When will the law allow you to fire your employee without compensation?

This is a tricky subject that properly attracts the famous lawyer answer: “It depends.” There are a whole series of twists and turns in the road to firing an employee for just cause (or good legal reason), but this July 2025 decision of the Alberta Court of King’s Bench provides a roadmap: Dell v Brookfield Residential (Alberta) LP, 2025 ABKB 403 (CanLii).

In summary, the case involved a 8-year management employee who was fired for participating in a supplier’s incentive program contrary to his employer's code of conduct. The manager was adamant that he had not participated in the program, and even called one of the supplier’s employees to testify that no incentive had ever been paid. However, the employer called the supplier’s owner to testify. The owner explained that, while no incentive had been paid to the fired manager (yet), he was in line for one at the time of the dismissal. The Court ruled that the manager had violated his employer’s code of conduct policy and then failed to take responsibility for his own behaviour. It was found that “just cause” existed for the firing.

Here are some takeaways from the case:

1.      Many forms of employee misconduct are not serious enough to justify dismissal with no compensation. However, deceit and lack of trust are more likely to warrant firing.

2.      Dishonesty is often the final “nail in the coffin” for an employee. Their misconduct (in this case, a breach of a code of conduct) is bad, but not being forthright about it is probably worse.

3.      Employers should investigate misconduct before making a decision to fire an employee, and the employee should be honest and forthright in answering the employer’s questions.