Written employment agreements often contain clauses permitting employers to dismiss employees for “cause” or “just cause”. Where this is not in writing, the employment agreement would normally include an implied, unwritten term permitting dismissal for just cause. Put another way, the law says such an implied term should be inferred as part of the employment relationship.
Just cause is a legal term that means in certain circumstances an employer can terminate an employee without providing reasonable notice and with no obligation to pay damages. There is no clearly established method of predicting what will constitute just cause – our courts consider the relevant circumstances of each individual case.
The leading Canadian case on just cause dismissal is McKinley v. BC Tel. One of our founders, Murray Tevlin, represented Mr. McKinley at all court levels, including in his successful appearance at the Supreme Court of Canada. McKinley involved an allegation of just cause because of alleged dishonesty. The court entered into a contextual analysis of the conduct of the plaintiff, and found that any established misconduct was not sufficient to destroy the employment relationship and lead to a finding of just cause.
Courts focus closely on the particular alleged misconduct to decide if it is sufficient to dismiss an employee without reasonable notice. The primary inquiry is whether the employee’s misconduct caused a breakdown in the employment relationship, by either violating an essential condition of the employment contract, or destroying the employer’s faith in the employee. If the employer can clearly establish these circumstances at trial, just cause will have been established.
The court will consider whether the evidence supports a finding of misconduct, and whether summary dismissal is a proportionate penalty for the nature or degree of this misconduct.
Employee behaviour that prompts a consideration of just cause for dismissal is often considered within various categories, including: (i) poor performance, (ii) dishonesty and misconduct (iii) theft or fraud (iv) insubordination and other sometimes overlapping categories.
In many situations, courts like to ask whether an employer gave a warning before termination. Where there was no clear warning before the dismissal that such misconduct could result in termination, except in the most serious of cases, the employer will most often find it difficult to establish just cause. Warnings are appropriate in situations where the employer’s alleged just cause is based on poor job performance, breach of company policies, and minor examples of insubordination. Warnings would not be required in more serious cases of just cause based on (for example) dishonesty, theft, or fraud.
Where an employer attempts to establish just cause, in some cases, serious misconduct on the part of the employee which might have established the existence of just cause cannot be relied upon because the employer knew of the misconduct for a period of time and did nothing to act on it. This is a legal principle called “condonation.”
If your case is one that may involve the difficult issues of “cause”/”just cause”, you should seek legal advice from a lawyer who has experience in this area.