The Basics

The general rule allows an employer to raise grounds to dismiss an employee for just cause, even though it was unaware of such misconduct at the time of termination.

As may expected, there is some scrutiny attached to this plea by the employer. The employer must not have been aware of the wrongdoing at the time of termination. This means that the company cannot be “wilfully blind”, nor have condoned or accepted the conduct of which it seeks to complain as a defence to the employee’s claim.

In essence, the five mile up view means that the employer must be acting in good faith to raise the grounds of termination at a later date, when the original dismissal was “not for cause”.

Court of Appeal on After-Acquired Cause

One case[1] dealt with an unusual fact situation in which the company had provided fair working notice to the employee. It was within this time period when the alleged misconduct had occurred.

This raised an interesting point as generally the company cannot argue post-termination conduct as grounds for dismissal. For example, if the employment relationship ended on March 1 and the misconduct began April 1, this could not be relevant to the argument of just cause for dismissal.

The issue really became a simple one. When did the employment relationship end? Was it the day on which working notice was given or the actual day on which the relationship ended?

The court decided it was the latter. For that reason, the offensive conduct during the period of working notice could be argued as cause for termination.

Employers Must be Cautious

Like all allegations of just cause, particularly when alleging serious wrongdoing, the employer must do so in good faith and ideally based on an independent review of the factual basis of just cause. Where this is not done, and the allegations fail, the employer could be subject to serious sums of additional damages for moral damages and even punitive damages. This exposure will likely be more severe when alleging after-acquired cause as generally there is a more diligent examination of this argument done by the court.

An Ounce of Prevention

Clearly legal advice must be taken before such decisions are put in place.

Employees Must be Vigilant

Once termination notice has been given, employees must be careful to maintain their standard of proper conduct. Just because they have been terminated, yet still working, does not give a free rein to behave improperly. This should not be a surprising revelation.

If working notice has been given, in certain situations, where the notice is ostensibly unfair, it may be possible to assert that this conduct has “repudiated” or ended the employment relationship immediately. In this context, any subsequent conduct of the employee is not relevant to the argument of just cause.

If the employee is considering embarking on “questionable” behaviour, such as competing with the employer or soliciting the employer’s customers in a new business endeavour, it may be prudent to do so in this context, not while still employed.

Such strategy obviously requires careful legal planning.

Get Advice Before You Act

Contact the offices of Toronto employment lawyers Grosman Gale Fletcher Hopkins. We regularly advise workplace parties on a wide range of legal workplace issues. Contact us online or by phone at 416 364 9599 to schedule a consultation.

[1] Ontario Court of Appeal in Aasgaard v Harlequin