Can an employer rely on information it learns after it has already fired an employee to justify firing the employee? That was the issue in a recent case called Campbell v. Harrigan Rentals and Equipment, decided by the British Columbia Supreme Court.
Mr. Campbell was a 69 year old accountant with 14 years’ service. He was terminated for cause (without notice) based on two allegations of wrongdoing. The first was using a company gas card to fill up his spouse’s car. The second was making an insurance claim on behalf of his spouse, which the company claimed was not permitted. Campbell sued for wrongful dismissal, claiming damages for failure to provide reasonable notice.
The Court ruled that neither ground was cause for dismissal. The employer had told Campbell that the gas card was for ‘his personal use’, and did not specify that he could not fill up his family car. The insurance policy, on its face, permitted claims for spouses, so Campbell had done nothing wrong.
However, that wasn’t the end of the matter. By the time of trial, the employer had gone fishing and came up with a list of other things Campbell had done wrong, things that the employer was unaware of at the time it fired him. These included a series of relatively minor bookkeeping errors, but also two acts that the court found were serious. Firstly, Campbell had given himself a pay advance without advising his bosses about this. He paid it back, but the court finds he abused his position of trust to give himself a benefit. Secondly, he had fudged the accounting books to ensure that certain inventories balanced in the books. He’d been doing this for years, a practice he learned from the company’s previous owner, who was now dead. Campbell argued that he was just following the practice of the previous owner, and was doing so to protect the business. The court ruled that this was a serious breach of his duties, notwithstanding the previous owner had said the practice was okay. The new owner should have been informed of the practice and as the accountant, he had a duty to properly reconcile the books.
The key legal issue in the case was the use of post-dismissal evidence to justify a dismissal. Do you think an employer should be able to build up its case by relying on events that it wasn’t aware of at the time of dismissal?
The Court rules that an employer can do this. The Court relied on a 1961 decision of the Supreme Court called Lake Ontario Portland Cement v. Groner:
The validity of after-acquired grounds for dismissal was acknowledged by the Supreme Court of Canada in Lake Ontario Portland Cement Co. Ltd. v. Groner,  S.C.R. 553, at pp. 563- 564:
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 validity as a ground for dispensing with his services. The law in this regard is accurately summarized in Halsbury’s Laws of England, 2nd ed., vol. 22, p. 155, where it is said:
It is not necessary that the master, dismissing a servant for good cause, should state the ground for such dismissal; and, provided good ground existed in fact, it is immaterial whether or not it was known to the employer at the time of the dismissal. Justification of dismissal can accordingly be shown by proof of facts ascertained subsequently to the dismissal, or on grounds differing from those alleged at the time.
Thus, as long as the employer has proper cause for the dismissal, it doesn’t matter that the basis of the cause was not discovered by the employer until some time after the initial dismissal but before trial.
As a result, Campbell loses his case. The after-acquired knowledge of the dishonest conduct constituted for dismissal without notice.
Issues for Discussion
Do you agree with the Court’s approach?
Can you think of an argument why an employer should not be entitled to rely on information that it was unaware of at the time of dismissal?
Do you think that fact that Campbell was using a dishonest bookkeeping practice formally approved by his (now deceased) boss should provide a proper defence for Campbell?
Cross-Reference to Doorey’s Law of Work (forthcoming Emond Montgomery):
Chapter __: Termination of an Employment Contract For Cause (Summary Dismissal)