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Assessing whether just cause is warranted: A yearly review

In the course of updating my text, You’re Fired! Just Cause for Dismissal in Canada, I review every single court and arbitrator’s decision dealing with just cause for dismissal. Not surprisingly, these can be pretty entertaining. However, the cases also confirm a few truths:

  1. The threshold for establishing just cause for dismissal is quite high, as the punishment must be a proportionate response.
  2. In assessing whether just cause is warranted, the alleged misconduct cannot be considered in isolation; all relevant circumstances must be taken into account.
  3. As I often say, “just cause is not a lost cause”; summary dismissal will be upheld in appropriate circumstances.

One of the recent decisions I reviewed is Roe v. British Columbia Ferry Services Ltd., which was decided after a summary trial. That is notable in the sense that the court was willing to use a summary procedure even though the primary issue was whether or not just cause for dismissal exists. Traditionally, when allegations of cause were made, our courts have insisted that the case proceed through the ordinary litigation process. However, in recent times and in light of the Supreme Court of Canada decision in Hryniak v. Mauldin, more and more cases have been decided using summary procedures even where more contentious issues exist. Some employment-related examples include Beatty v. Best Theratronics Ltd. and Younger v. Canadian National Railway Company.

In Roe, judgment was rendered orally and the Judge began by summarizing the factual background:

The plaintiff, Gregory Roe, was the manager of the Duke Point Ferry Terminal from 15 November 2007, until his dismissal on 1 March 2012. Mr. Roe was fired two weeks after he gave $70 worth of complimentary dessert and beverage vouchers to his daughter’s volleyball team when they travelled by ferry to the mainland for a tournament.

The case is instructive in how the court assessed the issue of whether there was just cause for dismissal. The court summarized the analysis as follows

[3] The defendant has the burden of proving on a balance of probabilities that the plaintiff’s conduct justified dismissal. Both parties referred me to McKinley v. BC Tel, 2001 SCC 38, and they agree that this case is the controlling authority. In McKinley at para. 49, the court lays down a two-part test in cases of dismissal for alleged dishonesty. The trial court must determine: (1) whether the defendant has proved the alleged conduct on a balance of probabilities, and, if so, (2) whether the nature and degree of dishonesty warrants dismissal.

[4] On the second the part of the test, all of the circumstances of the case are to be examined to determine whether summary dismissal for dishonest conduct is a proportional response by the employer. The court clearly rejected the alternative “bright line” approach, that is, the approach that would have it that dishonesty in any measure amounts to just cause for dismissal. In his reasons for the court at para. 57, Iacobucci J. wrote:

. . . I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers the nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship. Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause.

For the purpose of this analysis, the court assumed that the misconduct could be established. The majority of the decision is devoted to the second prong of the test, which is whether dismissal was warranted.

[8] Does the nature and degree of dishonesty alleged by the defendant warrant summary dismissal? I conclude that it does not. In coming to this conclusion, I accept the defendant’s submissions that Mr. Roe held a position of considerable responsibility and trust. He was one of three persons sharing the most senior management position on site at the terminal, responsible for overseeing and supervising all employees at that location. His responsibilities included ensuring that all cash at the terminal was properly accounted for. If he knowingly breached company policy in giving out these vouchers, Mr. Roe made a significant mistake, a mistake to some extent magnified by the fact that this daughter was one of the beneficiaries of the voucher distribution.

[9] McKinley instructs me to consider the “nature and seriousness of the dishonesty in order to assess whether it is reconcilable with sustaining the employment relationship”. I am not persuaded by the defendant’s submissions that the conduct is, as counsel for the defendant put it in oral argument, “terrifically serious”. In fact, I would place this conduct at the lower end of spectrum. While not a determinative consideration, the amount involved is trifling, and there was not a great amount of prestige or other non-monetary personal gain to be achieved for the plaintiff by the voucher distribution. This was in no sense a nefarious scheme, and the defendant does not suggest that it was ̶ Mr. Roe took no steps to attempt to deceive or cover his tracks.

[10] In short, as to the nature of the dishonesty, this is not a case of deception. As to seriousness, the extent of the gain is very slight, bordering on trifling, although I accept that the plaintiff’s position as a terminal manager, and the corresponding obligation to lead by example, is an aggravating factor.

[11] I reject the contention that the alleged behaviour was not reconcilable with a continuation of the employment relationship. Disciplinary measures short of dismissal would have been proportionate to the alleged conduct. Any knowing breach of policy or misuse of company property by an employee in a position of considerable responsibility is to some extent a breach of the trust that an employer reposes in that employee. But when this apparently otherwise reliable employee allegedly strayed from the path in what I have found is a relatively minor way, the defendant has not demonstrated to me, on a balance of probabilities, the soundness of its contention that this employee cannot thereafter be trusted to carry out his duties.

In conclusion, the court wrote as follows:

[16] In summary, even the strongest version of the defendant’s case if proven would not be sufficient to persuade me that summary dismissal of its employee was warranted.

While delivered orally, the summary above is an excellent example of how courts should approach allegations of just cause. As the court indicates, even if one assumes that the employee was guilty of misconduct that is only one aspect of the analysis and far from determinative. All relevant factors and mitigating circumstances are to be taken into account.

Having found that summary dismissal was not warranted, the court considered the typical factors in assessing the common law reasonable notice period. The plaintiff was 50 years of age and had been employed for four years and three months in a position of very significant responsibility. The court found that 11 months was reasonable, but reduced the award to ten months as the plaintiff had found new employment.

This decision is an excellent reminder of the factors that must be taken into account when an employer considers summary dismissal or an employee must assess whether they were wrongfully dismissed. It is a concise but helpful review of the law of summary dismissal.

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Stuart Rudner

Employment Lawyer at Rudner MacDonald LLP
Stuart Rudner is a leading HR Lawyer and a founding partner of Rudner MacDonald LLP, a firm specializing in Canadian Employment Law. He provides clients with strategic advice regarding all aspects of the employment relationship, and represents them before courts, mediators and tribunals. He is the author of You’re Fired! Just Cause for Dismissal in Canada, a textbook and database of summary dismissal cases published by Carswell. Read more
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