The engineering giant is defending itself against a nearly $1 million wrongful dismissal lawsuit filed by former controller Stephane Roy.
In a 16-page statement of defence filed in Quebec Superior Court, SNC-Lavalin said Roy and former executive Riadh Ben Aissa plotted to help Saadi Gadhafi and his family to flee Libya without its knowledge.
"They committed serious acts, outside their normal duties and without the knowledge of their superiors, in violation of SNC-Lavalin's code of conduct and in the blatant and total disregard of the policies and controls in place," it said.
It is seeking more than $1.8 million from Roy to cover expenses it says it later learned were paid by the company.
The engineering firm said its reputation was tarnished by illegal actions by Roy.
"It can never be adequately repaired, but it certainly constitutes an aggravating factor that should be taken into consideration by the court."
The former controller sued for wrongful dismissal, saying he was made a "scapegoat" and described as a "rogue employee" even though he claims to have always acted on the company's orders.
He said SNC-Lavalin created "a corporate culture where it was common practice to do all that was necessary, including the payment of 'commissions' and other benefits to obtain contracts, including in Libya."
SNC-Lavalin denies Roy's claims and said if his reputation is tarnished and he can't find a job it is entirely because of his actions.
Roy reported directly to Ben Aissa, who remains in custody in Switzerland on suspicion of laundering millions of dollars and bribing North African public officials. In Canada, Ben Aissa is accused, alongside former CEO Pierre Duhaime, with fraud relating to the construction of a new superhospital in Montreal.
Roy has never been charged.
An RCMP affidavit used to obtain a search warrant of SNC-Lavalin's headquarters named Roy as taking part in an effort to smuggle Saadi Gadhafi and his family into Mexico.
He couldn't be immediately reached for comment on Friday.
SNC-Lavalin (TSX:SNC) said Roy and Ben Aissa broke Canadian and international laws by secretly working to help Gadhafi.
The company said Roy made more than $18,000 in payments from his personal bank account to cover fees Gadhafi owed on his Toronto condominium.
The funds were later reimbursed by Ben Aissa but not SNC-Lavalin, the company said.
SNC-Lavalin said a United Nations prohibition on helping Gadhafi made the payments illegal.
It said Roy worked with Cynthia Vanier, who has recently released from 18 months of custody in Mexico, to create fake passports and Mexican documents for the Gadhafi family.
Vanier has proclaimed her innocence. She was released from prison after a tribunal of the Supreme Court of Mexico upheld her appeal against her arrest and detention.
In its legal filing, SNC cited emails from Vanier that it says suggest the initial plan was to get Gadhafi family into Canada, before sanctions against his travel made that impossible.
SNC-Lavalin said it discovered the connection with Vanier during an internal investigation at the end of 2011 and beginning of 2012.
It said Roy's contravention of UN sanctions caused a "rupture of confidence."
"This alone completely justified the termination of his employment," SNC added.
The company claimed Vanier proposed a fact-finding mission on the situation in Libya that was a cover for a secret project to extract Gadhafi.
It said Ben Aissa and Roy used new spending authority they were granted by SNC to pay Vanier and Gadhafi bodyguard $1.85 million.
In the court filing, SNC cited emails Vanier allegedly sent about the extraction plan.
"We have the ability to use another route that would mean that we do not go near Tunis at all. Straight into where we need to be. No hassles (seriously)," said the missive dated July 13, 2011.
Roy was arrested in Mexico in November 2011 along with two others and briefly detained. But he never informed his employer, only Ben Aissa, SNC said.
SNC-Lavalin's reputation and share price were hit last year after it unveiled an internal review that discovered $56 million in payments to undisclosed agents that led to the departure of Duhaime.
Duhaime has been charged with fraud over $22.5 million in payments relating to a hospital project in Montreal. He has pleaded not guilty through his lawyer to charges of fraud, conspiracy to commit fraud and issuing false documents.
Ben Aissa was arrested in April 2012 in Switzerland on suspicion of corruption, fraud and money-laundering in North Africa.
Ben Aissa's brother, Rafik, has filed a lawsuit alleging the company caused him harm for using his brother as a "scapegoat" while protecting its interests in Libya in the face of political change.