Casual Legal: Misconduct and terminating without cause

By Lauren Chalaturnyk
Reynolds Mirth Richards Farmer LLP
Alberta Municipalities Casual Legal Service Provider

“Can a “without cause” dismissal be recharacterized later as being “for cause” when the material circumstances were known to the employer before the dismissal?” A recent Court of King’s Bench decision answered this question with a clear and unequivocal “no”.

In this recent case, the Director of the Council for the Advancement of African Canadians in Alberta (the “Africa Centre”) had been terminated without cause. He was paid eight weeks’ severance, which represented the minimum he was required to be paid under the Employment Standards Code. At the time of his termination, the Africa Centre was aware of allegations regarding bullying, harassment, and sexual harassment on the part of the Director. These allegations had largely been dismissed by an independent investigator.

When the Director sued the Africa Centre for wrongful dismissal, alleging the eight weeks he had been paid was lower than what he was entitled to as a result of the termination, the Africa Centre changed its position and argued it did not owe him any further amounts because it actually had cause to terminate his employment. It relied on additional information it claimed was discovered following his termination, which contradicted the report of the independent investigator.

Ultimately, the Court found the Africa Centre had all of the material information it needed about the allegations against the Director at the time of his termination and it deliberately decided to terminate him without cause. As a result, the Africa Centre could not, now, argue it had cause to terminate the Director. The Court determined the Director was entitled to 14 months of pay in lieu of notice for the termination.

While this has been a longstanding principle in employment law, it is important for employers to remember that where they are aware of misconduct or inappropriate behaviour at the time of termination, they will need to carefully consider whether they will terminate with or without cause. That is because they will not be able to change their minds later.

There are many factors to consider when deciding whether to terminate with or without cause, especially where there is proof of misconduct or inappropriate behavior. It is always good practice to seek legal advice before making that decision.

Given this recent Court of King’s Bench decision, that is especially the case, since employers will not be able to change their mind to a for-cause termination after the fact.

To access Alberta Municipalities Casual Legal Helpline, Alberta Municipalities members can call toll-free to 1-800-661-7673 or send an casuallegal [at] abmunis.ca (email) to reach the municipal legal experts at Reynolds Mirth Richards and Farmer LLP. For more information on the Casual Legal Service, please call 310-MUNI (6864) or send an riskcontrol [at] abmunis.ca (email) to speak to Alberta Municipalities Risk Management staff. Any Regular or Associate member of Alberta Municipalities can access the Casual Legal Service.

DISCLAIMER: This article is meant to provide information only and is not intended to provide legal advice. You should seek the advice of legal counsel to address your specific set of circumstances. Although every effort has been made to provide current and accurate information, changes to the law may cause the information in this article to be outdated.