Lessons from Wilsher v. Olympic Wholesale, 2026 ONSC 3620
In Wilsher v. Olympic Wholesale, 2026 ONSC 3620, the Ontario Superior Court found that an employer wrongfully dismissed a long-serving night shift supervisor after terminating him for “time theft” based on a workplace practice that had been universally followed, known to management, and never prohibited.
The Court concluded there was no just cause for dismissal and awarded the employee 19 months’ pay in lieu of reasonable notice, together with an additional 14 months of Wallace damages for the employer’s bad-faith conduct in the manner of dismissal. The decision has attracted significant attention because awards of Wallace damages have been uncommon since the Supreme Court of Canada’s decision in Honda Canada Inc. v. Keays.
Background
The employee worked as a night shift supervisor at an Ontario wholesale distribution facility for approximately 17 years. Throughout his employment, he maintained a clean disciplinary record and was regarded as a reliable and trusted member of the supervisory team.
For at least 19 years, supervisors at the facility routinely made minor adjustments to employee timesheets to account for small clock-in and clock-out discrepancies. The practice was widely understood, consistently followed, and known to management.
Specifically:
- No written policy prohibited the practice.
- No supervisor had ever been disciplined for making these adjustments.
- Management had never instructed supervisors to stop.
- The practice had effectively become part of the workplace culture.
Following an internal audit, the employer identified the employee’s timesheet adjustments and terminated him for cause, characterizing the conduct as “time theft” and “falsification of records.”
The employer did not provide progressive discipline, give the employee an opportunity to explain his actions, or investigate whether other supervisors had engaged in the same conduct.
The Court Considered
The Court examined whether:
- The employer had just cause to terminate the employee.
- A longstanding workplace practice had become an implied term of the employment relationship.
- The employer acted in bad faith by characterizing the conduct as fraud and time theft.
What the Court Found
The evidence established that:
- The timesheet adjustment practice had existed for at least 19 years.
- Management knew about the practice and never prohibited it.
- No written policy prohibited the practice.
- No supervisor had previously been disciplined for engaging in it.
- The employee had 17 years of discipline-free service.
- The employer failed to investigate whether other supervisors had engaged in the same conduct.
- The employee was terminated without an opportunity to respond.
The Court concluded that the employer had singled out one employee for conduct that had long been accepted throughout the workplace.
The Court’s Decision
The Practice Was Effectively Condoned
The Court held that the employer had implicitly accepted the timesheet adjustment practice through nearly two decades of consistent tolerance. An employer cannot suddenly characterize a universally accepted workplace practice as misconduct without first clearly prohibiting it and giving employees notice of the change.
No Just Cause
Although the practice may have been technically improper, the Court found that dismissal for cause was not justified. Given the employee’s lengthy service, clean disciplinary record, and the employer’s longstanding acceptance of the practice, termination for cause was a disproportionate response.
Bad Faith in the Manner of Dismissal
The Court also found that the employer acted in bad faith by describing the employee’s conduct as “time theft,” “fraud,” and “falsification of records” despite knowing the practice had been tolerated for years. The Court concluded that the employer exaggerated the misconduct to justify a for-cause dismissal and avoid paying severance.
Remedies Awarded
The Court ordered the employer to pay:
- 19 months’ pay in lieu of reasonable notice, reflecting the employee’s age, length of service, character of employment, and the limited availability of comparable employment.
- 14 months of Wallace damages for the employer’s bad-faith conduct in the manner of dismissal.
The Court’s award has attracted attention because it represents an uncommon application of Wallace damages in a modern wrongful dismissal case.
Why This Decision Matters for Employers
This decision is a clear warning to employers who suddenly enforce a workplace rule that has been routinely ignored or applied inconsistently for years. Canadian courts have long recognized that workplace practices can become implied terms of the employment relationship when they are consistently followed, known to management, and never prohibited.
Where an employer attempts to rely on a previously tolerated practice as grounds for dismissal without first communicating a change in expectations, the courts may find that just cause has not been established. If the employer also acts unfairly or misleadingly in the manner of dismissal, additional damages may be awarded.
Employer Takeaways
| Lesson | Practical Recommendation |
| Audit unwritten workplace practices | Identify informal practices that have become accepted over time, particularly around timekeeping, scheduling, expense claims, and the use of company property. |
| Communicate policy changes clearly | If a longstanding practice is no longer acceptable, issue a written policy, explain the change, and allow employees reasonable time to comply before enforcing it. |
| Apply policies consistently | Address misconduct consistently across all employees. Selective enforcement can undermine an otherwise legitimate disciplinary decision. |
| Use accurate language | Avoid describing conduct as fraud, theft, or dishonesty unless the evidence clearly supports those allegations. |
| Use progressive discipline where appropriate | Long-serving employees with clean disciplinary records should generally be given an opportunity to correct their behaviour before dismissal. |
| Seek HR and legal advice before terminating for cause | For-cause dismissals carry significant legal risk and should be carefully assessed before proceeding. |
Final Thoughts
Wilsher v. Olympic Wholesale reminds employers that employment relationships are shaped not only by written policies but also by longstanding workplace practices. When employers knowingly tolerate a practice over many years, they cannot simply recharacterize that same conduct as serious misconduct without first providing clear direction and an opportunity for employees to comply.
The decision also highlights the importance of conducting fair investigations, applying workplace rules consistently, and ensuring that the reasons given for dismissal accurately reflect the facts. Employers who fail to do so risk significant liability for both wrongful dismissal and their conduct during the termination process.
Source: Wilsher v. Olympic Wholesale, 2026 ONSC 3620 (Ontario Superior Court of Justice, June 26, 2026).
CanLII link: https://www.canlii.org/en/on/onsc/doc/2026/2026onsc3620/2026onsc3620.html
