By: Stephanie McDonald and Baljinder (Bal) Singh Tiwana
Just cause exists where an employee’s misconduct is so serious that it strikes at the heart of the employment relationship, causing irreparable harm. The threshold is significantly high. If met, an employer may terminate the employment immediately—without notice, termination pay, or severance (if owed).
Courts assess just cause contextually. They examine the nature of the misconduct, the employee’s role, and whether the behaviour destroyed the trust and faith essential to the employment relationship.
Dishonesty often sits at the core of just cause. Fraud, deception, and deliberate lying typically justify a termination for just cause, without reasonable notice, because these actions undermine the foundation of the employment relationship, and can cause irreparable harm.
Dishonesty and Trust: Mechalchuk v. Galaxy Motors (1990) Ltd., 2023 BCCA
In Mechalchuk, the employee served as President of Operations, earning a substantial income. The employee’s role carried a high level of trust, accountability, and fiduciary responsibility.
During his dinner with his spouse, the employee incurred personal expenses, which amounted to approximately $250. He submitted the expense as a business meal, and falsely claimed other employees attended. When questioned during a spot audit, he continued to lie.
The employer later terminated his employment for just cause.
The central issue before the BC Supreme Court was whether this dishonesty met the just cause threshold. The trial judge held that it did.
The Court found that the employee:
- Knowingly misrepresented a personal expense as a business expense
- Falsified company records, contrary to company policy
- Continued to lie when confronted
- Held a senior role demanding absolute honesty
- Irreparably breached the employer’s trust and confidence
The misconduct went to the heart of the employment relationship. Hence, the termination for cause was justified in this scenario.
The BC Court of Appeal upheld the decision, emphasizing:
- The employee’s ongoing dishonesty
- The resulting loss of trust and confidence
- The heightened standard applicable to senior executives
Although a BC Court of Appeal decision, Mechalchuk carries persuasive authority in Ontario, particularly on issues of dishonesty, trust, and fiduciary responsibility, when assessing just cause.
Common Forms of Dishonesty That May Trigger Just Cause
Employees should avoid conduct such as:
- Expense or benefits fraud
- Misrepresenting the purposes of expenses
- Altering or falsifying timesheets
- Backdating documents
- Falsifying company records or information
- Lying on a résumé
- Lying during an internal investigation
- Theft of inventory or equipment
ESA Entitlements: A Higher Threshold
The Employment Standards Act, 2000 (ESA) does not adopt the common-law just cause test.
Instead, the ESA removes termination and severance entitlements only where the employer can proves “wilful misconduct, disobedience or wilful neglect of duty that is not trivial and has not been condoned by the employer.”
This is a significantly higher threshold than common law just cause. The employer must prove that the misconduct was intentional/deliberate. In most cases of lying and deception, this standard will likely be met. However, ESA entitlements are often wrongly withheld even where the employer alleges just cause. Always speak with counsel before signing anything. Note that there’s a general 2-year limitation period to commence any action, which generally begins to run on the date your employment was terminated.
Conclusion
Dishonesty is one of the clearest paths to just cause in Ontario employment law. Courts rarely tolerate intentional deception—especially when it involves personal gain, falsified records, or repeated lies when confronted. Context always matters, but trust and faith in the employee is central. Once irreparably broken, the employment relationship ends.
Seniority, fiduciary responsibility, and serious deliberate misconduct increase the risk of a just cause termination and may jeopardize both common-law and ESA entitlements.
Workplace Sage Legal can help you navigate allegations of dishonesty and just cause. When an employer alleges misconduct, the consequences can be immediate and severe—but just cause is difficult to prove (threshold is high), and ESA entitlements are often wrongly denied incorrectly.
We assist employees in assessing the strength of a just cause allegation, helping protect statutory and common-law rights, and pursuing fair compensation where termination for cause is not justified by the employer.
Early legal guidance could make all the difference in safeguarding your career and rights. Book a consultation today.
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Learn more about employment law through the articles below:
- What’s Wrongful Termination? Signs Your Dismissal May Be Illegal
- Overview of the Employment Standards Act
- Who is entitled to Reasonable Notice, and how is it calculated?
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While reasonable efforts have been made to ensure the accuracy of the content provided, it does not constitute legal advice. Prior to relying on any aspect of this article, you should consult with a suitably qualified legal professional promptly in your relevant jurisdiction, to obtain advice tailored to your individual circumstances
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