Timing is everything: don’t delay when terminating with just cause

A recent decision by the Alberta Labour Relations Board (ALRB) has shed light on the intricacies of just cause dismissals and the importance of documentation when disciplining employees.

On July 5, 2024, the ALRB dismissed an appeal by a hair studio in Banff, Alberta to reverse an earlier order by the Employment Standards Officer mandating the hair studio to pay a fired employee termination pay, holiday pay, and vacation pay totalling $3,972.38.

The primary issue on appeal was whether the studio had had just cause to terminate, which the appeal board confirmed it did not, stating, “There is almost no evidence of the Respondent’s behaviour after February 26.  At best, the evidence for the Appellant is a general statement that the Respondent’s behaviour had not changed. This is not sufficient to satisfy the legal onus to prove just cause.”

Series of incidents leads to just cause termination

The employee was hired by the hair studio in 2020 but was intermittently off due to pandemic closures. However, a series of incidents starting in July 2022 eventually led to his termination on March 20, 2023.

The notable incidents included a negative Google review about the employee on July 25, 2022 which prompted a discussion on professionalism with the studio owner. Then, on November 21, 2022, the employee verbally accosted a colleague, leading to a warning about his attitude and behaviour.

The most critical incident occurred on February 26, 2023, when the employee had an altercation with the General Manager, using offensive language against him. This incident resulted in a final written warning, but despite these incidents, there were no further documented missteps by the employee between the final warning and his termination in March 2023.

Timing is everything with just cause dismissals

The board's decision hinged on the timing and handling of these incidents.

"If they had terminated him the day that things came to a head or things blew up, they could have made a credible case for cause," said Alex Norris, co-chair of Carbert Waite’s employment group in Calgary.

However, by issuing a warning on February 26, then waiting until March 20 to terminate the employee, the studio weakened its case for just cause, she explained. This gap between the final warning and termination was critical. As Norris explains, "The fact that they used clear language, saying ‘This is a final warning,’ means that's how an adjudicator or an officer is going to interpret it: ‘You called it a warning. It's a warning.’”

Employers must act quickly when they believe there is just cause for termination, Norris stresses. Delaying action can undermine the validity of the cause. "Where an employer feels that there's cause, I think you have to act in that moment," she says, adding that detailed and timely documentation of incidents and warnings is essential. "Document, document, document. Even if it's just handwritten notes... it's always better to have contemporaneous records of what occurred."

Clear communication is also crucial – employers should clearly communicate the consequences of an employee's actions, including if termination is a possibility. In this case, the final warning explicitly stated that further issues could lead to termination, which was a critical piece of the employer's argument.

High bar for establishing just cause

“It's always open to an employer to end a relationship without cause for whatever reason, as long as it's not a discriminatory reason tied to a protected human rights ground,” Norris says.

However, the bar for establishing just cause is high, she warns; while employers can terminate without cause for business reasons, doing so for just cause requires meeting a stringent legal standard. Proper documentation, timely action, and clear communication are the cornerstones of building a credible case for just cause termination.

“If you're going to make the decision to terminate with just cause, thereby depriving the employee of advanced notice or pay in lieu of notice, you've got to make sure you've hit that high bar of either extremely egregious conduct or less serious conduct, but it's been repeated and not improving,” she says.

This case serves as a reminder that while terminating an employee for just cause can be legally complex, thorough preparation and adherence to best practices can make the process smoother and more defensible, says Norris.

“It's just a reminder, have good employment contracts that can limit your severance exposure, and then you don't run into an issue where you're trying to decide between terminating for just cause or not, because you can provide a specified amount of severance on a without cause termination that's just in a tidy contract.”