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| Stuart Rudner |
To those who insist that “it is impossible to fire someone in Canada,” I respond that “just cause is not a lost cause,” which is a phrase I started using when writing my book, You’re Fired! Just Cause for Dismissal in Canada. The reality is that my book is filled with cases in which for-cause dismissals were upheld. I update the book twice a year, reviewing all just-cause cases. And every year, many of the decisions affirm that the dismissal was warranted.
It’s disheartening to hear so many professionals dismiss the possibility of summary dismissal. While I never advocate for dismissal without a strong case, I believe just cause has its place, and courts will agree under the right circumstances.
High threshold and context is crucial
Summary dismissal is often called the “capital punishment of employment law” due to its severe consequences; an employee fired for cause loses entitlements to notice, termination pay and severance, which can be a huge loss. Hence, the threshold for establishing cause is high. Proportionality is an important consideration. In many cases, courts will find that discipline was warranted, but summary dismissal was too harsh a penalty.
Focus on the relationship
When assessing whether just cause for dismissal exists, the core issue is whether the misconduct irreparably damaged the employment relationship. In order to make that assessment, the courts will apply a contextual analysis in which they consider all relevant factors of the employment relationship, and not just the isolated incident.
Courts assess the context, including:
- Length of service
- Disciplinary history
- Nature of the role
- Level of trust required
- The employee’s response when confronted
These factors can work both ways. While they often lead to a finding that dismissal was unwarranted due to mitigating factors, some recent cases have seen them used to justify dismissal where it otherwise might not have been. For instance, in Mechalchuk v. Galaxy Motors (1990) Ltd., 2023 BCSC 635, the main issue involved false expense claims totalling roughly $250. Although the amount was relatively small, the employee’s managerial role, requiring a high degree of trust, and his lack of remorse, led the court to find that the relationship was beyond repair and summary dismissal was warranted.
A thorough investigation, including confronting the employee, is essential. This may reveal mitigating factors or even a misunderstanding, all of which are better discovered before than after dismissal. More frequently, the employee will compound their mistake by lying, adding dishonesty to the reasons for dismissal. A contrite employee offering reasonable assurances that they will not engage in future misconduct may warrant another chance, while dishonesty and defiance strengthen the case for dismissal.
Avoiding self-sabotage
Employers can undermine their position in a few ways:
- Failing to assert just cause: To avoid conflict or help the employee collect severance or employment insurance benefits, employers may choose to process the dismissal on a without-cause basis even when they believe they have just cause. This can backfire if the employee pursues a wrongful dismissal claim and the employer later wants to raise just cause as a defence. While one Court of Appeal decision exists in which the employer was allowed to rely on a just cause defence where the evidence showed that they had not asserted cause earlier in an effort to avoid conflict, most judges will not allow an employer to do so if just cause was not even mentioned at the time of dismissal. As a result, it is usually a mistake not to assert just cause if an employer believes that it exists. If an employer wants to help the employee and/or minimize risk, they can assert just cause, but also make a without-prejudice offer of payment in exchange for a full and final release. This will make it easier to settle the case, but also allow the employer to assert just cause if a settlement cannot be reached.
- Keeping the employee in the workplace: Allowing the employee to continue working while investigating completely undermines the claim that the relationship was irreparably damaged. After all, it is difficult to credibly assert that it would have been impossible to keep employing the individual in question after the employer did exactly that. If an employer suspects that they may proceed with a just cause dismissal, they should put the employee on an administrative leave while they investigate and then terminate once they make their decision. Do not wait for a convenient time.
- Poor documentation: While a single instance of misconduct can justify summary dismissal in some cases, progressive discipline is often expected. True progressive discipline involves clear warnings about the consequences of future misconduct, including dismissal. Most employers fail to do this properly, creating only vague documentation of concerns.
Pith and substance
It’s unfortunate that few cases reach trial, limiting the development of case law on summary dismissal. However, the numerous decisions analyzed in my book updates show that just cause is achievable.
Employers and their counsel should not dismiss the idea of dismissal for cause in appropriate circumstances, and employees and their counsel should be aware that it can happen and may be upheld. Just cause is not a lost cause, but the threshold is high.
I wish you all a joyful holiday season and a happy, healthy new year.
Stuart Rudner is a leading Canadian employment lawyer and mediator at Rudner Law. He is the author of You’re Fired! Just Cause for Dismissal in Canada. He can be reached at 905-209-6999 or stuart@rudnerlaw.ca.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, LexisNexis Canada, Law360 Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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