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Labour and Employment

An admitted fault is half forgiven

On January 2nd, 2023, an arbitrator confirmed that soliciting colleagues to participate in a pyramid scheme and lying to his employer on the matter constitutes sufficient grounds to justify the dismissal of an employee.

The facts of the decision

In this case[1], the employer is informed by the Police Service of Quebec City (SPVQ) that a pyramid scheme called the Mouvement du présent (French for “Movement of the present”), could be present on the employer’s premises.

Surprised, the employer quickly assigns an investigation mandate to an outside firm to validate whether the information received by the SPVQ is indeed true.

As part of the investigation, the plaintiff employee is met by the outside firm and denies any involvement with the Mouvement du présent at work and outside of work.

However, the investigation reveals that the employee is not only an active member of the Mouvement, but also one of the pillars that allowed the scheme to take root within the employer’s premises. In fact, he spoke of the Mouvement at the workplace to colleagues and gave many presentations on the Mouvement outside of the workplace and working hours. Some colleagues have participated in these presentations. 

The employer then decided to dismiss the employee for actively participating in a pyramid scheme in the workplace, for soliciting colleagues while knowing that this network is illegal and for lying and denying his implication with this network during the investigation. 

The arbitrator’s analysis

First, the arbitrator found that explaining a pyramid scheme to colleagues is likely to constitute solicitation in the workplace. 

Second, the arbitrator agrees that the more serious activities, namely the presentations on the Mouvement by the employee to potential new members, were done outside the workplace and working hours. However, he retains that the employee set “traps” during working hours to encourage his colleagues to participate in these presentations. In doing so, the employee cannot invoke the right to privacy in order to free himself from the actions he has taken.

Also, given the complexity of the case and the number of people implicated, the employer equipped himself with a grid of sanctions that vary depending on the alleged facts in order to ensure consistency between the sanctions. The acts of the plaintiff place him at the grid’s second level. This level provides for a suspension going from two weeks to a month for employees that have guided, explained or given presentations.

The union therefore argues that the employee should have been suspended and not dismissed.

On the other hand, the arbitrator retains the employer’s argument that the repeated denials from the employee during the investigation, his refusal to collaborate and his refusal to amend his version while many others accepted to do so, are considered aggravating factors that justify the deviation from the internal grid used by the employer.

In the same line of thought, the arbitrator mentions he doesn’t have the power to intervene on the sole basis that the employer doesn’t respect the sanctions grid since the use of said grid, a tool of his own making, is part of his management rights.

The arbitrator then dismisses the grievance, confirming the employee’s dismissal.

Key points to remember

Several elements can be drawn from this decision:

  • It isn’t a determining factor that the most serious acts were committed outside the hours and places of work, provided that these activities have a sufficient connection to the work environment;
  • The fact, for an employee, to persistently lie and deny any implication with a fraudulent activity during an employer’s investigation can justify a dismissal even if the initial alleged act is not, in itself, justifiable for dismissal; and
  • An internal decision-making tool used by the employer to decide a disciplinary sanction does not limit his management rights and is not binding for the arbitrator. 

For all other questions regarding your rights as an employer, don’t hesitate to communicate with our Labor and employment law team.



[1] Syndicat des employés de transport public du Québec Métropolitain inc. (CSN) c. Réseau de transport de la Capitale (RTC), 2023 CanLII 3 (QC SAT).

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