Can an employer rely on misconduct it discovers
after terminating an employee to justify the
termination? In the recent case of Campbell v. Harrigan Rentals
and Equipment Ltd., 2013 BCSC 1813, the B.C. Supreme Court
In Campbell, an employee brought a wrongful dismissal
action when he was terminated from his employment without notice.
The B.C. Supreme Court upheld the employee's dismissal and
determined that the employer had cause to dismiss him - even though
the employer was not aware of those causes at the time of his
The employee, Mr. Campbell, was 69 years old at the time of his
dismissal and had been employed as a financial controller for 14
years at a salary of $60,000 per year. Campbell was responsible for
the employer's daily financial and accounting duties. The
employer's new owner discovered that Campbell had been using
his company gas card for his wife's car, and had remitted
claims for medical expenses on behalf of his wife who was
ineligible to receive benefits under the plan. The employer
investigated the allegations and asked Campbell if there was any
other information he would like to share regarding his accounting
practices. Campbell said "No." Following the
investigation, the employer concluded that Campbell was
intentionally dishonest in his use of the gas card and his medical
expense claims. In the employer's view, this dishonesty caused
it to lose confidence in his integrity and accordingly justified
his termination. The employer issued a termination letter outlining
the two reasons for termination and dismissed Campbell without
Following his dismissal, Campbell initiated an action for
wrongful dismissal. The employer claimed it had also discovered
other reasons to justify Campbell's dismissal, which were
outlined in its Response to Civil Claim. The after-acquired reasons
included Campbell taking two unauthorized salary advances and
instructing another employee to falsely inflate the inventory
recorded in the Company accounts.
The Court's Analysis
At the summary trial, the Court concluded that the two reasons
outlined in Campbell's termination letter did not constitute
reasonable grounds for dismissal. In particular, the Court rejected
the employer's argument that Campbell was intentionally
dishonest in using the gas card, and found that the employer had
failed to prove that Campbell made any improper medical claim.
Nevertheless, despite not establishing just cause on the basis
of the grounds given to Campbell in his termination letter, the
Court accepted the Company's after-acquired cause. The Court
relied on recent authority that said that after-acquired
information can form the proper basis upon which to uphold the
termination of an employee.
The Court concluded on the evidence that the employer had
established, on a balance of probabilities, that Campbell had taken
unauthorized salary advances, as well as engaged in a practice of
not recording inventory accurately. Campbell admitted to taking the
salary advances and intentionally inflating the inventory, but
provided explanations for the acts, which the Court dismissed.
Assessed in context, the Court found that these dishonest and
deceitful actions were incompatible with Campbell's continued
employment as a financial controller.
In the result, the Court concluded at paragraph 53:
...I find that the defendant
Company has satisfied the onus upon it of proving that it had
reasonable cause to dismiss the plaintiff. The plaintiff admits
that he took the salary advances and that he intentionally inflated
the inventory. Taking a contextual approach and applying the
proportionality principle discussed in McKinley, I conclude that
the Company had reasonable cause to dismiss the plaintiff, even
though it was not aware of those causes at the time of his
dismissal on November 4, 2011.
Lessons for Employers
This decision is helpful for employers as it affirms that if an
employer discovers misconduct that it was not aware of at the time
of termination, it may rely on this information to justify its
termination of an employee.
However, whether misconduct discovered after an employee has
been terminated is enough to justify dismissal can be complex and
all situations are different. In this case, the after-acquired
misconduct was significant enough on its own to establish just
cause. This conclusion was due to the gravity of the dishonest
acts, especially given the employee's position of trust within
It is also prudent for an employer that is considering dismissal
for cause to take the time, before dismissal, to fully investigate
whether there are any other skeletons in an employee's closet.
This may not only assist the employer in determining whether or not
cause for dismissal exists, but may make any allegations that are
raised subsequent to an employee's dismissal more credible.
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.
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