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The law of just cause, revisited again

Image: CostcoCanada

A few months ago I provided a contribution to this blog concerning an update on the law of just cause. I am doing so again with today’s blog, not only because I am really interested in the law of just cause, but because judicial decisions that supported the defendant’s termination for just cause are quite uncommon and the factual circumstances are always quite interesting. Such is true in the newly released decision of Mykki Cavic v. Costco Wholesale Canada Limited.

Recently, Costco Wholesale was successful in defending an action against the plaintiff for wrongful dismissal. It was alleged by the defendant that the plaintiff was not entitled to seek damages given that her termination was for cause. In particular, she was terminated as a result of falsifying health benefit claims which were subsequently filed with her benefits carrier, and also for the failure on her part to provide a truthful explanation to the circumstances of her conduct when given the opportunity. The plaintiff was employed for 19 years by the defendant. She received an annual salary of $65,000.00 plus benefits (health, dental, life, dependant life, ADD, STD, and LTD) – all of which were fully paid by the defendant.

Costco is a “self-insurer” and retained Manulife to process and analyze all claims submitted by employees and to provide reimbursement of such claims. Manulife would thereafter invoice Costco for reimbursement.

The plaintiff testified that in 2004 she noticed “a phantom dependant” listed named Sarah Eve, identified as her daughter. She was of the view that this was obviously a mistake. She contacted Manulife to have the dependant removed. Two years later she discovered that the dependant had still not been removed and she contacted Manulife again. She was redirected to Costco. She signed a further enrolment confirmation form in 2006 attempting to delete “Sarah Eve” from her plan. Again she was unsuccessful. In 2010, she went online and found that Sarah Eve was still on her file and she again attempted to delete her from the plan.  She testified that in June of 2010 Sarah Eve still remained on her benefits plan. At this point, she became upset and frustrated and she decided to take matters into her own hands. In an attempt to gain attention from Manulife, she decided to falsify claims in Sarah Eve’s name. She submitted claims to Manulife for massage therapy, chiro treatment and acupuncture which together totalled $170.00. She received reimbursement in the name of Sarah Eve for the falsified claims submitted. It was her position that she did all this to simply gain the attention of Manulife in order to finally have this phantom dependant removed from her profile.

The confusing problem to recount was that when Manulife contacted her about Sarah’s claims she told them that Sarah Eve was in fact her daughter and did not request that they remove her from her benefits profile, which was her sole rational for submitting the falsified documents. Costco argued that the plaintiff simply wished to receive additional benefits prior to the termination of the medical plan which was soon set to expire (because a new plan was being introduced by Costco).

The plaintiff’s position was that the falsification was not done with the intent to deceive and only to bring attention of benefits insurer to the error in her profile and finally delete the phantom dependant.

The defendant also argued that the falsification of medical claims and the submission of those claims was dishonest and a violation of what was required of her as a manager, and particularly honesty and integrity. Another problem in the case of the plaintiff was that she falsified documents in the name of her son for treatment which he received in August of 2010 after the transition period had ended in the new flex benefit and the new benefit plan was in place. Her explanation was that she did not know that she was not entitled to allocate flex dollars between herself and her son interchangeably for treatment received by either of them.

The Judge, in assessing the plaintiff’s credibility, came to the conclusion that her explanations were simply not consistent or logical. The Laws of just cause tells us (as mentioned in my previous article), the onus is on the employer to show just cause for dismissal of any employee. As such, in cases of wrongful dismissal, each case is dependant upon and must be judged by its own facts.

A guidance with respect to determining whether just cause exists in a particular situation is provided by the Supreme Court of Canada case of McKinley v. BC Tel. The court stated in that case:

I favour an analytical framework that examines each case on its own particular facts and circumstances, and considers that nature and seriousness of the dishonesty in order to access 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 form of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty of going to the core of the employment relationship carries the potential to warrant dismissal for just cause.

Judge Carol J. Brown also referred to other cases which dealt with dishonestly, falsification of documents, misappropriation of benefits, and forgery, which have individually and in conjunction with one another, been held in the past to be justifiable cause for dismissal with cause. Justice Brown also noted cases that confirm that are breach of trust and dishonest conduct by an employee will constitute cause for termination.

The court found that the plaintiff’s explanation to the falsification and submission of the documents was simply not reasonable or credible. She noted that in mind to about Manulife about Sarah Eve being her daughter when asked, and failing to forthrightly tell her employer when asked during the investigation that she had falsified the documents and her justification therefore, constituted conduct so fundamental to the employer-employee relationship and to her managerial position that it constituted just cause for termination. The plaintiff was not entitled to payment without reasonable notice. Costco lost confidence in the plaintiff’s ability to fully discharge her duties and her dishonesty, undermined and seriously impaired the essential trust and confidence that they placed upon her. The employment relationship was not reconcilable past this point.

Matt Lalande practices employment law with Will Davidson LLP.
Matt can be reached at

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Matt Lalande, Lalande & Company Lawyers

Hamilton Personal Injury Lawyer at Lalande & Company Lawyers
Matt Lalande is a Hamilton lawyer and founder of Lalande & Company Lawyers. Lalande & Company is a Hamilton law firm that specializes in representing victims who have suffered life changing injuries, claimants denied long term disability, families of wrongful death victims and employment law litigation. Read more
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One thought on “The law of just cause, revisited again
  • Mykki Cavic says:

    It is unfortunate that Justice Carole J. Brown did not make it clear in her judgement that when Mykki received the call from Manulife about Sara-Eve it was six months after Sara-Eve was already removed from Mykki’s benefits. Sara-Eve was removed on July 2nd 2010, Manulife contacted Mykki Dec 2010, six months after. Costco and Manulife were negligent and did not remove Sara-Eve when Mykki followed policy and procedure to have her removed, but instead only took concern to the matter after Mykki took it into her own hands. There was never dishonesty between Mykki and her employer.