In Cavic v. Costco Wholesale Canada Ltd. the Employee,
Ms. Mykki Cavic, who had worked for the Employer, Costco Wholesale
Canada Ltd., for approximately 19 years, was terminated for cause
after it came to the Employer's attention that the Employee had
falsified her health benefit claims and had failed to provide a
truthful explanation regarding her conduct on three separate
Specifically, in or about 2004, the Employee, who was a Night
Floor Merchandise Supervisor for the Employer, noticed a
"phantom dependent" wrongfully listed on her benefits
profile as her daughter. The Employee contacted the insurance
provider on multiple occasions in an attempt to have the phantom
dependent removed. Unfortunately, her efforts were unsuccessful. As
a result, in 2010, the Employee attempted to obtain the insurance
provider's attention of the ongoing issue by falsifying
documents and submitting false claims under the phantom
dependent's name, for which the Employee received
reimbursements. However, following the submission of the falsified
claims, when the insurance provider contacted the Employee and
inquired if the phantom dependent was her daughter, the Employee
confirmed that she was. Despite successfully obtaining the
insurance provider's attention as originally desired, the
Employee failed to proceed with the removal of the name from her
When the Employee's actions were discovered by the Employer,
the Employer provided the Employee with two opportunities in
addition to the opportunity provided by the insurance provider to
provide a reasonable explanation for her actions. In the
Employer's opinion, the Employee's explanation was not
reasonable. The Employer considered the Employee's conduct to
be an attempt to gain a greater amount of reimbursement then what
was permitted under the benefit policy. Additionally, the Employer
found the Employee's conduct to be a fundamental breach of
trust given the Employee's management position which entailed
significant trust and reliance. As a result, the Employee was
terminated for cause.
After hearing evidence from both parties, the Court determined
that the Employee's explanation for submitting the falsified
claims was not credible and that her conduct constituted
termination for cause, thereby dismissing the Employee's claim
against the Employer for wrongful dismissal.
Impact of Decision on Employees
Generally, terminations for cause can be difficult for employers
to justify unless the employee's conduct in the given situation
has fundamentally breached the employment relationship beyond
repair. As demonstrated above, one of the ways in which a
fundamental breach will be found to have occurred is when the
employee engages in conduct which breaches the trust or reliance
that an employer has placed in them. Employees who have been
terminated for cause should seek the assistance of an Employment
Lawyer to determine whether the employer has likely met the
required threshold to justify the termination.
Impact of Decision on Employers
Given the difficulty that is generally associated with
justifying a termination for cause, employers should be aware of
the decision referred to above, which demonstrates that an employee
whose conduct fundamentally breaches the trust and or reliance
placed in them by the employer will be justified in terminating the
employee for cause. However, given that the Court will consider the
specific context of each termination for cause to determine whether
or not it is justified, employers should always consult with
Employment Law lawyers prior to terminating an employee for
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).