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After-Acquired Cause to Terminate

When an employer terminates an employee without cause, the employer must provide the employee reasonable notice. Where the employee is not provided reasonable notice, he or she may have a wrongful dismissal claim against the employer.

In some wrongful dismissal lawsuits, an employer may have a defense to the employee’s claim on the basis of “after-acquired cause”. Misconduct discovered by the employer post-termination may constitute grounds for just cause. The employer is required to establish that at the time of the dismissal there were facts sufficient in law to warrant a for cause dismissal: Van den Boogaard v. Vancouver Pile Driving Ltd., 2014 BCCA 168 at para. 34. When an employee is dismissed for just cause, the employer need not provide him or her with reasonable notice.

After-acquired cause concerns misconduct that took place during the employment. Post-termination misconduct cannot form the basis for just cause: Kirby v. Amalgamated Income Limited Partnership, 2009 BCSC 1044 at para. 161.

After-acquired cause, like any just cause termination, requires an assessment of proportionality. An effective balance must be struck between the severity of an employee’s misconduct and the sanction imposed: McKinley v. BC Tel, 2001 SCC 38 at para. 53. As the “capital punishment” in employment law, termination for cause must be proportional to the offense. The employee’s conduct must be so serious that lesser disciplinary measures are inappropriate in the circumstances: Payne v. The Kimberley Academy Ltd., 2020 BCSC 506 at para. 28.

However, if the employer knew of the misconduct and had expressly or implicitly condoned it, then the after-acquired cause defense will fail: Van den Boogaard v. Vancouver Pile Driving Ltd., 2014 BCCA 168 at para. 34.

The most common type of condonation is where an employer is aware of the employee’s misconduct, but does nothing and continues to employ him or her. Other forms of condonation include where the employer fails to discipline the other employees engaging in similar conduct, where the employer provided the employee in question with favourable performance reviews or where the employer fails to warn the employee in question: Eisler Estate v. GWR Resources Inc., 2019 BCSC 1990 at para. 210.

Shalagin v. Mercer Celgar Limited Partnership, 2022 BCSC 112 is a recent case where the judge assessed proportionality of multiple allegations of after acquired cause. The plaintiff was a Certified Professional Accountant and his employer operated a pulp mill. The plaintiff was terminated without cause on March 25, 2020. He made an Employment Standards Act complaint, a human rights complaint, and filed a claim for wrongful dismissal. The employer alleged having after acquired cause. The alleged causes included the plaintiff’s decision to surreptitiously record his co-workers and the plaintiff’s failure to return a work database.

The Court found there was no breach of duty in the plaintiff’s creation and maintenance of a database on his personal computer. This was particularly so in light of the fact that the plaintiff worked from home and was performing work on his home computer. Any fault was simply the failure to return the database after his dismissal. The Court found the retention of the database was innocent (paras. 67 and 68).

However, the Court found the plaintiff’s surreptitious recordings amounted to just cause. In the human rights proceeding, the plaintiff produced information about surreptitious recordings he had taken while employed. The plaintiff had recorded several one-on-one training sessions from 2010 to 2014; over 100 “Toolbox Talk” and safety meetings, at which he often presented personally; and at least 30 one-on-one meetings with supervisors and human resources personnel about compensation and recruitment (para. 24).

The Court found the surreptitious recordings amounted to just cause for a number of reasons. This included that the recordings demonstrated how the plaintiff’s sensitivities towards his colleagues’ privacy began to loosen. He knew his fellow employees would be uncomfortable with the recordings yet continued to make them. The Court found that he knew it was wrong, if not legally, at least ethically. In making the recordings he did not conduct himself as an employed CPA should have, taking into consideration his professional obligations. The Court also took into consideration that the recordings were designed to benefit him alone (para. 71).

After acquired cause may be a concern for an employee with a potential wrongful dismissal claim. An employer facing a wrongful dismissal claim may also want to consider this defense. The foregoing summary is not meant to be legal advice. As you can see from the case of Shalagin, after acquired cause involves a fact intensive assessment. Please consider contacting Mackoff Mohamed in this regard.


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