Most employees assume that once they’ve been let go—especially if terminated without cause—the matter is closed. However, under Canadian employment law, employers may still raise what’s known as after-acquired cause, even after the termination has occurred.
This legal concept can have a serious impact on an employee’s entitlement to severance or notice. Here’s what you need to know.
What Is After-Acquired Cause?
After-acquired cause refers to a situation where an employer discovers serious misconduct after an employee has already been terminated—often without cause. If the employer can prove that the misconduct, had it been known at the time, would have justified dismissal for cause, they may be relieved of the obligation to provide notice, pay in lieu of notice, or severance.
In other words, even if you were told you were being let go “without cause,” your employer could later discover misconduct and retroactively assert just cause to deny termination pay.
Case Example: Drug-Related Misconduct Discovered Post-Termination
In a notable British Columbia case, an employee worked as a health and safety manager at a Vancouver-based shipping company. He was dismissed without cause in February 2013 and asked to return his company-issued cellphone.
After his termination, the employer reviewed the device and discovered text messages sent by the employee—during working hours and to coworkers—attempting to arrange illegal drug transactions.
The employer argued that, had it been aware of this conduct at the time of dismissal, it would have terminated him for cause. The case made its way to the British Columbia Court of Appeal, which agreed with the employer.
The Court held:
- The employee’s conduct was fundamentally inconsistent with his position as a health and safety manager;
- The behaviour had a serious and irreparable impact on the trust at the core of the employment relationship;
- As such, the employer was entitled to rely on after-acquired cause to defend against the employee’s wrongful dismissal claim.
Key Legal Principle
An employer can claim just cause after the fact—but only if the misconduct occurred before the termination and was unknown at the time. If the employer knew of the misconduct before terminating the employee and failed to act on it, they cannot later rely on it to justify the dismissal.
What Should Employees Know?
- Being terminated “without cause” doesn’t always guarantee a payout—after-acquired cause could be raised if new evidence surfaces.
- If your former employer is attempting to retroactively assert cause, it’s critical to seek legal advice promptly.
- These cases are fact-specific, and courts will look closely at the nature of the misconduct, the timing of its discovery, and the role of the employee.
Need Advice?
If you’ve been dismissed and your employer is now alleging cause—or you’re unsure of your entitlements—Singh Lamarche LLP is here to help. Our experienced employment lawyers will review your case, protect your rights, and guide you through your options.
Contact us today to schedule a consultation.
