Post Termination Conduct
An employer is not allowed to rely upon a dismissed employee’s post-termination conduct (a.k.a. subsequent event evidence) to support its decision that it had cause to fire the employee, except in exceptional circumstances. In Walerius v. McDiarmid Lumber Ltd.1 the Manitoba Court of Appeal stated the reason why an employer is not able to rely upon a former employee’s post-termination conduct to justify its decision to terminate an employee for cause. At para. 15, Justice Twaddle wrote:
The rule against reliance on post-dismissal conduct to justify the earlier dismissal accords with principle. To justify dismissal without notice, an employer must prove a breach of the employment contract by the employee… If such conduct occurs only after the dismissal, it cannot amount to a contractual breach as the contract is already over.
In 2012 the Court of Queen’s Bench of Alberta, in Gillespie v. 1200333 Alberta Ltd.,2 set out the exceptions when a dismissed employee’s post-termination conduct may be relevant to a wrongful dismissal claim. The Court wrote at para. 22:
The case law with regard to the admissibility of subsequent event evidence indicates that there are two circumstances in which evidence of post‑termination conduct can be relied upon to establish grounds for dismissal: first, when the post‑termination conduct sheds light on the reasonableness of the dismissal for cause at the time it was implemented (Cie minière Québec Cartier v. Quebec, 1995 CanLII 113 (SCC),  2 S.C.R. 1095 at para. 13); and second, when the post‑termination conduct reveals an undesirable aspect of the employee’s character, such as deceitfulness, that would itself justify his or her dismissal (Lake Ontario Portland Cement Co. Ltd. v. Groner, 1961 CanLII 1 (SCC),  S.C.R. 553 at 564). This second category of cases in which post‑termination conduct can be relied on is perhaps not without controversy: see the discussion in Saskatchewan Assn. of Health Organizations v. C.U.P.E., Local 3967, 203 L.A.C. (4th) 1 (Sask. Arb. Bd.). However, for purposes of this appeal, I will assume that post‑termination conduct can be relied upon in both of these circumstances.
In Gillespie, the employee, an occupational therapist, was terminated from her employment for cause for interpersonal conflicts and a poor communication style. Immediately after being dismissed she returned to her office to collect her personal items. She also removed several letters from patients that had complimented her. The letters, however, contained confidential patient information.
The provincial court trial judge found that the employee’s interpersonal conflicts and communication style did not establish just cause to fire her from her employment. However, the judge found that the dismissed employee, by removing the letters from her office, had breached the non-disclosure agreement that she had signed and justified the employer’s decision to summarily dismiss the employee.
On appeal, the decision was overturned because the trial judge had improperly relied upon post-termination conduct. The appeal judge made the following observations:
- misconduct before dismissal and misconduct after termination of employment are subject to different analyses in terms of relevance to the issue of grounds for dismissal;
- a party to a contract is not entitled to repudiate a contract and to afterwards require the other party to continue to comply with his or her contractual obligations; and
- if there has been a breach of a non-disclosure agreement after the dismissal of an employee, the proper way for the employer to respond is to seek damages for the breach of the non-disclosure agreement, not use the breach to retroactively justify its decision to terminate the employee for cause.
As noted in Gillespie, the most controversial justification for using post-dismissal conduct is when it is relied upon by an employer attempting to reveal negative aspects of a dismissed employee’s character. The leading decision is Lake Ontario Portland Cement Co. Ltd. v. Groner.3 The plaintiff, a mechanical engineer, was employed in a substitute capacity to supervise construction of a cement manufacturing project. He put a false date on an agreement between himself and his employer. The Ontario Court of Appeal held that the employee’s misconduct in falsifying the date was not incompatible with the proper discharge of his duties and, therefore, was not cause for dismissal. The Supreme Court of Canada, however, considered the employee’s post-termination conduct when he perjured himself when he testified as to the dating of the agreement. Ritchie J., writing for the Court, said (at p. 564):
It may be, as Mr. Justice Morden says in the course of his judgment in the Court of Appeal, that the respondent’s misconduct “was not incompatible with the proper discharge of the duties for which he was employed”, but in my view it is not so much the misconduct itself as the fact that he was capable of it which justifies the respondent’s dismissal. The respondent’s own evidence disclosed to the directors that they, on behalf of the shareholders, had been depending for their technical information respecting the progress of the construction of this expensive project on the reports of a man who turned out to be capable of deliberately putting a false date on a document after it had been signed by the company’s president and who was afterwards prepared to lie about his actions under oath. As was said by Lord Atkinson in Federal Supply & Cold Storage Company of South Africa v. Angehrn & Piel (1910), 103 L.T. 150 at p. 151, “it is the revelation of character which justifies the dismissal”.
The jurisprudence regarding post-termination conduct set out in Groner (as opposed to the Supreme Court’s comments on after-acquired cause) did not gain significant traction in subsequent lower court decisions and should be read narrowly.
In 2012 the Ontario Court of Appeal also considered the use of post-termination conduct evidence in Canadian Office and Professional Employees v. Yellow Pages Group Co.4 The labour arbitrator had upheld the employer’s decision to terminate the grievor (a unionized employee), at least in part, on the fact that he found that the grievor had been less than completely honest during the arbitration hearing. The Court of Appeal concluded that the employer did not have just cause to dismiss the employee. Addressing the the arbitrator’s concerns about the grievor’s lack of candour during the arbitration process the Court held that his lack of candour was not relevant to the determination as to whether just cause existed because the lack of candour had played no part in the employer’s decision to terminate the grievor’s employment and could not be used retroactively.