Home Giants of Employment Law McKinley v. BC Tel: The landmark ruling that redefined ‘reasonable grounds’ for dismissal in Canada

McKinley v. BC Tel: The landmark ruling that redefined ‘reasonable grounds’ for dismissal in Canada

by HR Law Canada

In Canadian employment law, the relationship between an employer and an employee is sacrosanct, governed by both contractual obligations and case law. One landmark case that significantly impacted the landscape of employment law in Canada is McKinley v. BC Tel [2001] 2 S.C.R. 161. The ruling offered much-needed clarity on what constitutes “reasonable grounds” for dismissal, fundamentally changing the framework under which dismissals for cause are evaluated.

The Background of the Case

In McKinley v. BC Tel, the plaintiff, Mr. McKinley, had been employed by BC Tel, now known as Telus, for 17 years. During this time, his employment record had been spotless. However, he found himself embroiled in an internal investigation for falsifying medical records to justify his absence from work. Upon discovery, BC Tel terminated his employment on the grounds of “just cause,” alleging that McKinley’s actions irreparably damaged the trust inherent in the employment relationship.

The Supreme Court’s Ruling

The case eventually made its way to the Supreme Court of Canada, which took a holistic approach to determining what constitutes “reasonable grounds” for dismissal. In a precedent-setting decision, the Court ruled that the key issue was not whether the employee had been dishonest but whether that dishonesty gave rise to a breakdown in the employment relationship that was irreparable.

The Supreme Court asserted that “cause for dismissal cannot be examined in a piecemeal fashion, isolated from context.” Instead, employers must consider a range of factors, such as the employee’s role, responsibilities, years of service, and previous disciplinary record. Thus, an isolated incident should not automatically lead to a dismissal for cause without a contextual assessment.

Impact on Employment Law

A Contextual Approach

The McKinley case established the need for a nuanced, contextual analysis to determine if there are reasonable grounds for dismissal. Employers now need to consider the entire relationship, including the severity of the misconduct, the nature of the employment, and the history of the employee.

Fair Treatment of Employees

The decision ensures a fairer treatment of employees who may have made a one-time mistake but have an otherwise unblemished record. This fosters a more equitable work environment, where the punishment is proportionate to the misconduct.

Legal Precedent for Subsequent Cases

McKinley v. BC Tel serves as a guiding case for employment law disputes concerning dismissal for cause. Courts frequently cite this ruling when considering whether an employer had reasonable grounds for termination.

Employer’s Onus

The ruling places a substantial onus on employers to comprehensively review the circumstances surrounding alleged misconduct before making a dismissal. Employers who do not adhere to this are more vulnerable to wrongful dismissal lawsuits.

Balanced Power Dynamics

The case balances the power dynamics between employers and employees. Before McKinley, employees were at a disadvantage when contesting dismissals based on isolated incidents of misconduct. The Supreme Court’s decision equalizes this imbalance, giving employees a fairer chance to explain and contextualize their actions.


The McKinley v. BC Tel decision by the Supreme Court of Canada has had a far-reaching impact on employment law, particularly in how “reasonable grounds” for dismissal are evaluated. The case mandates a nuanced, contextual approach, encouraging a fairer and more balanced employment landscape in Canada. Both employers and employees must be aware of the implications of this ruling, as it informs the very foundation upon which the trust in an employment relationship is built.

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