Adequate Warnings and Lack of Condonation are Important to Establish Just Cause Dismissal

On June 10, 2020 Ryan Chan posted about the summary trial in the matter of Nagy v. William L. Rutherford (B.C.) Limited, 2020 BCSC 324, which can be read here.

That decision was appealed and Deanna Froese now reviews the recent appeal decision in Nagy v. William L. Rutherford (B.C.) Limited, 2021 BCCA 62 that changed the summary trial outcome.

Facts

This was an appeal of a summary trial application. The defendant, William L. Rutherford (BC) Limited, had employed the plaintiff, Mr. Nagy, as a customs import manager from 2014 to 2018. Soon after the plaintiff’s employment ended, he commenced a wrongful dismissal action. The defendant argued that the plaintiff had resigned, and if he did not resign, there was just cause to dismiss him due to his persistent pattern of disrespectful and harassing conduct in the workplace, which he refused to correct.

The day the plaintiff’s employment ended, his supervisor came into his office and questioned him about an email where he used the word “ass”. The plaintiff became very upset and impulsively said “I quit” and left the office; however, he returned to work the following day and explained he regretted what he said. That same day, his supervisor told him he had to leave immediately.

The plaintiff’s supervisor deposed that he received complaints from staff and clients regarding the plaintiff’s rude behavior and that he told the plaintiff repeatedly to be respectful towards clients and co-workers during his employment. Also entered in the evidence was an offensive email the plaintiff sent to his girlfriend co-worker on August 30, 2017 using a derogatory term referencing another employee.

The plaintiff had initially brought a summary trial application. It was held that the plaintiff did not resign, as a resignation must be clear and unequivocal. Spontaneous emotional outbursts do not meet this threshold. It was held that the defendant had just cause for dismissal and the plaintiff’s claim was dismissed. The judge held that the August 2017 email constituted after acquired cause.

The plaintiff appealed, arguing that there was no evidence to support the judge’s finding that there was after-acquired just cause for his dismissal.  On appeal, the defendant admitted that there was no evidence to support the judge’s finding that it acquired the August 2017 email only after the termination of the plaintiff’s employment.

The appeal was allowed, the dismissal was set aside, and the matter was remitted to trial for determination on all issues except whether the plaintiff resigned, as the parties agreed this was determined by the trial judge.

Issues

There were two main issues which the court addressed on appeal:

1. Did the judge err by finding that there was after-acquired just cause for the plaintiff’s dismissal?

2. Did the judge err by failing to consider or apply the law regarding condonation and the adequacy of the defendant’s warnings?

Legal Test/Analysis

Did the judge err by finding there was after-acquired cause for the plaintiff’s dismissal?

The governing test for whether an employee’s misconduct amounts to grounds for dismissal was articulated in McKinley v BC Tel, 2001 SCC 38. It is whether the misconduct in question gives rise to a breakdown in the employment relationship or violates an essential condition of the employment contract. Because the trial judge had incorrectly found that the August 2017 email was discovered following the end of the plaintiff’s employment, there was no analysis as to whether the defendant condoned the alleged misconduct. The appeal was allowed on this basis.

Did the judge err by failing to consider or apply the law regarding condonation and the adequacy of the defendant’s warnings?

It was held that the trial judge erred by failing to consider and apply the law regarding condonation and the adequacy of the defendant’s warnings to the plaintiff prior to the termination of his employment. Because the trial judge erroneously found that the defendant did not find out about the email until after the plaintiff’s employment was ended, he did not consider whether the behavior was condoned and whether the defendant’s warnings were adequate.

Because of the many factual and legal questions that were still to be determined, the matter was sent back to trial to have the issues determined.

Takeaway

Employers and employees should keep in mind that a spontaneous, emotional outburst is not necessarily a resignation. Employers should also be certain when they allege that there is after acquired cause that they discovered the conduct following the end of the employee’s employment. This decision also emphasizes that condonation of employee conduct and warnings must be considered when terminating an employee for cause.

This update was authored by Deanna Froese. Have questions regarding the topic discussed? Contact Deanna at dfroese@harpergrey.com.