Northern Exposure

When does post-termination conduct amount to cause?

by Jennifer Shepherd

Can a Canadian employer justify an employee’s dismissal for acts committed after he or she has been fired? The answer is: sometimes. In Gillespie v. 1200333 Alberta Ltd., an Alberta court overturned a lower court ruling that permitted an employer to retroactively justify an employee’s termination because the employee removed confidential documents from the office upon her termination. The question on appeal was whether the employee’s post-termination conduct was sufficient to limit the employer’s obligation to provide reasonable notice or pay in lieu of such notice.

The dismissal

Bonita Gillespie was an Occupational Therapist with 1200333 Alberta Ltd. (PCN) for about a year when she was reprimanded and ultimately fired for a series of verbal altercations with coworkers. She was provided with two weeks pay in lieu of reasonable notice and instructed to clear her desk and vacate the office immediately. When packing her personal items, Gillespie took a number of letters containing personal information of some of her patients. They contained complimentary statements patients had made about Gillespie while she was employed with PCN.

After Gillespie complained about the amount of pay provided in lieu of reasonable notice, PCN took the position that the post-termination act of taking confidential information out of the office amounted to theft of company property, constituted cause for dismissal, and meant she was entitled to nothing.

The trial judge decided that two weeks notice was reasonable and denied Gillespie’s claim. The judge was of the view that while Ms. Gillespie was initially terminated without cause, the post-termination act of removing confidential documents from the office was a breach of her Non-Disclosure Agreement (NDA), which prejudiced PCN’s ability to properly conduct its business.

Appeal court overturns ruling

On appeal, Justice Ross reversed the trial judge and awarded Gillespie four month’s salary and benefits. The judge stated that there are limits on when post-termination conduct can be relied upon to establish grounds for dismissal and disagreed with PCN’s assertion that Gillespie’s post-termination conduct further demonstrated that her interpersonal issues made her unsuitable for the position.

Instead, the judge said that the appropriate remedy for the NDA breach was for PCN to claim civil damages against Gillespie, submit a complaint to the appropriate professional disciplinary body, or bring proceedings against Ms. Gillespie under privacy legislation. The judge concluded that “there are other ways to enforce the [NDA] that do not involve the illogic and unfairness of permitting an employer to retroactively justify the repudiation” of the employment contract. Given that this is an appeal court ruling, it may have ramifications throughout the rest of Canada.

Take away for employers

PCN terminated Ms. Gillespie because of her personality, which in this case did not constitute just cause for dismissal. PCN’s reliance on post-termination conduct might have been successful if the post-termination behavior was related to and supported the reasonableness of the dismissal. Because it was not, Gillespie’s post-termination theft of confidential information did not eliminate her entitlement to pay in lieu of reasonable notice.