Aug 21, 2023  By John Hyde

Arbitrator Upholds Dismissal of Employee for Sexually Harassing Co-Worker While Off-Duty

Arbitrator Upholds Dismissal of Employee for Sexually Harassing Co-Worker While Off-Duty

An Alberta arbitrator recently ruled that the City of Calgary (the 'City') had just cause to dismiss a unionized employee for sexually harassing and sexually assaulting a co-worker, despite that it occurred while they were off-duty and outside the workplace. In The Corporation of the City of Calgary v. Amalgamated Transit Union, Local 583 [City of Calgary], Arbitrator James Casey dismissed a grievance challenging the for-cause dismissal of Bikesh Sharma ('Sharma') because he found that Sharma engaged in misconduct of the most serious kind which impacted the City's legitimate business interests, notwithstanding the off-duty nature of the misconduct.

This decision illustrates that an employee's off-duty misconduct can establish cause for their dismissal in appropriate circumstances, and it provides employers with valuable guidance regarding the factors that adjudicators consider when determining whether off-duty conduct establishes cause.


Sharma had been working for the City as a bus driver for approximately 16 years when he sexually harassed and sexually assaulted a female co-worker ('AB') while they were taking a car for a test drive outside of work. Sharma and AB were work acquaintances who met during a training class when they were first hired, but they had never socialized outside of work.

One day Sharma had approached AB at work to ask why she did not have a car after he noticed that she rode a bike to work even when it was very cold. After AB said that she could not afford a car at the time, Sharma told her that his uncle was selling a car for $500, and he offered to accompany her on a test drive.

Sharma persistently made sexual advances on AB during the test drive, despite the fact that she repeatedly told him she was not interested. Sharma initially tried to hold AB's hand while she was driving the car, but she told him she was not interested in him and noted that he was married. Sharma then suggested that they should be 'friends with benefits', but AB again said she was not interested. Next, Sharma suggested that he and AB could 'fool around', which AB also declined. Sharma subsequently gave AB a ride home after the test drive and asked her if she would invite him inside her house, but she said no. Finally, as AB went to give Sharma a quick hug while saying goodbye, he touched her breast without her consent.

AB shared what happened with her supervisor about 9 months later, and the City commenced an investigation into the incident as a result, even though AB had indicated that she did not want to make a formal complaint. Sharma was dismissed for cause after the investigation found that he had sexually harassed and sexually assaulted AB, notwithstanding that he had been employed by the City for nearly 17 years without any prior discipline or misconduct.

As a result, Sharma's union filed a grievance challenging his dismissal and seeking to have him reinstated to his employment.

The Arbitrator's Decision

Arbitrator Casey ruled that the City did have cause to dismiss Sharma, despite the off-duty nature of his misconduct, because he found that sexually assaulting a co-worker was misconduct of the utmost seriousness and that it impacted the City's legitimate business.

In reaching this conclusion, the Arbitrator held that employers have no authority over employees' off-duty conduct, except where the employers' legitimate business interests are impacted in some way. The Arbitrator held that, to justify disciplining or dismissing an employee for off-duty misconduct, the employer must prove that the employee's behaviour: (i) harmed the employer's reputation; (ii)  made the employee unable to satisfactorily fulfill the duties of their employment; (iii) caused others in the workplace to be unwilling to work with the employee; (iv) detrimentally affected the employer's ability to efficiently manage its operations; or (v) constituted a serious breach of the Criminal Code. Moreover, the Arbitrator further held that employers do not need to prove all five criteria to justify discipline or dismissal, and that proving a single one may be sufficient, depending on how seriously the off-duty misconduct impacted the employer's interests.

The Arbitrator found that Sharma's off-duty misconduct did sufficiently impact the City's interests as an employer to justify a disciplinary response. This is because Sharma's misconduct: (i) harmed the City's reputation; (ii) prevented him from effectively performing his role going forward; (iii) would cause his coworkers to be reluctant to work with him, especially female co-workers; and (iv) would create operational challenges for the City, in that it would be difficult to ensure that AB would not encounter him while working. Notably, one of the reasons that the Arbitrator found that Sharma's misconduct would harm to the City's reputation and impact his ability to perform his duties was that Sharma was employed in a position of trust, in that he was expected to be an ambassador for the City while he worked closely with members of the public each day, which included vulnerable individuals.

Finally, the Arbitrator held that Sharma's dismissal was not an excessive penalty considering the relevant circumstances. These circumstances included: (i) the seriousness of the misconduct; (ii) the City's legal obligations to ensure the health and safety of its workers; (iii) Sharma's seniority and disciplinary record; (iv) the lack of progressive discipline before Sharma's dismissal; (v) the impact of the dismissal on Sharma; (vi) the impact of the misconduct on AB; and (vii) the potential for Sharma to be rehabilitated. Notably, the Arbitrator found that sexual assault is the most serious form of sexual harassment, which weighed strongly in favour of Sharma's dismissal, as did the City's duty to ensure the health and safety of its employees. Moreover, the Arbitrator found that there had little potential for Sharma to be rehabilitated given that he failed to accept responsibility for his actions by continuing to insist he had not touched AB's breast and that there was no sexual intent behind his requests to be 'friends with benefits' and to 'fool around' with AB. As a result, the Arbitrator ultimately found that these factors outweighed the mitigating factors, such as the lack of progressive discipline, Sharma's nearly 17 years of seniority, and his previously clear disciplinary record.

In the result, the Arbitrator held that the City had cause to dismiss Sharma and the union's grievance was dismissed.

The Bottom Line

City of Calgary illustrates that employers can successfully terminate an employee for cause due to off-duty misconduct, where the misconduct impacts the employer's legitimate business interests, even though employers do not otherwise have the authority over what employees do outside of work. This means that employers can have effective legal recourse to end employment relationships with employees whose conduct outside of the workplace has negatively impacted the employer's interests, even where that employee is unionized, without having to pay substantial amounts of severance.

However, this decision also illustrates that there are many factors which are relevant to whether off-duty misconduct establishes cause for an employee's dismissal, and that these factors must all be weighed against one another. Accordingly, employers should seek specific legal advice prior to dismissing an employee for cause based on off-duty conduct, in order to avoid facing additional liability if the dismissal is not reasonably justified.

If you require any advice regarding how to appropriately address employee misconduct or performance issues, or assistance with ending an employment relationship while minimizing liability, please do not hesitate to contact us for expert legal advice and guidance.

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