In Reference Re Public Service Employee Relations Act (Alta),  1 S.C.R. 313, a leading Supreme Court of Canada (the “SCC”) case, Chief Justice Dickson states:
“Work is one of the most fundamental aspects in a person’s life, providing the individual with a means of financial support and, as importantly, a contributory role in society. A person’s employment is an essential component of his or her sense of identity, self-worth and emotional well-being.’
This statement illustrates the importance of employment in one’s life. As a result, it is no surprise that employers are held to a stringent standard by the law when terminating employment. The overarching principle is that an employer may terminate non-unionized employees at any time without cause, except as limited by legislation, the common law, and contractual rights which provide certain entitlements to an employee who is terminated without cause, for example, notice of termination or payment in lieu of notice.
Employers are legally entitled to dismiss an employee at any time with “just cause”. If there is “just cause”, the employee is not entitled to notice of termination or payment in lieu. Accordingly, damages owed by the employer cannot flow from a termination with “just cause”. “Just cause” terminations are reserved for serious infractions by the employee. Conduct that offends the norms of society, for example, theft and physical assault would be grounds for immediate termination. But “just cause” can arise as a result of employee conduct that is less serious and more common in a workplace.
In McPhillips v British Columbia Ferry Corporation, (1994) 45 B.C.A.C. 311 (CA) the court stated that “dishonesty is always cause for dismissal because it is a breach of the condition of faithful service. It is the employer’s choice whether to dismiss or to forgive.” However, this broad statement has been narrowed in subsequent cases. What has arisen, in general terms, is an examination of whether the dishonesty has caused irreconcilable breakdown in the employment relationship because the trust between an employer and its employee has been broken.
The courts will take a contextual approach and look at the nature and degree of the employee’s conduct. It is important for employers to keep in mind that less serious sanctions short of dismissal may be more appropriate for less serious dishonest conduct. The court may also look to various mitigating factors, which may include the employee’s history, how long they’ve been employed for, and whether the conduct was premeditated.
The court will use a proportionality test to determine if incompetence warrants a dismissal. This test seeks to strike an effective balance between the severity of an employee’s misconduct and dismissal. The longer an employee has been with you, the harder it will be to convince the court that you legally terminated the employment relationship for incompetence.
In Kirby v. Amalgamated Income Limited Partnership, 2009 BCSC 1044, the court held that there were grounds to terminate for incompetence. The plaintiff helped start a mutual fund business and acted as the CEO. Here, the court looked at the cumulative effect of the plaintiff’s actions. Mere dissatisfaction and being a poor manager did not justify dismissal. The court stated four elements that must be met:
- The standard of job performance required must be communicated to the employee;
- Suitable instruction must be given to the employee to enable them to reach that standard;
- The employee must be incapable of meeting such standard; and
- There has been a warning that failure to meet that standard would result in dismissal.
If you are an employer or an employee with a question about workplace terminations, please contact our Employment and Labour Group.
This article is intended to be an overview of the law and is for informational purposes only. Readers are cautioned that this article does not constitute legal or professional advice and should not be relied on as such. Rather, readers should obtain specific legal advice in relation to the issues they are facing