After discharging someone, a company will sometimes learn things about the former employee’s performance that might amount to “just cause” to terminate. A 2014 case from the British Columbia Court of Appeal addresses when such after-acquired cause may be available to defend a termination decision.

Kirk Van den Boogaard was a Project Manager for Vancouver Pile Driving Ltd., a large marine general contractor in Vancouver for the 14-month period between Dec. 11, 2011 and Feb. 13, 2013. He had been working on a major construction project for Chevron on Vancouver Island when his employment was terminated, originally without cause, upon the provision of four weeks’ salary in lieu of notice.

After the termination of employment, the employer discovered a number of business irregularities, the most serious of which involved Mr. Van den Boogaard attempting through text messages to procure illegal drugs (primarily Dexadrine and Clonezapam) from a subordinate employee under his supervision and control.

When the wrongful dismissal action commenced the evidence established that the Plaintiff occupied a fairly senior management role and that his duties included the supervision of safety in a high risk, safety-sensitive, heavily regulated industry. The Plaintiff was in fact responsible for enforcement of the employer’s drug-prohibition policies.

Both the trial judge and the BC Court of Appeal assessed the conduct “contextually” as required by the Supreme Court of Canada decision in McKinley v. B.C. Tel, 2001, SCC 38. At both levels it was held that the conduct of the Plaintiff amounted to “misconduct that goes to the root of the employment…” rendering the Plaintiff’s position with the company untenable.

One of the more interesting aspects of this case derived from the fact that the Plaintiff’s texts were discovered post termination when he returned his company cell phone.

The BC Court of Appeal confirmed that employers may indeed rely upon after-acquired cause to subsequently assert just cause for summary dismissal in certain circumstances.

The court relied upon the 1961 Supreme Court of Canada decision in Lake Ontario Portland Cement Co. v. Groner, [1961] SCR 553 for the proposition:

“The fact that the Appellant did not know of the Respondent’s dishonest conduct at the time when he was dismissed, and that it was first pleaded by way of an amendment to its defence at the trial does not, in my opinion, detract from its viability as a ground for dispensing with his services.”

The employer must still establish that at the time of dismissal there existed facts sufficient in law to warrant such dismissal.

Note however, the requirement that the after-acquired cause must actually be “after-acquired”.  The BC Court of Appeal in Van den Boogaard v. Vancouver Pile Driving Ltd., 2014 BCCA 168 stated at paragraph 34:

“If an employer knew of the misconduct and had expressly or implicitly condoned it, then claims of after-acquired cause will be defeated.”

This is consistent with the 2011 decision of the New Brunswick Court of Appeal in Doucet v. Speilo Manufacturing Inc., 2011 NBCA 44 at para. 87 in which the court made it clear that the employer must not have known of the misconduct at the time of the dismissal.

The resulting caveat is that employers who wish to avail themselves of a just cause defence and sit quietly on existing evidence of misconduct do so at their own peril.