McKinley v. BC Tel, [2001] 2 SCR 161, 2001 SCC 38 (CanLII)

Issue: Whether an employee’s dishonesty, in and of itself, necessarily gives rise to just cause for summary dismissal.  Complete Decision.

The Facts: The employee had 17 years of service and was 48 years old. The employer B.C. Tel. took the position that they had just cause for summary dismissal of the employee alleging that he had been dishonest about his medical condition and the treatments available for it.

Decision: The Supreme Court of Canada held that whether an employer is justified in dismissing an employee on the grounds of dishonesty is a question that requires an assessment of the context of the alleged misconduct.  The surrounding circumstances of the alleged misconduct, its level of seriousness, and the extent to which it impacted upon the employment relationship is required because dismissal on a ground as morally disreputable as “dishonesty” might well have an overly harsh and far‑reaching impact for employees.  For example, to entitle an employer to dismiss an employee for just cause for a single act of dishonesty, however minor may be overly harsh.  A finding of misconduct does not, by itself, give rise to just cause. Rather, the question to be addressed is whether, in the circumstances, the behaviour was such that the employment relationship could no longer viably subsist.  The test is whether the employee’s dishonesty gave rise to a breakdown in the employment relationship.  Just cause for dismissal exists where the dishonesty violates an essential condition of the employment contract, breaches the faith inherent to the work relationship, or is fundamentally or directly inconsistent with the employee’s obligations to his or her employer.       In this case, while there may not have been a full disclosure of all material facts by the employee, this was not required of him. The court found there was no serious reason for termination because the employee did not engage in dishonesty in a manner that undermined, or was incompatible with, his employment relationship.