It is generally understood that employees must follow the lawful
orders of their employers and may be disciplined for disobeying
such orders. However, the more difficult question faced by
employers is whether a disobedient employee can be fired for just
cause. Although not every instance of disobedience will
allow an employer to dismiss an employee for cause, the recent
decision of the British Columbia Supreme Court in Cotter v. Point Grey Golf and Country
Club, 2016 BCSC 10, confirms that an employer may have
cause to terminate an employee whose repeated actions are willfully
disobedient and "seriously incompatible with the
Mr. Cotter, a chartered accountant, was a controller with 16.5
years of service at the time of his dismissal. His duties as
the controller for the employer included tracking and reporting on
company finances, assisting with audits and signing management
representation letters to the auditors.
In 2010, it was discovered that the employer has neglected to
include information about its new pro shop in its annual update to
BC Assessment in 2008 and 2009, which could have impacted its
property taxes. The employer immediately took steps to
resolve the issue by notifying BC Assessment and its auditors of
the oversight. BC Assessment subsequently informed the
employer that there would be no changes to its tax assessments as a
result of the overdue filing of information returns.
Accordingly, the employer viewed the issue as resolved.
Mr. Cotter, however, did not see the issue as resolved and took the
position that there was an outstanding liability for property taxes
that should be reflected in the employer's audited financial
statements and management representation letters. He also
spoke with a number of other parties about the issue, breaching his
duty of confidentiality to his employer. On four separate
occasions, Mr. Cotter was warned by his employer to refrain from
pursuing or discussing the matter further. Despite these
warnings, Mr. Cotter continued to pursue the matter and refused to
sign the 2013 management representation letter to the
auditors. As a result of his disobedient conduct, he was
terminated for just cause.
Mr. Cotter sued his former employer claiming damages for wrongful
dismissal. The employer took the position that it had grounds
to terminate Mr. Cotter for cause due to his repeated insubordinate
In the Court's decision, the law on disobedience was
summarized: where an employer has issued directions that are lawful
and not dishonest, it will amount to insubordination if those
directions are disobeyed. The Court also noted that an
employer will have just cause to dismiss an employee where the
employee has been insubordinate and willfully disobedient to the
employer's orders in a matter of substance, to the extent that
the employer loses trust in the employee.
The Court concluded that Mr. Cotter was wilfully disobedient and
insubordinate in defying "clear and unequivocal"
directions from his direct supervisor and in ignoring repeated
warnings that were given to him by his employer. The Court
held that these actions, coupled with Mr. Cotter's disclosure
of confidential information to other individuals, were incompatible
with an employer-employee relationship, justifying Mr.
Cotter's termination for cause. As a result, Mr.
Cotter's claims were dismissed.
Lesson for Employers
Not every incident of disobedience by an employee will give an
employer just cause to terminate an employee's employment.
Whether an employee's disobedience at work will justify a
dismissal for cause will depend on the circumstances of each case,
including the nature and seriousness of the conduct. However,
the decision in Cotter demonstrates that termination for
cause may be justified where an employee's disobedience or
insubordination is so serious that the result is a fundamental
breakdown in the employer-employee relationship.
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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