With contributions from Trevor Thomas, Lawyer.
While the phrase “just cause” has become a part of the public lexicon (so much so that it has been used as the title of a popular action-adventure video game), the term actually has a specific legal meaning that few non-lawyers are fully familiar with. In fact, in our experience, many employers confuse having a reason for firing someone with having just cause to do so. Since “just cause” dismissals are part of our bread and butter as employment lawyers, we thought we would write this blog post in an effort to clear up some of that employer confusion. For those of you seeking some clarity, read on…
- No duty to offer notice or severance. If an employer has “just cause” to dismiss an employee, the employer is NOT legally required to provide the employee with reasonable notice of termination (or severance in lieu of that notice).
- Serious misconduct required. As we have discussed elsewhere in this blog , just cause will generally exist if an employee has been guilty of serious misconduct, habitual neglect of duty, incompetence, or willful disobedience. Examples of such misconduct include theft and routine insubordination. Sometimes, however, even if an employee’s actions fall into one of the categories of misconduct generally recognized as amounting to cause, the employer may still not have legal “just cause” for termination.
So, what’s an employer to do? The short answer is, consider the context. But what does that mean? The answer to this question is one of those “need to knows” for employers, because if you fire for cause, and you’re wrong, you could open yourself up to an award of damages in a wrongful dismissal claim by your ex-employee.
George and McKinley : The Contextual Analysis Approach
Luckily, last month, the British Columbia Supreme Court revisited the meaning of “just cause” for termination, and reviewed the contextual approach outlined by the Supreme Court of Canada (SCC) in the seminal case of McKinley v. BC Tel, 2001 SCC 38. In this blog post, we review the recent decision in George v. Cowichan Tribes, 2015 BCSC 513, and offer some important reminders for employers who are questioning whether there they have cause for a particular dismissal.
George involved a wrongful dismissal claim by an employee who was fired for cause after 33 years on the job. The alleged misconduct involved physical assault, threats and dishonesty. Ultimately, the Court found insufficient evidence to support the employer’s cause allegations, and ruled in the plaintiff’s favour, awarding her damages equivalent to 20 months’ notice.
While this case is factually interesting, its real importance derives from the Court’s summary of the legal principles relevant to the notion of just cause. Relying heavily on the McKinley case, the Court offered a helpful review of the key aspects of a cause analysis. Here are some of the highlights:
- The “capital punishment” of employment law. The Court emphasized the importance of work and the essential role it plays in a person’s life, and described dismissal for cause as the “most severe punishment known to Canadian employment law”, explaining that it is the “capital punishment of employment law and only the most egregious misconduct can justify it.”
- Contextual analysis. The Court then discussed the “contextual analysis” approach which both employers and courts must follow when assessing whether cause exists. Key to the contextual analysis is the need to strike a balance between the employee’s conduct and the sanction imposed. As the SCC explained in McKinley, without considering the nature and circumstances of the particular misconduct, it would be impossible to conclude that that misconduct was sufficient to justify dismissal without notice.
- Nature and circumstances. When examining the “nature and circumstances” of the misconduct, an employer should consider the following:
- How severe was the employee’s misconduct?
- Where did the misconduct take place (at work, outside of work hours, etc.)?
- Were there any reasons for the misconduct (i.e. any mitigating factors)?
- Was there an alternative to dismissal for just cause (for example, suspension)?
- Two key principles. Ultimately, the Court in George found that two key principles emerge from the McKinley decision:
- First, in considering whether cause has been established, the court must engage in a contextual analysis of all the relevant facts and circumstances; and
- And second, the objective of the contextual analysis is to determine whether the misconduct is such that it has led to a breakdown of the employment relationship or is otherwise irreconcilable with the continuation of that relationship.
Implications for Employers
The key takeaway here for employers is: don’t act rashly when responding to employee misconduct. Rather, consider the employee’s actions in light of all the surrounding circumstances before you assert cause for termination and fire her without notice or pay. If you are not sure whether you have cause, we strongly suggest you discuss your situation with an employment lawyer, who will be familiar with the types of circumstances that courts generally view as giving rise to cause for dismissal.
Have questions about whether you have just cause to dismiss an employee? Contact us!