raised numerous grounds of appeal, all of which required thoughtful, time-

consuming responses by counsel for the respondents. [39] Nevertheless, while the appeals fail, they were ably argued and far from frivolous. Indeed, theappellant raised several significant issues, highlighting, in the process, at least one error by the trial judge (his statement that theappellant bore the burden of proving “deceitful’ conduct on the respondents’ part). More generally and pertinently, the appellant has notengaged in “reprehensible, scandalous or outrageous conduct” in the prosecution of its case in this Court.

That state of affairs ruled out aprincipled award of costs on a solicitor-client basis (see Young v. Young, (SCC), [1993] 4 S.C.R. 3, [1993] S.C.J. No.112 (QL), at p. 134, per McLachlin J., as she then was, and Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, [2004] 1 S.C.R. 303). [40] However, in their written submissions, the respondents claimed – rightly, in my opinion – that,without an order of costs providing substantial indemnity, a significant portion of the judgment they obtained at trial would be lost,leaving them with little more than a pyrrhic victory.

Hence, my concurrence with separate awards of $4,500 for costs on appeal. IV. Conclusion [41] It is for those reasons that I joined my colleagues in dismissing the consolidated appeal, withcosts in this Court of $4,500 payable to each respondent. ____________________________________ J. ERNEST DRAPEAU, CHIEF JUSTICE OF NEW BRUNSWICK WE CONCUR: ______________________________________ M.E.L. LARLEE, J.A. _______________________________________ BRADLEY V. GREEN, J.A.