Terminating employees in Canada can be expensive. Non-unionized employees are owed “reasonable notice” under the common law, or pay in lieu of such notice, which can lead to significant payouts to terminated employees. The only exceptions are if an employee is employed on a fixed term, has a defined contractual entitlement on termination or “just cause” exists for termination.
The case law has set a very high standard for just cause. The applicable legal test, outlined by the Supreme Court of Canada in McKinley v BC Tel, requires courts to apply a contextual analysis to determine whether just cause exists. The court must consider the nature and severity of the misconduct in relation to the impact on the employment relationship. Just cause will be found where there is an irreparable breakdown of the employment relationship.
In order to satisfy the McKinley test, the conduct must be serious in its impact on the employer. The employer has the burden of proving that the employment relationship cannot be repaired and that other options, such as discipline, would be insufficient to restore the relationship. This makes it challenging for employers to prove just cause, especially in relation to a single incident of misconduct. Only the most serious forms of misconduct will usually amount to just cause where the employer is relying on a single incident.
Steel v. Coast Capital Savings Credit Union
Nonetheless, a recent decision of the British Columbia Court of Appeal found just cause for dismissal of a long service employee existed for a single incident of misconduct. In Steel v. Coast Capital Savings Credit Union, the plaintiff was an IT Helpdesk Analyst who had been employed with the company for over 21 years. She was fired for cause after she accessed a confidential document in violation of the company’s internal privacy protocols.
The plaintiff was part of a team that provided internal technical assistance to other employees of the company. The company assigned personal folders to all of its employees which were kept on a network. Each personal folder was to be used solely by the employee to which it was assigned. The company had established a detailed protocol for IT employees to follow when accessing personal folders of other employees who required technical assistance. The plaintiff was aware of the protocol and knew that if she violated the protocol she could be terminated from employment. Despite this, the plaintiff improperly and intentionally accessed the personal file of her manager for her own purposes. The plaintiff’s employment was terminated for cause as a result.
The trial judge found that there was cause for the plaintiff’s termination. The company had policies and protocols in place in order to protect privacy and confidentiality. The plaintiff was aware of these policies and expected to follow them. In her IT role she had access to confidential documents and was in a position of trust. The trial judge found she violated this trust by opening a confidential document in another employee’s file for her own purposes, and by violating the protocols which governed situations where access to such documents was permitted.
The British Columbia Court of Appeal found that the trial judge applied the contextual approach outlined in McKinley. The lower court considered the nature of the misconduct and whether this was reconcilable with a continuing employment relationship. The lower court found that a fundamental obligation of an employee in the plaintiff’s IT role was to only access confidential documents in accordance with the privacy policies. The Court of Appeal found that it was open to the trial judge to find that this obligation put the plaintiff in a position of substantial trust, and that a breach of this trust was a fundamental breakdown in the employment relationship.
The fact that the employer had clear privacy policies in place and took privacy matters very seriously helped support its case for just cause. This demonstrates the importance of having clear written policies setting out workplace rules and procedures. Employers without such policies often find their case for just cause is compromised because the employee claims not to have been aware of the policies.