Terminating "Just Cuz" Or For Just Cause? Recent Decisions Maintain A High Threshold For Just Cause Terminations

• Published date: 17 March 2021
• Subject Matter: Employment and HR, Unfair/ Wrongful Dismissal, Health & Safety, Redundancy/Layoff
• Law Firm: Stikeman Elliott LLP
• Author: Ms Sheena L. Owens and Maja Blanchette

Courts are increasingly reluctant to find that employers have just cause to terminate their employees: Underhill v Shell Canada Limited, 2020 ABQB 341; Mack v Universal Dental Laboratories Ltd, 2020 ABQB 738; Baker v Weyerhaeuser Company Ltd., 2020 ABQB 808; and Nagy v. William L. Rutherford (B.C.) Limited 2021 BCCA 62.

For many employers, 2020 was a difficult year. On top of the challenges that COVID-19 presented, employers have had to grapple with several unfavourable employment law decisions. The Alberta Court of Queen's Bench has continued this trend in three recent decisions that all favoured employees and found that the employers did not have just cause to terminate the employees' employment. Additionally, the British Columbia Court of Appeal overturned a finding of after-acquired just cause for dismissal and remitted the matter back to the trial court. Each of these cases is discussed in greater detail below, following a review of the general principles of just cause terminations.

General Principles of Just Cause Terminations

Absent an enforceable termination provision in an employment agreement, employers have an implied contractual obligation to provide indefinite term employees with reasonable notice of termination unless there is just cause for termination of their employment. This obligation can be significant and in some cases as much as 24 months, and in exceptional cases more than 24 months. If working notice cannot be provided, then the employer must pay the employee the compensation the employee would have earned had the employee worked through the notice period. Therefore, establishing just cause, when it is appropriate to do so, can result in significant savings.

Generally, just cause is serious misconduct that is inconsistent with the fulfillment of the conditions of employment or that causes a breakdown in the employment relationship. Employers can sometimes successfully terminate an employee for just cause if the employee has been guilty of habitual neglect of duty; gross incompetence; conduct incompatible with the employee's duties; conduct that is prejudicial to the employer's business; or willful disobedience.

Each case is fact specific. Some prior findings of just cause include theft, dishonesty, serious breaches of workplace policies, violence or harassment in the workplace, unexcused absences from the workplace, insubordination, criminal conduct, serious conflicts of interest, and prolonged and documented performance issues.

In order to uphold just cause, the employer must prove that the conduct of which the employer complains actually occurred and that the conduct warrants dismissal.

Employers must ensure that the disciplinary response is proportional to the...